C3 - Types of Obligations

Question 1

Suisse Atlantique v Rotterdamsche

Answer 1

Did away with fundamental terms. It is a rule of construction and not a rule of law that an exemption clause can not cover a fundament breach.

1. Fundamental term
2. Condition
3. Warranty

Question 2

Bunge Corporation v Tradax

Answer 2

Time clauses in a mercantile contract are conditions

Question 3

Implied terms that are conditions in SGA

Answer 3

1. satisfactory quality, fit for purpose, goods must fit the description - these are all conditions

Question 4

Rowland v Divall

Answer 4

You must have a right to sell the goods - not to confuse with being the owner. This is a condition. Here they bought a car, turned out it was stolen. They sued for the money and won even though they couldn’t return the car since it had been seized by the police.

Question 5

Arcos v Ronasen

Answer 5

Wooden staves did not comply with the contract description, so he was allowed to reject the contract.

Question 6

Re Moore & Co

Answer 6

Was allowed to reject the tins as their packing did not comply with the contract description. Non-compliance with the description is a breach of condition, so the buyer is entitled to reject the goods and seek a full refund

Question 7

Godley v Perry

Answer 7

Satisfactory quality must be met even if the goods are cheap. Here they were cheap plastic catapults, but they were defective and didn’t meet satisfactory quality.

Question 8

Satisfactory quality

Answer 8

goods are of sq if they meet the standard of a reasonable person taking into account factors such as description and price. “Fitness for all purposes for which the goods are commonly supplied; appearance and finish; freedom from minor defects; safety and durability.

Question 9

Geddling v Marsh

Answer 9

The containers must be of sq also. Here the mineral water came in a container that remained the seller’s as it came with a caution price to be returned - it burst and hurt his hand, there was a claim here.

Question 10

Exceptions to satisfactory quality

Answer 10

1. It was brought to the buyer’s attention
2. Goods were examined and the quality could have been ascertained
3. If by sample, if the inspection of the sample would have shown the defect

Question 11

Bristol Tramways v Fiat Motors

Answer 11

If the seller is informed of the buyer’s purpose for buying the goods, the goods must comply with that purpose - unless the buyer did not rely on the seller or if it was unreasonable for him to do so. Here, they obtained damages when they were supplied buses that were not robust enough t o be used in a hilly area.

Question 12

Steels and Busks v Bleecker

Answer 12

The rubber was held to be in accordance with the sample. In sales by sample, the bulk need not only match the sample, it needs to match the description. Acceptance of the goods or affirmation will have the consequence of the buyer being unable to reject the goods, but if only part of the goods have been accepted, he isn’t prevented from terminating the contract on the goods they haven’t accepted.

Question 13

Warranties

Answer 13

Warranties are collateral to the main purpose of a contract, they give rise to damages but not a right to reject the goods and treat the contract as repudiated. Warranties are terms whose breach can never have serious consequences.

Question 14

Mason v Burningham

Answer 14

Bought a second-hand typewriter, spent money fixing it up, but it was stolen. Was able to recover not only the price but also the money spent as a breach of 12.2.b.

Question 15

Hong Kong Fir v Kawasaki

Answer 15

The first case of innonimate terms. There can be serious and trivial breaches of clauses, and the court should look at the consequence of the breach and should permit repudiation only if the consequences are serious.

Question 16

Cehave NV v Bremer - The Hansa Nord

Answer 16

Pulp pellets sold and should have been in good condition - they were a little damaged on arrival. The price had fallen, so he repudiated the contract and bought them on the open market (the very same pellets), and used them for the original purpose. The seller succeeded in breach of contract as the result of the breach of the condition was not serious to the buyer. Implied term of mercahntability is an entirely different thing from an express terms - if it is express, it may or may not be a condition in the strict sense, but if it is implied, thne it is a condition sine qua non.

Question 17

False representations

Answer 17

1. Fraudulent
2. Negligent
3. Innocent

The first two give rise to a right to rescind the contract and damages.

The last gives rise to the ability to rescind the contract, but the courts may award damages instead.

Question 18

Hopkins v Tanqueray

Answer 18

The day before an auction, seller told a buyer the horse was sound - this was held to be a representation. cf. Couchman v Hill

Question 19

Couchman v Hill

Answer 19

The claimant bid for a heifer reliant on the statement by the seller that it was unserved. This was held to be a term of the contract. Cf. Hopkins v Tanqueray.

Question 20

Dick Bentley v Harold Smith

Answer 20

A dealer selling a car said it had 20k miles, it was more. This was held to be a term of the contract as the dealer was in a position to know better.

Question 21

Oscar Chess v Williams

Answer 21

A private seller misrepresented the age of the car (relying on the log), this was false. This statement was held to be a representation. Cf. Dick Bentley - who the expert is matters

Question 22

L’Estrange v Graucob

Answer 22

Exclusion clause is binding even if you didn’t read it

Question 23

Thornton v Shoe Lane Parking

Answer 23

In unsigned documents, the question is whether enough notice was given to the clause before entering the contract

Question 24

Chapelton v Barry

Answer 24

The exlusion and limitation clauses need to be in a contractual document, not a receipt

Question 25

Hollier v Rambler Motors

Answer 25

Any ambiguities in a limitation clause will be interpreted against he who is trying to rely on the clause - contra proferentem rule.

Question 26

Interfoto Picture v Stiletto Visual

Answer 26

Any particularly onerous terms should be grought to the attention of the person to be bound.

Question 27

UCT 77

Answer 27

None of the implied terms under S12 SGA can be excluded. Sections 13-15 can only be limited or excluded to the extent that the term satisfies the requirement of reasonableness

Question 28

CRA 2015

Answer 28

A whole slew of additional things that can’t be limited or excluded in consumer contracts

Question 29

George Mitchell v Finney Lock Seed

Answer 29

They bought old seeds but were supplied inferior seeds, which were not late at all and was unsuitable. There was a limitation clause, but it was held to be unreasonable

Question 30

Reardon Smith Lines v Hansen Tangen

Answer 30

A ship chartered that was supposed to be built at specific shipyard but was built in another. There is a strict rule that goods must match their description, and in a sale of goods case, this would have been a condition. Here the description was treated a warranty, and warned that future cases should be revisited.