Commercial Law Flashcards
Kursell v Timber Operators (1927)
Buyers contracted for all the ‘merchantable timber’ (as defined in the contract) in a forest in Latvia. The Latvian government then nationalised the forest but the buyers claimed property had passed to them. The court held that the contract had been frustrated and that the goods were not ascertained because they had not yet determined which trees were merchantable and which were not. Nor were the trees in a deliverable state under s.18 r.1.
Morgan v Russel & Sons (1909)
No damages were awarded for the breach of a contract of sale for slag and cinders spread across another person’s land. The contract was not a sale of goods because the slag was not in identifiable heaps; the contract was actually for a profit á prendre and no damages could be given for breaching it.
Re Wait (1927)
W contracted to buy 1000 tonnes of wheat which was to arrive on a ship from the US. He agreed to sell 500 to H and payment was made in advanced. (These were unascertained goods at this point because the 500 tonnes was not specifically identified). By the time the ship pulled into port 470 tonnes had been sold already but W was bankrupt. H was listed only as a creditor and he couldn’t claim the 500 tonnes of wheat because ownership cannot pass for unascertained goods even though it had been paid for. Law changed in 1995 in the case of goods paid for in advance.
Rowland v Divall (1923)
R bought a car which, unbeknown to either party, was stolen. The car was confiscated and the buyers sued for a breach of the condition implied by s.12 as to title and thus the contract could be rescinded and the purchase price recovered. The defendant argued that the car, having been painted could not be returned by restitutio in integrum and thus the contract could not be recscinded. The judge disagreed; the defence of impossible restitution is not open to one who had not title in the first place.
Property means the seller’s title to the absolute legal ownership in the goods. It is not an interest on the goods but absolute title. There are some exceptions where someone has something less than absolute title, for example where someone has a finder’s title, can transfer goods in a sale of goods. This will still be a sale of goods.
Hillas & Co v Arcos (1932)
The court rejected an argument that the price was undecided referring to a previous course of dealing to set the price. In May v Butcher which was distinguished in Hillas the court held that a contract which declared the price would be decided ‘from time to time’ was not concluded and the court could not set the price.
Aldridge v Johnson (1857)
The two parties agreed reciprocal sales of bullocks and barley. The defendant filled 155 of the 200 sacks of barley he owed the claimant out of is larger supply of barley in his warehouse but then ordered them to be emptied. The judge held that the claimant was entitled to 155 sacks but not to all 200 because only 155 sacks had been ascertained as Aldridge’s property thus only 155 sacks could be subject to sale; property cannot pass in unascertained goods. This was also a case concerning bartering where the price of tendered goods was set off against the other goods bartered for and the difference paid. This is a sale of goods not simply a barter.
Helby v Matthews (1895)
A hirer of an piano who had an option to purchase the piano pledged it to a pawn broker. The pledge would have been legal if the contract to hire had been a conditional contract of sale because of the Factors Act 1889, s.9 as he would have been classed a buyer continuing in possession (notwithstanding the sellers interest in the goods) meaning a sale to a good faith buyer would have given good title but it was held to be a hire purchase agreement so the hirer could not be described as a buyer for the purposes of that section.
The Aliakmon (1986)
The parties concluded an agreement to sell steel coil on C & F terms meaning the goods were at the buyers risk but in the absence of a sale the goods were not the buyer’s property. The goods were damaged in shipping due to the negligence of the shippers but as the buyer’s had no property rights in the goods they were not owed a duty of care with respect to property damage but only to pure economic loss and no duty of care was found in that respect.
Head v Tattersall (1871)
H bought a horse from T on the basis of a description given in the catalogue that the horse had hunted with the Bicester hounds. The contract of sale included an express right of rescission within 1 week should the horse not match the description. H later found the horse had never hunted with the Bicester hounds but before he could return it the horse accidentally injured itself. H returned the horse within the deadline but T claimed he could not return the horse in a damaged state. The court held that the risk of damage fell on him who is eventually entitled to the goods, in other words with the person who has the property in the goods. The right of rescission, having been exercised, had revested the property in the original owner and thus he was the person who should bare the risk. This is now s.20(1).
Hamilton v Barden (1949)
Apple juice due to be collected by the buyers was not collected in time and went putrid. The risk was held to be on the buyer because the delay in taking delivery was their fault. This is now s.20(2).
