Chapter 5A - Contracts for the sale of goods SOGA79 Flashcards

Question

Implied Terms Relationship between Section 14(2) and Section 14(3) Case: Jewson Ltd v Kelly (2003)

Answer 1

Case: Jewson Ltd v Kelly (2003) Kelly acquired a former school building, which he was going to convert into flats. He bought 12 electric boilers from Jewson Ltd but didn't pay them. Jewson sued, and Kelly claimed for damages for breach of Sections 14(2) and (3) arguing that boilers relied upon peak electricity, thereby reducing the Standard Assessment Procedure energy ratings for the flat, and therefore his ability to market the flats. This made him fail payments on the loan. There was nothing unsatisfactory with the boilers, but Kelly had made it clear the boilers were to be placed in flats for sale, but there was nothing discussed or asked about electricity ratings, but this was partial reliance on skills of seller. Held: boilers were fit for purpose and were there was no breach of Sections 14 (2) and (3)

Answer 2

Buyer can sue supplier for sale of defective goods; supplier can sue manufacturer, if necessary.

Answer 3

Under Section 14 liability as a whole is strict, that means there will be liability even if there is no direct fault of the seller. Non-consumer sales only, if the breach of Section 14 is so slight that is seen as unreasonable for the buyer to reject goods, Section 15 states breach of the implied term may be regarded as a breach of a warranty. Which means damages will be awarded, but goods can't be rejected.

Answer 4

Applies to both B2B and B2C. Implies the following conditions: - bulk must correspond to the sample in quality - buyer will have reasonable opportunity of comparing bulk and sample - goods will be free of defect that are not apparent upon reasonable inspection of sample. Case: Godley v Perry (1960) Retailer offered a consignment of catapults from a manufacturer. He tested one by pulling back the elastic, and there were no defects. A boy bought a catapult, it broke causing him to lose an eye. Held: boy could recover damages from retailer under Section 14(2) and (3). Retailer could recover damages from wholesaler under Section 15.

Answer 5

Any attempt by a business to exclude the implied conditions within Sections 12-15 of SOGA79 is void if the buyer purchases as a consumer pre October 2015, or must be 'reasonable' in a B2B transaction.

Answer 6

It's important to establish who carries the risk at a certain time, therefore knowing at what point ownership is transferred is crucial. Risk transfers with ownership.

Answer 7

These are goods defined and agreed upon the time the contract is made.

Answer 8

Goods not specifically identified at the time of contract, because they are still part of a larger bulk of goods at that point.

Answer 9

Goods that didn't exist at the time the contract was made, or were not in the possession of the seller. Example: a special order

Answer 10

Section 17 states that property passes when the parties intend it to pass. Regard is given to the terms of the contract, conduct of the parties and circumstances of the case. If no intention is expressed or implied, then Section 18 will come into play.

Answer 11

Rule states that property passes to buyer when the contract is made, and it is immaterial if payment has been made or goods delivered. Which means byer may become the owner without having paid or having possession of the goods. Case: Tarling v Baxter (1827) A farmer sold haystack, but it burned down before the buyer took it. Held: purchaser must still pay the price, as ownership passed when contract was made.

Answer 12

Section 61 states that 'deliverable state' means that it must be in such a condition that the buyer would under the contract be bound to take delivery of them. Case: Dennant v Skinner and Collom (1948) Claimant sold ca by auction . Buyer was a swindler and gave a false name and address and asked to take the car in return of a cheque. The claimant allowed, but made him sign a document stating the car would only pass to him after cheque was met. Buyer sold the car, which was then resold to defendant. Held: intention of parties as expressed in this document was too late to prevent property from passing, as contract took place on the fall of auctioneer's hammer. And according to Rule 1 property passes when contract takes place, despite payment or possession.

Answer 13

Where there is a contract for the sale of specific goods, and seller is bound to do something to the goods to make them in a deliverable state, then property doesn't pass until that has been done and buyer has been given notice that it has been done.

