Chain of indemnity

The right of a supplier of an injurious product to recover the amount paid in damages from his own supplier. A retailer, liable under the Sale of Goods Act 1979 for product-induced injuries to a customer, may seek an indemnity under the Act from the relevant wholesaler or manufacturer who breached an implied term (fitness for purpose and satisfactory quality). However, as it is a nonconsumer contract an exclusion of these implied terms is permitted if the supplier can show that the exemption passes the test of reasonableness. In turn a wholesaler can look to the manufacturer for a Sale of Goods Act 1979 breach.

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