C2 - Introduction to SGA

Question 1

Ingram v Little

Answer 1

Mistake. A swindler presented himself as a well-known person of substance and bought on credit. Held that there was no contract as the offer was made to the mistaken identity he had taken, not the fraudster. This is the case of the two old ladies.

Question 2

Shogun Finance v Hudson

Answer 2

Fraudster hired a car from Shogun and sold it to a 3rd under false name. C between frudster and finance company was void: so Hudson was liable to give it back - it wasn’t the fraudster’s to sell. It is a case of unilateral mistake involving mistaken identity: the finance company did not intend to contract with the fraudster: but with Mr. Patel: the assumed identity.

Question 3

Phillips v Brooks

Answer 3

fake name given to buy a ring: but in person. C valid.

Question 4

Cundy v Lindsay

Answer 4

Fraudster used a name very close to aknown company but documents had company name. Void

Question 5

King’s Norton v Edrige

Answer 5

Fraudster made up a fake company and pretended to be big. Contract valid: it was this fake company that the claimant intended to contract with. There was mistake on the attributes: not identity.

Question 6

Hartog v Colin

Answer 6

UNILATERAL MISTAKE OVER THE TERMS OF THE CONTRACT. Where one party knows the other party is mistaken as to the terms: the contract will be void. Here: he intended to sell skins by the piece: but listed per pound. Contract void because buyer knew this was a mistake.

Question 7

Tamplin v James

Answer 7

Mistake. The defnedant agreed to buy a house under the mistaken impression that the field came with it. The seller didn’t know about this and the buyer shouldn’t have made this mistake. Applying the reasonable person test, held that the buyer was liable on the contract without the field.

Question 8

Raffles v Wichelhaus

Question 9

Walford v Miles [1992] 2 AC 128 -

Answer 9

Duty to negotiate unenforceable. Cannot make a promise for an undetermined amount of time. If it had been a promise for a bound amount of time and had separate consideration, it would be enforceable. A duty to negotiate in good faith is as unworkable in practice as it is inherently inconsistent with the position of a negotiating party. It is here that the uncertainty lies. In my judgment, while negotiations are in existence either party is entitled to withdraw from these negotiations, at any time and for any reason. There can be thus no obligation to continue to negotiate until there is a ‘proper reason’ to withdraw. Accordingly, a bare agreement to negotiate has no legal content.’

Question 10

May and Butcher Ltd v The King [1934] 2 KB 17 -

Answer 10

An agreement to agree is not a contract, the terms must have certainty. There was no agreement between the parties. A contract for the sale of the tents had never in fact been concluded. This was because a fundamental term of the agreement that was necessary for the sale to be completed had not been agreed. As such, there could not be a contract. Whilst s8 Sale of Goods Act 1893 provided that a price could be fixed in the future, s9 Sale of Goods Act 1893 also provided that if that price could not be fixed by a third party, then no agreement could be made. No third party could set the price for the tents, and the court could not imply a price into the agreement. Therefore, no agreement had been made. The agreement between the claimants and defendant therefore was simply an agreement to agree, and not enforceable.

Question 11

Hillas and Co v Arcos Ltd (1932) 147 LT 503 -

Answer 11

PREVIOUS COURSE OF DEALINGS between the parties can clarify uncertain terms. CUSTOM can also clarify, here they were both familiar with the timber industry. Where the courts can interpret an agreement to keep it upheld, being able to interpret the uncertain terms, it will do so for commercial agreements, as they are generally taken to be undertaken with the intention to be legally bound. There was a valid and enforceable agreement that allowed Hillas to purchase 100,000 staves of wood for at a reduced rate. This was more than a mere ‘agreement to agree’ because the only thing necessary for the agreement to be brought into existence was for the buyers to decide to exercise their option to purchase the wood. Whilst the price had yet to be agreed, this was only because it naturally fluctuated as a commodity depending on market conditions. Where the issue was in the balance, as here, it was held that the court should try to interpret the words of the agreement in such a way as to preserve the subject matter of the agreement rather than destroying it, and contracts made between merchants in this way should be upheld where the court can interpret the terms in order to do so.

