Inspect before you sign: acceptance certificates and contractual estoppel

In Aquila v Onur, the court confirmed the effectiveness of contractual estoppel and acceptance certificates.

Aquila agreed to lease an aircraft engine to Onur. When it entered into the lease, Onur signed an acceptance certificate. A major engine failure occurred (luckily without loss of life or serious injury). Aquila claimed for unpaid rent and other losses. Onur retorted that the engine suffered from a latent defect which was a breach of the delivery conditions.

Aquila applied for summary judgment: even if there had been a breach, Onur was estopped from relying on it because Onur had signed the acceptance certificate. Having run through the key authorities on contractual estoppel (Peekay, Springwell and Vestia), the court sided with Aquila.

Onur had agreed to provisions which meant that if it signed the acceptance certificate it could not complain of the condition of the engine. The fact that the parties knew that Onur had not actually inspected the engine could have no impact on the effect of the contractual scheme.

Allen & Overy’s Aviation practice has written about this case in more detail here.