Answer 14

Where there is a contract for the sale of specific goods, but seller has been bound to weigh, measure, test or do some other act, in order to ascertain the price, property doesn't pass until that has been done and buyer has been given notice that it has been done.

Answer 15

When goods are delivered to buyer on approval, or on sale-to-return, ownership passes to the buyer when they signify approval or acceptance, or does an act that adopts the transaction (such as reselling the goods). Ownership also passes if buyer retains the goods without notice of rejection, for more than a reasonable time. Case: Elphick v Barnes (1880) A horse was handed over on approval for 8 days. It died on the third day. Held: risk remained with seller, as ownership would only pass after the stipulated time.

Answer 16

Section 16 states that in a contract for the sale of ascertained goods, no property can be transferred unless and until the goods are ascertained. When it is unclear when parties intend ownership to pass, Section 18 Rules come into play.

Answer 17

Where there is a contract for the sale of unascertained or future goods by description, and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller or by the assent of the buyer or by the buyer with assent of the seller. Assent may be expressed or implied and may be given before the appropriation.

Answer 18

Goods are 'unconditionally appropriated' when parties agree to separate the goods from the bulk and earmark them for a particular buyer. For Future goods this happens when the manufacturing process is complete and one particular item in the production is earmarked for a particular buyer. Case: Healy v Howlett & Sons (1917) Claimant agreed to dispatch 20 boxes of fish to the defendant, out of a 190 boxes that he placed on a train. Boxes were intended for various customers. Train was delayed and fish went off. Held: property of goods remained with the seller, because there had been no appropriation.

Answer 19

Case: Philip Head and Sons v Showfronts Ltd (1970) Seller agreed to deliver and lay fitted carpets. They were left overnight in the buyer's premises to be fitted the next day. Carpets were stolen. Held: Risk remained with seller, as they were not in a deliverable state when they were stolen, as buyer ordered fitted carpets.

Answer 20

States that on payment of the price , buyer becomes an 'owner in common' of the bulk. That means he has an 'undivided share' in the goods. If bulk is smaller than anticipated, then a proportionate share of what there is.

Answer 21

Romalpa Clause (named after a case that raise this clause): in order to protect themselves, sellers may want to include a clause that the property of goods is only to pass to the buyer until payment has been made.

Answer 22

Section 19 states that the seller reserves a right of disposal of the goods, pending fulfilment of some condition (payment of the purchase price). This protects seller in case buyer goes bankrupt, or goes into liquidation.

Answer 23

Difficulties arise when goods have been mixed with others or resold. Case: Aluminium Industry v Romalpa Aluminium (1976) Aluminium Industry sold aluminium to Romalpa. Contracted stated that ownership only passed after foils were all paid in full. If resold or mixed they would have to pay proceeds of sale. Romalpa went into liquidation. Held: Aliminium Industry was entitled to have unsold foil returned; and they were entitled to the proceeds of what they had sold, but of unmixed foil only.

Answer 24

If goods have been mixed, they can still be returned if they can be detached from the mixed goods. But if they have been altered beyond that point, it can't be reclaimed anymore. Case: Borden v Scottish Timber (1981) Claimant supplied resin to the defendants, which was to be used in the creation of chipboard. It was clearly stipulated that it would only be used once it was paid for, because as soon as it was mixed with other materials, they would no longer be recoverable. Contract had a clause stipulating title would only pass when goods were paid for in full. Receiver was appointed, and claimants stated they were entitled to the proceeds of the chipboard. Held: Resin ceased to exist as soon as it was manufactured, and it could not be traced to the chipboard. So they couldn't claim either the chipboard or the proceeds of it.

Answer 25

Case: Re Pearchdart (1983) Claimants supplied a company with leather to be used to manufacture handbags. Reservation of title stated claimants retained ownership, until paid in full, also that they owned any products made from the leather until they were sold, and they would be entitled to the proceeds. Received was appointed and it was agreed that claimants were entitled to the leather that remained unmanufactured. Held: As soon as leather was manufactured it was no longer sole property of the claimants. To have the rights on the proceeds, they should have a charge on the company's assets.