Question 12

Foley v Classique Coaches Ltd (1943) 2 KB 1-

Answer 12

Once performance has begun, courts will usually enforce the contract. They had been performing under the agreement for years and were intended to be bound by the agreement. Furthermore, they had included an arbitration clause. The agreement was not void for uncertainty simply because the price for the fuel had not been mentioned in the agreement. Classique had performed their agreement for several years, and this obligation could not simply be repudiated. Where the parties had acted as though an agreement had been created and performed their obligations in this way, there was instead an implied term that the price of the fuel to be purchased under the agreement was to be reasonable. Furthermore, if agreement could not be reached on what was a reasonable or fair price, the agreement contained an arbitration clause specifically designed to resolve disputes of this nature. Classique coaches were therefore in breach of contract by failing to purchase fuel from Foley, as required by the agreement.

Question 13

Sudbrook Trading Estate Ltd v Eggleton (1893) 1 AC 444

Answer 13

VAGUENESS - COURTS CAN CLARIFY VAGUE TERMS by relying on the principle of REASONABLENESS. There was a dispute regarding an option to purchase a leased property, but there was a clause stipulating a mechanism for valuing the property in cases the parties didn’t agree. The seller refused to nominate one, whereby the court nominated its own valuor to solve the lack of valuor, the contract was upheld.

Question 14

Courntey & Fairbairn v Tolaini Bros

Answer 14

Refused recognition of a contract at a price “to be agreed” - having an arbitration clause would modify this finding.

Question 15

Campbell v Edwards

Answer 15

Where a sale at a valuation is agreed upon and the valuation is made, it cannot be upset merely on the ground that the valuer has been engligent or has set about the valuation in an incorrect manner - as long as it is honest, it is binding. If there is fraud or collusion, then it’s different, of course.

Question 16

PST Energy 7 SHipping v OW Bunker Malta

Answer 16

All the good were consumed before payment could become due (and because there were retention of property clauses until payment was) and so the property was never transferred - could not be construed as a sale of goods. Series of subcontracting contracts of the obligations.

Question 17

McManus v Rotescue

Answer 17

Reserve price at auction. It was stated that there was a reserve price, but the auctioneer forgot about it and gave it to the highest bidder. He rememberd and didn’t sign the title over, got sued. Held that there could not be action since he couldn’t have accepted a price below the reserve, and even if he did, the apparent authority had been exceeded and the buyer would have known it.

Question 18

Beta Computers v Adobe

Answer 18

The defneder had ordered a standard computer package. When he received it, he saw that opening the package would amount to agreeing to the licensing agreement. He didn’t agree, send the goods back, got sued. This was considered a sui generis contract that contained elements of a sale of goods as well the grant of license. Found that they could not have agreed on the terms until they both knew what the terms were - he was entitled to reject once he knew the terms.

Question 19

Eurodynamics v General Automation

Answer 19

Transfer of software is transfer of property. The basic argument that the parties shold not depend upon the medium of supply must be right.

Question 20

St Albans City v International Computers

Answer 20

A computer disk is within the definition of “goods”. A computer program, though, is not goods. Howerver, when a defective program is supplied on a disk it will e in breach of the terms as to quality and fitness implied by s15 of the Sale of Goods Act

Question 21

Saphena Computing Ltd v Allied Collection Agencies

Answer 21

Making the supplier liable is a convenient manner of passing liability back up the line ultimately back to the manufacturer.

Question 22

Morgan v Russell

Answer 22

Sale of cinders and slag, which were not in definite or detached heaps resting on the ground, was not a sale of goods but a sale of an interest in land, and the SGA did not apply.

Question 23

Types of Goods

Answer 23

Existing Goods

Future Goods - Howell v Coupland - 200 tons of potatoes to be grown on a particular plot of land, held to be specific goods.