Wiehe v Dennis Bros (1913)
A pony due to be delivered to the daughter of the Queen of the Netherlands was injured when mishandled while in the seller’s care. It was held that the seller was liable for the damage as he was unable to show he had taken reasonable care over it as he was supposed to as a bailee. s.20(3) does nothing to remove this duty and risk may still be placed on an unreasonable bailee.
Sterns v Vickers (1923)
Vickers sold 3/5ths of a supply of white spirit to Stern who sold it on to Lazarus each declaring to the storage company that it should hold the goods on behalf of their buyer and thus the 3/5ths remained where it was and unascertained. Lazarus made his own arrangements with the storage company accepting their warrant acknowledging their holding of the spirit for him. He found later that the spirit was contaminated but risk had passed when each person accepted the storage company’s warrant. The seller had told the warehouse they could make delivery at the order of the buyer. The warrant of the warehouse gave the buyer the means of control of the goods meaning the court interpreted risk as having passed. s.20A changes the result of this, as property would have passed, but the idea that risk can pass in unascertained goods remains unchanged.
Couturier v Hastie (1856)
Corn was shipped by C to London. H, acting as agent for C with responsibility for C’s liabilities, sold the corn to a buyer. However the goods had already been sold by the ship captain en route because they were overheating and the buyer would not pay so C sued H. Counsel for C argued that the buyer was purchasing, through the contract, the benefit of the voyage not the goods themselves; he was paying to put himself in the position of the original vendor. The court held instead that as a matter of construction the buyer had purchased the goods and as they had not been delivered the seller could not sue for the price and the contract was void.
McRae v Commonwealth Disposals Commission (1950)
A man bought the rights to a wreck at the bottom of the sea which was advertised to contain oil. There turned out to be no such wreck and the court held that the Commission had contracted that the wreck was there and it was not merely a common mistake so compensation was deserved. The obvious distinction between Hastie and CDC is that Hastie concerns good that perished and CDC concerns completely non-existent goods. However the case revolves around the implied warrant by CDC that the wreck existed which they breached. Whether such a warrant exists in a mistake case such as this will depend entirely on the facts. The judge in CDC also claimed Hastie didn’t say the contract there was void but it seems likely it in fact did.
Ballard v Philips (1929)
Contract for sale of 1 parcel (700 bags) of nuts. 109 bags of the 700 were stolen and so the delivery of the contract goods (1 parcel) was no longer possible. If the goods describe a specific lot or group of items for sale and the sale is for a complete group then the moment this integrity of this group is compromised the contract is undeliverable and the contract is frustrated and the contract was void due to s.6.
Bobbin v Allen & Sons (1918)
Allen contracted to sell a quantity of Finnish timber to Bobbin. After the First World War broke out shipments were impossible but the court held that because the goods were unascertained and thus because the buyer did not know the seller would need to ship the wood to the UK it was not in the contemplation of both parties that if shipping became impossible the contract would be avoided and so the sellers were not freed from their contractual obligations under s.7. If it had been specific timber in Finland then s.7 would most likely apply.
Intertradex SA v Lesieur-Torteaux SARL (1977)
The sellers contracted to sell machinery to the buyers having contracted from a factory in Mali. However after a breakdown in the factory the Mali company failed to deliver the goods. The seller claimed the contract was frustrated but the court held that it was not. The commonplace situation of factory breakdown is not such a wild and unexpected incident as would allow the seller to escape their obligation.
CTI Group v Transclear (2008)
Seller found it difficult to get the cement he needed to sell to the buyer and claimed the contract was frustrated. The court held that because the goods are generic but your specific source is unavailable other goods can and should be substituted for them. The goods are generic unascertained goods and thus where you get those goods from is irrelevant as is the difficulty of each possible source and indeed the number of possible sources. You did not contract to obtain goods provided your source came through for you, you contracted to supply goods, full stop. You will rarely find frustration of contracts for generic unascertained goods.
Howell v Coupland (1876)
Seller contacted to sell 200 tons of the potatoes grown on his specific land to the buyer. His crop was struck by a disease and only 80 tons was produced. The buyer took the 80 tons at contract rate but sued for damages for the non-delivery of the rest. The court held that the seller should be excused because there was an implied condition that the goods be in existence by the time of delivery but here they were not.
Sainsbury v Street (1972)
The seller failed to harvest enough barley to meet his obligations to the seller. He did not deliver the entire contract amount but also did not deliver the smaller amount that he actually harvested. The buyers were suing for damages for the non-delivery of the amount actually harvested. The judge held that damages were payable for the undelivered crops actually harvested. He claimed Howell v Coupland was preserved by s.5(2) and if not by s.61(2), not by ss.6 or 7.