Answer 26

Accidental damage covers a variety of circumstances. It matters to the contracting parties as to whom is bearing the risk at any one moment, and how it related to the ownership or possession of the goods.

Answer 27

Unless otherwise agreed, goods remain in the possession of the seller until transferred to the buyer. When transferred they are at the buyers risk, regardless if they have been made or not.

Answer 28

States that when delivery has been delayed due to fault of one of the parties. Case: Demby Hamilton v Barden (1949) Seller correctly stored a quantity of apple juice in casks. Buyer was late in taking delivery and juice deteriorated. Held: buyer caused the delay, so he had to bear the loss.

Answer 29

Buyer is entitled to reject goods that have been damaged in transit. But once risk passed to buyer, seller is relieved of liability of loss or the damage of the goods, unless they were cause by their negligence. In commercial cases, parties may agree that buyer has the risk before ownership. In this case, buyer should take precautions by taking appropriate insurance. If a third party causes the damage, buyer still has to pay the price and can sue third party for damages.

Answer 30

Where the sale is to a consumer, goods remain at the risk of the seller until delivery. These regulations were revoked after the Consumer Credit Act 2015, which have regulations that then took precedence.

Answer 31

These Sections were added to satisfied: the Sales of Goods Act 1979 by the Sale of Goods Amendment Act 1995. Section 20A allows a person who bought a specified quantity of unascertained goods, which are part of an identifiable bulk, to become a owner in common of the bulk, even though their share as not yet been ascertained. These conditions must be: 1. specific quantity of the bulk must have been bought 2. goods must be part of an identified bulk, which is identified in the contract, or by subsequent agreement between the parties. 3. Buyer must have paid the price for some or all of the goods, which refer to the bulk stated in the contract 4. Buyer doesn't become owner of their share of the goods. They are co-owners. Only when appropriated by the owner, will they be owned by buyer.`

Answer 32

Mass or collection of goods of the same kind, which is: - contained in a defined space or area - such that any goods are interchangeable with any other goods therein of the same number and quantity

Answer 33

If goods are partially destroyed the loss should fall on the seller, unless agreed differently. Section 20B(1) states the person who co-owns the bulk is deemed to have consented to delivery out of the bulk. Section 20A and 20B do not apply when bulk is not identified, regardless of buyer has paid in advance or not. Where bulk is not identifiable, there can be no passing of property until goods have become appropriated to the contract under Section 18 Rule 5.

Answer 34

These are borne by the seller. Seller may also be liable for damages for failure of delivery, or for delivering damaged goods.

Answer 35

Where the sale was of specific goods, but they have perished without the knowledge of the seller. This makes the contract void. Case: Asfar & Co v Blundell (1896) Cargo of dates sank in harbour and remained immersed for 2 days. When retrieved they had deteriorated, Held: buyer was not obliged to accept them. Seller bears the loss, but has no liability to the buyer, as contract became void. If seller had tried to sell the goods knowing they have perished, they would be guilty of fraud.

Answer 36

There is a difference between losses between the making of the contract and the passing of property; and those that occur after the property has passed.

Answer 37

General rule is that the seller bears the loss, and may be sued for non-delivery However, if they are specific goods, Section 7 offers seller some relief. Section 7 - which states that if goods perish without the fault of any of the parties contract will be void. Contract will be frustrated and any moneys are returnable, and no further payments due. Goods must have perished, and not just be damaged.

Answer 38

Section 20 the risks are borne by the buyer, as they are the owner. 20(2) if delivery has been delayed through the fault of either party, the goods are at the risk of that party. 20(3) seller who remains in possession of the goods is under a duty as bailee to take reasonable care of them. They will however be at the risk of the buyer, if they are damaged through the fault of the seller.

Answer 39

Nemo dat quod non habet - Only the seller can sell the goods. Section 21 - if goods are sold by someone who is not the owner nor has the owner's authority, doesn't owe the goods, and can therefore not pass property of the goods.