A spes - a chance

Specific goods (this specific car or this lot of wheat) v unascertained goods, 3 main categories:

1. Goods to be manufactured or grown by the seller (necessarily future goods)
2. Purely generic goods - 1000 tons of wheat
3. An unidentified part of a specifed whole - 1000 tones out of a particular load of 2000.

Question 24

Suisse Atlantque v Rotterdamnsche

Answer 24

Fundamental Terms.

Question 25

Kursell v Timber Operators

Answer 25

Sale of all the merchantable timber growin on a certa date in a forest in Latvia, which can be considered unascertained goods because it wasn’t clear which trees were to be cut or not, couldn’t be known at the time. The government natioanlised the forest shortly after the agreement, the Courts found that the sellers still had property as the goods had not been ascertained at the date of the agreement.

Question 26

Sale v Gift

Answer 26

A gift is different because there is no consideration. Esso Petroleum v Customs and Excise - was it a gift, a sale, or a collateral contract to the petrol contract? It matters because of the obligations created and the duties of the seller. In a sale, ownership can pass by mere agreement, whereas in a gift, it would require transfer of possession or a deed

Question 27

Sale v barter or exchange

Answer 27

SGA - consideration needs to be money in a sale. This doesn’t usually matter since the Supply of Goods and Services Act 1982 carries a lot of the same protections - a lot off the rules that apply to sale will apply at common law. Can ownership be passed by agreement in the case of barter?

Aldridge v Johnson - 32 bullocks for 100 quarters of barley. Had filled 155 sacks, then dumped them back out. He was entitled to the 155 which became his property as soon as they were measured out and filled, and he didn’t lose possession of them when they were dumped, but he had never gained posession of the rest of the sacks.

GJ Dawson v H&G Dutfield

Question 28

Sale v Transfer of Land

Answer 28

There is overlap between these two when things are sold that grown from the land or are from the land. A transfer of land may also include a sale of goods, for instance.

Question 29

Sale v bailment

Answer 29

A bailment involves the delivery of goods by one person to another for a limmited purpose, on terms that the goods will be returend to the bailor or delivered toa third party in accordance iwth his instructions at the conslusion of the bailment.

Question 30

Sale v hire-purchase

Answer 30

A lease-purchase, goods are hired for a period, at the end of which the hirer may exercise an option to buy the goods, usually by a further payment. This is different from a sale by installment (where the buyer has bought the goods, but they are not yet his until the final payment is due), whereas here, he only has an option to buy at the end, not an obligation, which means he can’t transfer title, unlike in the other case.

Question 31

Sale v transaction by way of security

Answer 31

These include the pledge, the lien, the mortgage and the charge. In a mortgage, both the lender and the buyer have an interest in the property until it is paid in full.

Question 32

Sale v contract for work and materials

Answer 32

Trebor Bassett v ADT Fire. They had bought a system from ADT for fire suppression and the warehouse burned down. THey sued ADT, but ADT defended that there was contributory negligence on Trebor’s part (which is only possible if this was not a sale of goods), the Court granted the relief, meaning it was a supply or work and materials and not a sale of goods, so it is irrelevant to determine whether or not they were of good quality as required by the ACT.

Question 33

Sale v Agency

Answer 33

Sometimes an agent will engage in sales on behalf of his Principal. Sometimes, however, he will be acquiring goods himself and then reselling them at a profit instead of taking a commission.

Question 34

Sale v licence to use IP

Answer 34

The medium is bailed rather than sold to avoid the IP on the medium being considered a sale. Usually, the CD is sold, but the IP rights are rented.

Question 35

British Car Acutions v Wright

Answer 35

Auction. The bidder is the offeror and the the acutioneer decides whether to accept or reject the bid.

Question 36

Fenwick v MacDonald Fraser

Answer 36

Until the fall of the hammer each bidder may withdraw the bid adn the acutioneer may withdraw the item frrom sale

Question 37

Warlow v Harrisson

Answer 37

Without reserve - even if below value, the auctioneer has to give the item to the highest bidder.