Re London Wine (1986)
A wine trader had sold wine to various buyers charging them for storage of their wine until they sold it or took delivery. The trader went insolvent and a bank which had a floating charge over the company including the wine against purchasers who had already paid. There were three types of claimant:
Where the purchaser had purchased an amount of wine which exhausted the stocks of the warehouse
Where more than one purchaser had purchased amounts which, cumulatively, exhausted the warehouse supply
Where the purchaser’s order did not exhaust the supply.
In the first two cases Oliver LJ found no appropriation had occurred because while differences between the wine cases were not of importance the fact that stocks were exhausted was immaterial. The trader was free to satisfy the orders from another source because the orders made no reference to the warehouse. The wine in the warehouse, despite the fact that it matched exactly the orders could not be said to be appropriated to the contracts. The third case was even weaker with respect to passing of property under sale of goods law however these claimants had been given receipts and warrants that the wine was held for them. Such a promise was held to give rise to an interest by estoppel and the claimants could sue for damages in an action in trover. This case is also authority for the fact that you can’t have a trust of unidentified property.
The pledging of goods that form part of an identified bulk (yet are held by the pledgor or the pledgor’s agent as bailee) will pass no title.
Re Goldcorp Exchange (1995)
Gold was not appropriated to contracts purchasing golds so no property passed.
Re Stapylton Fletcher (1994)
Moving stock corresponding to each order into new storage apart from general stock was sufficient to appropriate the stock. It was probably the alteration of the storage records which counted as an unconditional appropriation in this case because otherwise simply earmarking goods is not sufficient for unconditional appropriation.
Wait v Midland Bank (1926)
A consignment of wheat was kept in a warehouse. The buyers of a portion of the wheat took a small part of the amount owed to them and pledged the rest to Midland Bank. Eventually Wait tried to exercise his rights as an unpaid vendor but before he could only the wheat belonging to the bank was left in the warehouse. The court held that this was ascertainment by exhaustion and property therefore had passed to the bank before Wait sought to exercise this rights.
The Elafi (1982)
A buyer had 2 contracts to buy 2 lots of coconut among a larger bulk travelling to Sweden on The Elafi. By the time it reached the port the ship had delivered the rest of the coconut so that only the amount capable of satisfying the 2 contracts was left from the bulk. The court held, confirming Midland, that the contract goods had been ascertained by exhaustion.
Re Blyth Shipbuilding (1926)
The parties to a contract to build a ship had agreed that the entire property in the uncompleted ship should pass to the buyer on the payment of the first instalment. The court gave effect to that intention even though one would expect property to pass only once the building is completed. The courts did not allow another part of the contract to give the buyers property over all the materials appropriated for the building which would have given the buyers property in material that did not become the ship and for which they had not paid.
Re Anchor Line (1937)
The parties contracted for the sale of a crane. The contract specifically placed risk on the buyer but said nothing about property. The court inferred from this that if they had intended property to pass it would have been in the contract so property must still be with the seller.
Dennant v Skinner (1948)
An auctioneer sold a car to a bidder who made representations that he was reputable and trustworthy. So the auctioneer allowed him to pay by cheque which was dishonoured. The buyer had made a contract subsequent to the contract to sale saying that property would not pass until the cheque cleared. The judge held that the property had passed to the buyer at the fall off the hammer and that any subsequent contract purporting to retain property with the seller could not have been effective because the car was already sold in an unconditional contract.
Underwood v Burgh Castle (1922)
An engine was to be detached from the premises of the seller in order to move it. The judge held that simply the fact that something needs to be dismantled before transit is not enough to count as something that needs to be done to put the object in a deliverable state. Deliverable does not mean convenient for transport.
Philip Head v Showfronts (1970)
Showfronts contracted with Head to lay and fit carpets in a refurbished office block. They left the carpet on the premises laid but not fitted permanently. They were consequently stolen. The judge held that property would not pass in the items until the carpet had been fitted properly. Until it had been so fitted there remained things to be done before the carpet was in a deliverable state and so property did not pass and the seller’s had to bare the loss of the carpet.
Kulkarni v Manor Credit (2010)
Purchase of a new car from a seller. The car was not in a deliverable state while the licence plates had not been put on because it was illegal to drive and so it was not usable. The buyer did not have to take delivery of it.