Answer 40

Any goods obtained from a non-owner must be returned to true owner, who is able to sue in the tort of conversion for their return. There are a number of exceptions, due to the fact that buyers may be an innocent position: Sale by Agent Estoppel Sales under voidable title Re-sale by seller in possession Re-sale by buyer in possession of goods, with consetn of seller Motor vehicles on hire purchase Sales under common law or statutory powers

Answer 41

If true owner of goods appears to confirm that seller has the right to sell their goods, this is called 'estoppel'.. This literally means they can't deny later that the seller had the right. Case: Eastern Distributors v Goldring (1957) Murphy owned a van. He wanted to buy a car from a dealer, but couldn't raise deposit. So agreed to give him the registration book for his van, by making the dealer the apparent owner, which enabled dealer to sell it and raise deposit for Murphy. Dealer approached a finance company, suggesting the bought both the van and the car, with the condition they would then both be let to Murphy on HP. Finance company bought van, but refused to finance the car. Dealer didn't inform Murphy of the problem, but sold the van anyway, making Murphy unable to buy the car. Held: finance company obtained a good title of the van, even though the dealer had no right to sell it. But Murphy's conduct prevented him from denying that dealer had no right to sell, due to estoppel.

Answer 42

Does apply to an agreement to sell. Case: Shaw v Commissioner of the Police for the Metropolis (1987) Claimant agreed to buy a Porsche motor car from a rogue. Rogue obtained it by saying he wanted to show it to a prospective buyer. He also acquired a document from the owner stating he had bought the car, but that was untrue. Rogue left car with claimant and disappeared before being paid. Claimant sated he had acquired good title of the car under Section 21(1), since the document prevented true owner from claiming the good back. Held: original owner was able to reclaim title back, as Section 21 (1) doesn't apply where buyer had only agreed to buy.

Answer 43

Goods sold by a mercantile agent on behalf of a true owner passes good title to the innocent third party. Conditions below: - true owner must have consented to the goods being in possession of the agent with a view to sell. If they possess goods for any other purpose, there will be no consent. - agent must be acting in their ordinary course of business - buyer must be unaware of any lack of authority on the part of the agent. Case: Folkes v King (1923) Agent had authority to sell the car for a minimum price of £579. He sold it for £340. Held: Buyer received a good title. Agent had authority to sell, there were no unusual circumstances, and buyer had no knowledge about the restriction imposed on the agent. In this case seller could only sue agent, for exceeding their authority.

Answer 44

Purchaser who buys from a non-owner gets good title when the non-owner has common law or statutory powers under which they are allowed to sell goods in their possession to recover debts due to them. Examples are pawnbrokers

Answer 45

Where goods are sold under a voidable contract and then transferred to an innocent party before the contract is set aside, the third party acquires the good title of the goods.

Answer 46

If a person who has sold goods remains in possession of them, or of documents of title relating to them, and then attempts to sell them again. That innocent third party will receive good title of the goods as soon as goods or title are received. The original buyer will have the right to sue the seller under Section 27, failure to deliver goods under the first transaction.

Answer 47

Similar to sale by agent. Original buyer must remain in possession of the goods, and the new buyer must act in good faith. Case: Newtons of Wembley v Williams (1964) Claimants sold the car to a man who paid with a worthless cheque. When cheque was dishonoured, plaintiffs immediately rescinded the contract by informing the police. The man then resold the car in, Warren Street, London, an established street market for used cars, to an innocent party. Held: Third party could retain the title. Man was in possession of the consent of the true owner, even though it had been obtained by deception. If goods had been stolen, Section 25 would not protect a subsequent innocent purchaser.

Answer 48

Case: National Employers Mutual Insurance Association v Jones (1990) Thief stole a van and sold it to A, Van passed through several more hands before being acquired by Jones in good faith. Original owner sued Jones for the return of the van. But he claimed he was the owner of the van under Section 25. Held: Jones was not the owner. Thief was not a mercantile agent, he therefore had no good title of the van. Goods were never in his possession with the consent of the true owner.

