Lecture 15 Commercial Law PDF

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Lecture 15 Commercial Law Sale of Goods II Deliverable state Underwood v Burgh Castle Brick & Cement – not in a deliverable state until dismantled Right of rejection lost with accepting the goods, another instance of how confused judiciary can get about this. Contract under which the goods were sold on rail at a certain station. Since they were still attached to the ground  weren’t on rail. Ownership would pass in this case when the goods are put on a train, similar to COGBS rule that ownership is transferred when it goes over the railing. Philip Head v Showfronts – sale of a carpet, fitted by the seller at the buyer’s premises, required a large area of carpet. Had been stitched into a bundle which was delivered to the premises and left to be fitted afterwards. In the time that it was left it was stolen. Who bared the risk? The risk goes with the ownership. Had the ownership passed before the theft? Was the carpet laid? NO  since the contract required it to be laid, it is not in a deliverable state. Failure to appreciate the condition of the deliverable state. Unconditional appropriation Healy v Howlett & Sons – contract for the sale of 20 cases of mackerel, Ireland to fish market in London. Time critical – mackerel in the freshest possible state, the fish missed the train to Dublin. Arrived late and then missed the ferry to Holyhead. Under the contract a railway official would mark which crates are for which buyer. This was the moment of unconditional appropriation. When had property passed passed when goods were marked at Holyhead, couldn’t have been an unconditional appropriation at any earlier point. AT this point the mackerel wasn’t as fresh. The seller had the burden of it being not as fresh and late. – how it should be done Problem of deliverable state meaning must be in such condition that the buyer would be obliged to accept it. Rule 5 s18 – future goods pass under the contract of sale where there is no agreement between the parties as to how they are going to pass- require contract, deliverable state and unconditional appropriation. Carlos Federspeil v Twigg CF ordered bicycles and tricycles from a company in the UK. Manufacturer in UK went into liquidation, Mr Twigg was administrator of the company in its insolvency. Had the property of the bicycles and tricycles passed? CF become a creditor of the company. If ownership has passed, then the bikes are theirs. In their interest to find that they have the bikes and trikes. Goods were sold FOB, found at the time of insolvency boxed and labelled (someone has appropriated them for the contract) for CF in the company’s warehouse. Not in a deliverable state and not free on board. Haven’t been put on rail. Therefore property hasn’t passed. S18 only applies where the countries haven’t agreed otherwise. Shouldn’t have been considered a s18 case anyway, since they had agreed FOB.

Philip Head v Showfronts – again Judges shouldn’t be deliberating of heaviness of carpet Under the contract the carpet was to be fitted, even if it is heavy this didn’t matter. Point where you cannot go back – where the carpet has been fitted One test that always works – when the seller has carried out the last act under the contract that they are required to carry out, that is the unconditional appropriation.

Seller’s Duties More seller’s duties than buyer’s duties Three basic types of sale: Simple sale, sale by description and sale by sample Sale by sample – fungibles, goods of a broad type which is substitutable. Can be a sale by sample and sale by description Seller’s duties common to all types of sale o Duty to deliver o Duty to pass good title o Duty to supply goods of satisfactory quality o Duty to supply goods in the right quality o Duty to supply goods at the right time Memorise Duty to deliver – voluntary possession to the buyer S27 SoGA provides the default rule where we don’t have an agreement. Delivery is to take place at the seller’s premises and the buyer should collect them from there at a reasonable time and be collectable at a reasonable time. S28 SoGA – Delivery and payment are concurrent conditions If you can’t and won’t pay when the delivery is supposed to take place and there isn’t a credit agreement isn’t in place then delivery cannot happen, are conditional on one another. May have deferred payment or delivery. Only when there is nothing in the contract to explain this that this applies. Duty to pass a good title s12 SoGA Property passing – good rights against the seller Good title – enforceable against the world Derives from an implied term of s12, is a mandatory rule rather than a default rule, cannot exclude the obligations implied by s12. Implied term that the seller has the right to sell the goods or at the time the property is passed have the right to sell. Can sell goods you don’t fully own Limited or conditional title – passing as good a title as you promise to.

Duty to supply goods of the right quality S14 SoGA – goods must be of satisfactory quality o What have the parties have intended? o Implies a term provided the sale is by way of a business, not consumer to consumer for example. o Supplied for a non-normal purpose, if this buyer was relying on the seller’s expertise then it must be fit for that purpose. E.g. are the goods as durable as they are expected to be? o Free from minor defects o Not an exhaustive list o Has to be satisfactory quality – considering the price, quality is conditioned. o Objective test – what would a reasonable person have expected of the goods o Fitness for purpose – changed scope, when 79 act was passed meant the same as 1893 act. Now under the amended act – must be fit for ALL purposes such goods are ordinarily sold. o S14(2) general definition of satisfactory quality o S14(3) relying buyer on seller’s expertise that the goods will be suitable for some other thing as well- reliant on them and not own judgement. Illegality issues would be void and not able to rely on s14(3)  Indicating that there are two notions of fitness for purpose o If it is reasonable to exclude s14 implied term then it can be, not for the case of consumers. o Reasonableness test s11 Unfair Contract Terms Act Duty to supply the goods in the right quantity S30(1), 31(1) SoGA When given in the wrong quantity the buyer can reject delivery. If you choose to accept the under delivery- pay for them at the unit price agreed under the contract. Over delivery – don’t get the benefit of discounts Different if the contract says the rate of charges according to each order – order covered by the umbrella of the contract S31(1) not bound to accept delivery by instalment Benefit of a bulk discount which then may not apply? Behrend & Co Ltd v Produce Brokers Co Ltd – Ship, only able to unload part of the purchase – cotton seed. Intended to unload the rest after they had unloaded in Newcastle. Buyer had never agreed to accept delivery by instalment....