Turley v Bates (1863)
Bates contracted for clay which he was bound to weigh at his own expense then pay for. When he did not pay fully he was sued by the seller for the price. If what remains to be done (in terms of weighing or measuring) is to be done by the buyer not the seller then property will pass. Only if it’s the sellers responsibility will property not pass.
Nanka-Bruce v Commonwealth Trust (1926)
A buyer bought cocoa from the seller at a set price per unit weight and resold it on to a good faith sub-buyer. The sellers argued that the cocoa needed to be weighed before sale could go through. The court disagreed saying that weighing to test that the correct amount had been delivered was not a condition precedent to sale; only weighing to determine the price is a condition precedent.
Castle v Playford (1872)
A buyer bought a consignment of ice to be sold at £1 a ton to be weighed ‘during delivery’ by the seller. The ship was lost at sea. In the contract the buyer had taken on the risk of the transit. The court ruled that property probably passed but either way the risk was on the buyer so he should pay an estimated price. A lack of a definite price does not mean the buyer does not need to pay if the risk is on him.
Kirkham v Attenborough (1897)
The seller delivered jewellery to the buyer on sale or return. The buyer pledged the goods to a third party and the court held this was an act inconsistent with the buyer being anyone other than the owner and so was an act adopting the transaction and he was liable for the price.
Weiner v Gill (1906)
Seller delivered jewellery to buyer on the condition that property would not pass until the seller had been paid. Buyer then delivered them to a potential sub-buyer which would have been interpreted as an act accepting the transaction. There is no mention of the seller being paid in rule 4, only of acts adopting the transaction and non-return. Thus this condition of payment is displaying an alternate intention as allowed by the top of s.18 and so it outside the statute and Kirkham is distinguished. Property is not presumed to pass under rule 4 because of the onwards delivery (as it would normally) and so property remained with the seller.
Poole v Smith’s Car Sales (1962)
The seller delivered a car to the buyer saying that he could sell the car on his behalf for £325 and anything above that he could keep. Should he be unable to sell it he should return it. He asked by phone 2 months later for the car back and sent a letter saying that if the car wasn’t returned by 10th November he would consider it sold. It was not returned until the end of November. The court held that this was a reasonable time to let the buyer keep the car and with it’s expiry property had passed and the seller could sue for the price.
Atari Corp v Electronics Boutique Stores (1998)
Neither the fact that the identity or quantity of goods was not specified nor the fact that collection was not possible affected the validity of the notice of rejection. Rejection simply needs to be in a reasonable time having not acted inconsistently with the seller’s rights.
Elphick v Barnes (1880)
Horse given to potential buyer on a trial period for sale or return but the horse died during the trial. No acceptance and the although the goods are unreturnable the risk is on the seller.
Wait v Baker (1848)
The process of appropriation is where a specific article is selected and everything is done to it in order for it to pass.
Pignataro v Gilroy (1919)
Sellers sold 140 bags of rice to the buyers and later told them 125 bags were at one address and 15 at another. This amounted to an appropriation of the goods but the buyers failed to picked up the 15 and did not consent to the appropriation. The judge held that the silence after being reminded of the whereabouts of the 15 sacks was equivalent to them having consented and promised to take them away. The buyers were liable for their loss to theft therefore.
Carlos Federspiel v Twigg (1957)
A buyer bought some bicycles to be manufactured by the seller. These were thus future unascertained goods. They packaged them up and set them aside with the intention of using them to fulfil the contract. They went into receivership before they could ship them. The buyers argued the bicycles were theirs but the judge held that appropriation would only take place once everything was done that needed to be fulfilled under the contract. He held that shipping the goods and delivering them to the carrier was a decisive act under the contract that needed to be done by the seller. Only on shipping would appropriation to take place.
Wardar’s Import v Norwood (1968)
Kidneys were the buyers risk because they had been segregated and left outside even after the agent (the driver) had been informed. This was an appropriation and property had passed.
Kwei Tek Chao v British Traders (1954)
Buyers of chemicals in HK accepted shipping documents and paid the sellers which transferred property under the contract. When they received the goods they discovered that the goods had been shipped out of the shipping dates and the document’s forged to conceal this. The rejected the goods and this was upheld by the court which concluded that the property passed to the buyers defeasibly and re-vested I the sellers at rejection. It also followed that by pledging the shipping documents to their bank they had not acted inconsistently with the seller’s rights and were able to reject.