Answer 49

This is an exception to the Nemo Dat Rule, where a person in possession of a vehicle subject to HP sells it to a private buyer, who buys it in good faith an unaware of that agreement. The private buyer get good title of the vehicle. A finance company or a dealer would not. Most finance companies register their agreements with an organisation called Hire Purchase Information Limited. Therefore they have the option to check if any vehicle is subject to HP. Case: GE Capital Bank v Rushton and Jenking (2005) bank provided finance to motor dealers. Bank entered into agreement with T & T Motors and the bank advances £100,000 for them to buy cars for the business. But bank would retain the title of any vehicle until it was fully paid, T & T needed further funding to pay for the cars and obtained it from Jenking, a short-term loan of £40,000, secured by a debenture and paid on demand. The reclaimed the loan very quickly which meant T & T had to sell them and Rushton some of the cars. When bank found out they terminated the agreement and attempted to recover the cars. T & T went into liquidation. Rushton stated they had protection from the Hire Purchase Act. Held: Court of Appeal held Rushton had bought the cars as a business, with a view to sell them on profit. They could therefore not claim protection under the Act. Jenking was a private purchaser, so he acquired them in bona fide and could keep title of the cars.

Answer 50

Contract for the sale of goods obliges the seller to deliver the goods and the buyer to pay and accept them (section 27). Section 28: unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions.

Answer 51

Unless otherwise agreed buyer must collect the goods from the seller's place of business. Under 32 delivery to a carrier will suffice.

Answer 52

If time is fixed by the contract, it is likely that failing to meet that date will be breach of a condition, which entitles buyer to repudiate the contract and sue for non-delivery. This presumption is particularly strong when in commercial cases goods are being carried by sea. Case: Bowes v Shand (1877) Cargo of rice was sold on terms that it would be shipped on board of the Rajah of Cochin during the month of March or April 1874. Seven eights were loaded in February 1874. Buyer refused to accept, as it wasn't shipped at the correct time. Held: buyer was entitled to reject the cargo, as condition was broken. If buyer waives their right to repudiate, buyer can only reintroduce it by giving the seller reasonable notice if intention to do so.