McDougall v Aeromarine of Emsworth (1958)
The buyers contracted for the sellers to build a yacht for the ‘57 yachting season. The contract contained a term like that in Re Blyth where the whole property transferred at the first instalment of pay. The yacht was unstable when received and the terms on which the company was going to repair it were unsatisfactory so he buyers rejected the yacht. The judge, Diplock J, held that this was justified as the property, tough having passed, passed defeasibly and after rejection had re-vested in the seller.
Cundy v Lindsay (1878)
A rogue bought linen on credit by impersonating a reputable firm and sold them on. The first contract was void for mistake of identity and thus title never passed to the rogue and he was unable to grant good title to the buyer.
Jerome v Bentley (1952)
Owner of a ring gave it to his friend to see if he could sell it for more than a certain price the surplus beyond which he could keep. The court held this was not akin to authority to sell.
Commonwealth Trust v Akotey (1926)
Same facts as Nanka-Bruce. Cocoa was sent to a merchant who had not paid for it and who sold it on to the Trust. The original owner sued the Trust in conversion for the cocoa but lost. The court cited the dictum of Ashhurst J in Lickbarrow v Mason if one of two people must suffer by the acts of a third, he who enabled the third person to occasion such loss must bare it. This is rarely followed and normally only quoted to discredit it. Akotey, the original owner, was held to have allowed the merchant to cause the potential loss to the Trust by giving him the documents of title and so he should bare it.
Eastern Distributors v Goldring (1957)
A motor dealer persuaded a customer to sell his van to him which would give him enough money to put down a deposit and a new car then buy back his van and the other car both on hire purchase agreements over time. The customer left 2 blank hire-purchase forms with the dealer who sold the new car to him but sold the van to another person when payments were not made. The 2 blank forms were held to give the dealer authority to sell the van and he was estopped from denying it.
Henderson v Williams (1895)
The owner of some sacks of sugar was persuaded by a rogue to direct the warehouse where they were kept to hold the sugar to the rogue’s order. The rogue sold the sugar to a buyer but never paid the original owner. The court held that the act of directing the warehouse to hold for the rogue estopped him from claiming the rogue had authority to sell.
Farquharson Bros v King (1902)
The owners of some timber employed a clerk to direct deliveries to customers. The clerk fraudulently induced deliveries to buyers and when he was discovered the owners sued him in conversion and were successful. The court held they had done nothing to preclude their denial of his authority.
Central Newbury Car Auction v Unity Finance (1957)
CN owner a car and were tricked into letting R have the car and the registration book who then used this to sell the car to a third party. It was alleged that CN were negligent but the CofA rejected this argument and CN retained possession. There was no representation, specifically of agency, that would preclude CN from denying the rogue’s right to sell.
Mercantile Bank of India v Central Bank of India (1938)
Handing over a document of title is not enough to constitute a representation or agency or ownership. This case disapproved Akotey where handing over documents were enough to be a representation to authority to sell
Mercantile Credit v Hamlin (1965)
Woman wanted to raise money for a new car on the security of her Jaguar. A car dealer said he would sell the car to a finance company and buy it back on hire purchase and use the money from the sale to put down on a new car. She gave him blank, signed forms on the promise that he would get back to her but he didn’t and sold it anyway. The court held that the owner was not precluded by her negligence from denying the dealer’s right to sell the car.
Pearson v Rose & Young (1951)
Per Denning LJ: Generally the entrusting of goods to an agent with consent of the owner in his capacity as a mercantile agent is deemed to mean with the intention of having the agent deal with them in some way (probably for sale). If consent has been given with respect to the goods without the documents of title and both are sold then the entire transaction is treated as occurring without consent.
Weiner v Harris (1910)
The owner of some jewellery sent W, the seller, all over the country selling his goods as a course of business. The seller pledged, without authority from the owner, pledged certain goods with a pawn broker. As Weiner was a textbook mercantile agent under the FA the pledge was held to be valid and the broker was entitled to assume the agent had the authority of the owner. Note – this reverses the decision of Jerome v Bentley where a mercantile agent is involved.
Lowther v Harris (1927)
You do not have to be directly employed as an agent as long as your general profession is as a businessman who sells things.
Staffs Motor Guarantee v British Wagon (1934)
An agent who sold lorries for a living sold his own lorry to BW, bought it back on hire-purchase then sold it on to a good faith buyer. The court held the transaction was not valid because he had the lorry qua hirer and not qua mercantile agent.
Astley v Miller (1968)
A car dealer obtained cars on hire-purchase and hired them out to customers. It sold one car to a good faith buyer and Astley claimed it back. Confirming Staffs, the court held that the car was sold by the dealer qua hirer not qua agent so s.2 FA does not apply.
Folkes v King (1923)
An agent obtained consent to sell a car for a certain price but dishonestly sold it for less and pocketed the money. It was held that consent in the case of s.2 FA includes consent obtained by fraud.
Heap v MAA (1923)
Agent sold an owner’s car without authority for a low price. s.2 provided no help for the buyers because they could not prove they acted in good faith. The onus of proof of good faith is on the buyer.
Summers v Havard (2011)
Turning a blind eye counts as notice for the purposes of s.2 of the Factors Act
Lewis v Averay (1972)
Owner accepted a cheque for a car on the basis of the a rogue’s purported reputation. The rogue then sold it to a student in London. The court ruled there was no mistake of identity because the seller was assumed to be dealing with the person in front of them but it was voidable for fraud. As the title had not been avoided before the sale to Averay, he got good title.
Pacific Motor Auctions v Motor Credits (1965)
Car dealer would buy cars then sell them to a finance company for about 90% of their value to keep their cashflow. They would retain the cars as bailee for the finance company. When the dealer got into financial difficulties a creditor bought cars off the dealer which had already been resold to the finance company. It was held that it did not matter that the dealer was only a bailee, the good faith creditor was protected and could keep the cars. Physical possession is all that matters.
Michael Gerson v Wilkinson (2001)
a company, E, sold and signed a lease agreement for a set of machinery which they then sold to and leased back from another company. It was held that despite E’s position as a hirer the second sale was valid directly over turning Staffs. Delivery may be actual or constructive meaning that if the seller constructively delivers to the buyer then actually delivers to the sub-buyer the situation will still be one where the buyer is in possession delivering to the sub-buyer (relevant for the 7th exception).
Lee v Butler (1893)
A woman took furniture on a hire purchase agreement which in this case was treated as a conditional sale agreement because the hirer had no option to end the hire. Under a normal hire-purchase you do and you have only an option to buy making it not a sale agreement. The woman sold it to a good faith buyer before payment fo the full price and the owner claimed them back. The court held that the sale was valid under s.9 FA.
Newtons of Wembley v Williams (1965)
An owner of a car gave it to a rogue who gave them a worthless cheque. The rogue sold it for cash at a street market. The owner was said to have avoided the title which was voidable for fraud and thus the rogue had no title. Unless the rogue could be said to be a mercantile agent then the sale would not be valid. Lee v Butler had not taken this wording into consideration and in fact the court here held that it required the buyer in possession to be acting in the course of business. It was said on the facts, as the car was sold at a market which was commonly used to sell used cars, the buyer was acting in the course of business. The sale was therefore valid.
National Employers’ Mutual General Insurance Association v Jones (1990)
A woman’s car was stolen and was eventually bought by Jones. The insurers claimed the car but Jones claimed s.25(1) protected him. The court held that it did not because the car had been stolen in the first place. Unless the true owner had given consent no person down the chain of possession can take advantage of s.25(1).
Mount v Jay (1960)
Jay sold canned peaches to Merrick. The buyers made it clear that they would pay Jay from the money they received after re-selling the peaches to Mount. Merrick never paid Jay but the court held that Jay had lost their right of lien because they had consented to the resale to Mount. They had been keen to sell the peaches in a falling market and it was held they had renounced their lien.
Obiter: It does not matter for the purposes of s.25(1) whether the documents of title the buyer gets with consent from the seller are the same as the ones sold to the sub-buyer. As the goods here were unascertained there was only an agreement to sell. This did not concern the judge but it seems as if s.25(1) should not have applied. However s.9 FA would have applied as it includes the wording ‘or under any agreement for sale’ which would include contracts of sale for unascertained goods. It is not clear however how property would have passed and this point is probably open for reconsideration. Re Highway Foods (1995) held that agreements to sell where a buyer had possession and conformed in every way to s.9 FA property would not pass from the original owner.
The Saetta (1993)
B2 let B1 hire it’s ship but later failed to pay the hire fee and B2 took it back. B1 had, however, ‘bunkered’ (fueled) the ship thus there was a lot of oil in the ship that neither B2 nor B1 had paid for. B2 claimed S had delivered the oil to B1 who had voluntarily given the goods to B2 so they had title however it was not voluntary so this argument did not work.