Answer 53

``` Section 29(3) If time has not been agreed, goods must be delivered within a reasonable time. Any demand for delivery, must be made within a reasonable hour. ``` Remedy Section 37 if buyer fails to take delivery within reasonable time, they will be liable for any resulting loss, and for care and custody charges.

Answer 54

Delivery is the transfer of goods. It may affected by: - physically handing the goods over - handing over the means of control, such as keys to premises where goods are stored - handing over documents of title, such as bill of lading or registration book (motor vehicle) - if the goods are in possession of a third party, they must acknowledge they are holding the goods on behalf of the buyer.

Answer 55

Payment and price will be fixed by the contract, or it will determine how it will be fixed. It may also be determined by the course of the dealings between the parties, if it is a silent contract (Section 8 (1)). Buyer is obliged to pay a reasonable price (Section 8 (2)). Time of payment is subject to contractual negotiation between the parties. If there is no express agreement, payment will be due on transfer of the goods, as per Section 28.

Answer 56

Section 30 - if seller delivers a smaller amount than agreed, buyer may reject the goods. If they accept, they must pay at contract rate. If seller delivers a larger amount than ordered: - buyer can accept quantity ordered and reject the remainder. - buyer may accept the entire consignment, paying for additional goods at the contract rate - buyer may reject the entire consignment Minute deviations do not entitle non-consumer buyer to repudiate: Case: Shipton Anderson v Weil Bros (1912) W ordered 4,950 tons of wheat. S delivered 4,950 tons and 55 pounds. Held: difference was so small buyer was not entitled to reject

Answer 57

commercial buyer may not reject goods for delivery of the wrong quantity where seller can show the excess or shortfall is so slight that it would be unreasonab;e for buyer to reject the goods.

Answer 58

This sections states buyer is not bound to accept delivery by instalments, unless agreed so. If agreed, breach can happen in each one of the instalments, which will lead to an award of damages. Whether or not it justifies repudiation of the whole contract, depends on if the contract is severable/divisible. If this is the case, each instalment is separately paid for. If the agreement was silent, court will look into the gravity of the breach and likelihood of it happen again. Case: Maple Flock v Universal Furniture Products (1934) seller agreed to sell 100 tons of flock by instalments. First 15 instalments were good, the 16th was sub-standard. the other following 4 were of good quality too. held: Buyers were no entitled to repudiate the contract. Case: Robert A Munro v Meyer (1930) Contract was for the sale of 1500 tons of bone and meal by instalments. First 651 tons were adulterated with husks. Held: buyers were entitled the repudiate. Buyers were not obliged any future instalments and were also entitled to damages for deliveries already received. If defect was spotted on time, they could have also rejected these deliveries.

Answer 59

Circumstances in which acceptance of goods is deemed to have taken place, if the following have taken place: - buyer informs seller they have accepted (S35(1)(a)) - they don't do anything inconsistent with the ownership of the goods - retains the goods after the lapse of a reasonable time without informing the seller that thye have rejected

Answer 60

Buyer has reasonable time to inspect the goods after delivery and compare it to the sample. If after checking they inform the seller they are repudiating the goods, per Section 36, seller needs to arrange collection, as buyer is under no duty to return them.

Answer 61

Consumer cannot lose their right to reasonable time opportunity to examine the goods, by comparing bulk to the sample. and thereafter to reject the goods.

Answer 62

The main factor in deciding whether the goods have been accepted after a lapse of time, is to confirm the buyer has had the time to examine the goods after delivery

Answer 63

Buyer is not deemed to have accepted the goods, if they have asked for repair of goods or if goods have been delivered elsewhere, due to being sold or delivered to a third party.

Answer 64

If buyer accepts part of a larger commercial unit, they are deemed to have accepted all the goods which are part of the larger unit.

Answer 65

Clegg agreed to buy a special order of a yacht from Andersson, which would have a particular keel 'in accordance to the manufacturer's standard specifications'. Manufacturer delivered to Andersson in July, and he delivered to Clegg in August. Andersson realised it was heaver than the specifications and advised Clegg at delivery point. Clegg asked for more information in August and September, but only got an answer in February the following year. Clegg's solicitors wrote to Andersson in March rejecting the goods and claiming a refund. Andersoon claimed the 3 weeks between February and March was a large enough gap to constitute acceptance. Held: Court of Appeal found the yacht of non-satisfactory quality, because the keel being overweight. the 3 week lapse didn't exceed the reasonable time, so Clegg was entitled to reject the yacht,

Answer 66

Case: J&H v Lloyd Ltd (2007) Claimant bought a sophisticated seed drill. As soon as it was used he noticed it vibrated very badly and operated only for a short time before they reported to the defendant. Defendant agreed to collect and repair or replace. they returned it saying it has been repaired, but they never specified what had caused the malfunction. Later the claimant discovered that mechanical bearings had been missing. They were therefore concerned this with affect the equipment furthter, so they rejected the goods. Held: claimant was entitled to reject the goods based on Section 35(6)(a) because they were able to make an informed decision after the goods were returned after repair. House of Lords added, the defendant should have been clear about the issue that caused the machine to fail. Also seller refused to give a 'clean sheet' from the engineer who repaired it.