Shogan Finance v Hudson (2003)
Part III of the Hire-purchase Act 1964 protects private people who buy a car with no notice of a previous hire-purchase agreement on the car. This will not work if the original hire-purchase agreement is void as it was here.
Bowes v Shand (1877)
Contract said that delivery had to take place between certain months; it was not and in this mercantile context time was of the essence of the contract and thus breach of timing was sufficient to allow the buyer to refuse delivery.
Behrend & co v Produce Brokers (1920)
S had loaded his ship with a contracted quantity of seed on the 1st and 3rd floor. He was unable to get to the bottom layer without first delivering the other goods on the 2nd floor. S arrived in London and delivered half the contracted quantity of some seed. He then went to hull to deliver the second floor good and then came back to London. Buyer rejected the second half and was entitled to do so.
Miliangos v George Frank (Textiles) (1976)
Court may order the payment of price in another currency if that currency is what the contract price was in.
Niblett v Confectioners Materials (1921)
A buyer bought condensed milk from a seller. It had the name NISSLY on the side. Nestle claimed this violated their trademark and the buyer had to remove the labels which hurt their value. The buyer sued the seller for breach of contract and the court held that the seller had breach the condition implied by s.12(1). The right to sell includes title but also includes right to sell in light of trademark law. As the seller had no right to sell trademarked material then this was construed as a breach of s.12(1).
Great Elephant v Trafigura Beheer (The Crudesky) (2012)
S sold oil to B in an international trade contract called an FOB contract. S loaded the oil on a ship chartered by the buyers. Property passed to B as it was loaded onto the ship. However an arm of the Nigerian government refused to give the relevant documents to the ship to let it leave claiming breaches of loading procedures until a fine of $12 million had been paid. The court held that simply because the seller had not provided for the departure of the ship that did not mean they had no right to sell. The Nigerian government did not claim ownership nor did they seize the goods.
Microbeads v Vinehurst Road Markings (1975)
3rd party claimed a breach of a patent on the machines used to mark roads but the patent had not been granted until after the contract between S and B had been signed. The court thus held there had been no breach of s.12(1) but because of the intervention of the 3rd party there had been a breach of s.12(2)(b).
Rubicon Computer Systems v United Paints (2000)
S was upset at not getting paid for computer systems and he installed a time lock preventing use of systems until payment was made. This was a breach of s.12(2)(b) and gave rise to damages.
Grant v Australian Knitting Mills (1936)
Buyer bought a pair of underwear which, because of a chemical used in the manufacturing that should have been washed off, irritated his skin. The court ruled that the goods were sold by description even though the buyer picked them out in a retail store and the implied condition was applied. Thus, as it is quite hard to find a contract where the goods are not sold with some sort of description, it is hard to find a situation where s.13 will not be implied.
Harlington v Christopher Hull Fine Art (1991)
Sale of a painting described as by a specific painter. The buyer was a specialist in this area but the seller was not. The painting turned out to be a forgery worth about 1/500th of the price. The buyer had relied upon their own judgement not upon the description so this did not come under the section. In fact the seller disclaimed any knowledge of the painting’s provenance.
Re Moore v Landauer (1921)
Parties contracted for boxed of tinned fruit. The fruit was to come with a certain number of cans per box. The goods, when they arrived, where half correct while the other half had the wrong number of tins per box despite having the right number of cans overall. The court held that rejection on the basis of s.13 was valid here.
Arcos v Ronaasen (1933)
Buyers contracted for wood staves to make cement barrels from. They were to be ½ and inch thick but when they arrived they were bigger by only by 1/16th of an inch. They were fit for the purpose and complied with every other rule. The court still held that the goods could be rejected under s.13.
Ashington Piggeries v Christopher Hill (1972
Diplock LJ said ‘The description by which goods are sold is confined to those words in the contract which were intended by the parties to identify the kind of goods which would ultimately be supplied…the key to s.13 is identification’
Readon Smith Lines v Yngvar Hansen-Tangen (1976)
Ship was sold to the buyers as a new vessel being built in a certain lot in Osaka. Actually it was being built in Oshima and the buyers wanted to reject the goods. The court held there was no breach of s.13 because the description of being built in Osaka was not fundamental to the identity of the ship.