Answer 67

Action for the price Damages for non-acceptance Lien Stoppage in transit Right of re-sale

Answer 68

Damages Rejection of the goods Tort of negligence Trade Descriptions Act 1968

Answer 69

2 possible actions: seek financial compensation (also called personal actions) or taken action on the goods (also called real action)

Answer 70

Simply means that seller can sue the buyer for the price. this is only where property of goods was passed, or where contract states a payment date that has expired. Case: Colley v Overseas Exporters (1921) Quantity of ascertained leather goods was sold on FOB terms. Therefore buyer was under contractual obligation to identify and nominate goods to be unloaded and thus ascertain them. Buyer failed and goods were left lying on the docks. Seller sued for contract price. Held: sellers couldn't sue for the price, because the contract didn't fix a definite date for payment, and property had no passed to buyer.

Answer 71

It is required that property has not passed. There may be a requirement to calculate the extent of the loss using the common market price to recover the difference. If the value of the goods is higher than market price, then seller will receive nominal damages. Seller can resell the goods. Seller has the duty to mitigate the loss (by reselling, for instance) Case: WL Thompson v Robinson (1995) Defendants ordered a new Vanguard, but refused to accept delivery. they said they would only pay nominal damages, as market price was the same. Held: there was no available market for the Vanguard,as it was an older model and supply exceeded demand. Section 50 (3) didn't apply and seller resold for a lower amount. They were allowed to be paid contract price.

Answer 72

Case: Charter v Sullivan (1957) Buyer refused to accept a new Hillman Minx car, which they ordered from dealer. Demand exceeded the supply, so dealer would have no difficulty in finding another buyer. Held: dealer was entitled to nominal damages.

Answer 73

If buyer has little or no money and failed to pay because of that. So this may mean the 'personal actions' may be pointless, because they may not be able to recover damages. 'Real actions' may be taken, even if property of goods has been passed.

Answer 74

Seller's rights to withhold delivery until they receive the price. Requirements: good's must remain in seller's possession. If credit terms have been agreed, it can also be done if credit terms have passed. If goods have been passed though, seller cannot repossess the goods, nor can they resell them.

Answer 75

Appropriated when goods are with the carrier, on the course of delivery to the buyer. Requirements: only if buyer has become insolvent while the goods are in the course of delivery to the buyer.

Answer 76

Lien and Stoppage in Transit only allow the unpaid seller to retain the goods, but not to re-sell them. If seller has retained the goods, they are allowed to re-sell them in the following circumstances: - when goods are perishable - when seller tells buyer about intention to re-sell, and buyer still fails to pay - when contract expressly states seller has the right to re-sell, if buyer defaults In addition, seller can also claim for damages, if the re-sale fails to meet the contract price, provided that they have looked for the best price reasonably obtainable. In case they make profit, they are allowed to keep it

Answer 77

Damages are allowed to buyer if: - seller wrongfully delivers the goods - seller breaches a warranty - seller breaches a condition, but buyer still accepts the goods Damages: the estimated loss directly resulting from the ordinary course of events from the seller's breach. Where no real loss occurs, i.e. goods are obtained from another seller, damages may only be nominal.

Answer 78

If seller breaches a condition. If only a warranty has been breached, buyer cannot reject, but can claim damages. Case: Jones v Gallagher and Gallagher (2005) Joneses decided to reject a fitted kitchen after work was complete. Their main complaint was that the colour was wrong, and then raised other concerns. They argued they could reject under Section 35. Held: right to reject has been lost, as several weeks have elapsed before they sought to exercise it. Colour would have noticeable straightaway and they waited longer before deciding to reject the goods.

Answer 79

Case: Lee v York and Marine Ltd (1977) Ms Lee bought a second hand car from defendants in March, then she discovered the brakes were in such bad condition that she would have failed to make an emergency stop. She had repairs that amount to £100 and then told sellers she wanted to reject the car. Held: car sale breached a condition. But she failed to notify seller of rejection within a reasonable time, she was only entitled to damages for breach of warranty, Case: Roger v Parish (1987) Buyer bough a new car for £16,000, top range model. It was defective and replaced by sellers. Within 6 months the replacement car showed engine defects and bodywork started deteriorating. Buyer decided to remedy the defects, but they gave up and rejected. Held: Court of Appeal held he could do so. The price was high and vehicle was non-merchantable. The expected quality and comfort were not provided.

Answer 80

When court considers monetary award is not adequate. Specially if goods are unique and/or difficult to obtain. Case: Cohen v Roche (1927) S contracted to sell Hepplewhite furniture to B, but failed to deliver. S sought specific performance. Held: specific performance refused, even though this furniture is rare, it was not unique

Chapter 5A - Contracts for the sale of goods SOGA79 Flashcards

(104 cards)