Pinnock Bros v Lewis & Peat (1923)
Adulteration of something which has the effect of changing it’s identity may cause something not to comply with the description. Here livestock feed had been adulterated with poisonous beans thus it could not be described as animal feed so s.13 had been breached.
Stevenson v Rogers (1999)
In the course of a business has a wide interpretation. Stevenson was a fisherman and he decided to sell his boat to buy a new one. He did not sell boats as a matter of course. The court of appeal however held that the sale was made in the course of business.
Geddling v Marsh (1920)
Goods supplied under the contract includes the container and other material that comes with the goods. Here a water bottle not sold with the water burst and was considered part of the goods.
Bramhill & Edwards (2004)
If the buyer inspected the goods then any fault in the goods should have been noticed in that particular inspection cannot be complained about later. Here a US motor home was too wide for UK roads but the buyer spent 2 days inspecting it and sleeping in it so should have noticed.
Bartlett v Sydney Marcus (1965)
Buyer told the car had a faulty clutch before purchase. He was not able to claim under s.14(2) for that same fault.
Jewson v Boyhan (2004)
Buyer was installing boilers into some flats. Jewsons inspected the flats and recommended one type of boiler. They worked well but the buyer refused to pay and sued Jewsons saying the fact that the boilers did not have a good energy rating was a breach of s.14(2) because there were needed to sell his flats. The court held there was no breach. The reasonable person would consider the boilers satisfactory. The reasonable person is endowed with knowledge of the case but not with the buyer’s agenda. This applies to s.14(3) too.
Clegg v Olle Anderson (2003)
A boat was delivery new to the buyers but it had a heavy keel and tended to capsize. The court held this was not of satisfactory quality and further that if things are described as top of the market or are marketed as high quality the standards of quality may be higher. A brand new boat should be free from minor defects. They also asked the seller how heavy the keel would need to be for it to be unsteady. The sellers took a while to get back to them but their eventual answer implied that the yacht supplied under the contract might capsize and they immediately rejected. Held that time spend waiting for answers to questions or waiting for repairs is not counted in the reasonable time before acceptance is no longer allowed.
Britvic Soft Drinks v Messer UK (2002)
CO2 supplied to Britvic to make fizzy water contained trace parts of benzene, a carcinogen. Although the levels were so low as to be insignificant to human health Britvic still recalled the product to protect it’s reputation. The court held that this reaction could be taken into account when deciding whether the goods were of unsatisfactory quality which they were in this case.
Balmoral Group v Borealis UK (2006)
Fit for purpose does not mean fit for every conceivable purpose. With very versatile materials, like polyethylene in this case, this would be unreasonable.
Mash & Murrell v Joseph Emanuel (1961)
Potatoes were found to be rotten at Liverpool after transportation from Cyprus. Goods should be durable enough to withstand further transportation. If they do not this raises the presumption that the goods were not of satisfactory quality at the beginning point of transportation.
Bominflot v Petroplus (2010)
Gas oil being transported internationally met the contract specifications at departure but by its destination had developed a sediment which made it unusable. The court held that just because the defect was latent and not discoverable at departure does not mean they were not defective. If goods fail to make it to their destination they can be assumed to have been defective at departure.
Bristol Tramways Co v Fiat Motor (1910)
The buyer told the seller he was buying buses for Bristol so it can be assumed that the buses should be fit to go up the hills in Bristol.
Kendall v Lillico (1969)
A animal feed producer accidentally contaminated some product with chemicals toxic to poultry. It made it’s way to the claimant’s farm where it killed some birds there. The court held that feeding to poultry was not too wide to be a particular purpose for s.14(3) and that good should be fit for those purposes that are reasonably foreseeable. Here, it was reasonably foreseeable that the feed would be used for poultry and as it was not fit for that purpose it breached the s.14(3) condition.
Teheran Europe v Belton Tractors (1968)
Tractors would be used in Iran about which the seller knew nothing. The buyers did know about the terrain and could be shown not to have relied upon the seller. An agent for a foreign principal is no longer held to be implicitly contracting personally. The principal is the one liable.
BSS Group v Makers UK (2011)
Sellers of faulty plumbing equipment that caused a flood were held to be experts in plumbing equipment and as such were experts who were being relied upon.
Steel & Busks v Bleeker Bik (1956)
A delivery of rubber contained, unlike previous deliveries which were used as reference for quality of new supplies, a preservative which made it difficult to use. In the buyer’s line of work inspections were done visually and so the court concluded that an ordinary commercial person doing a visual inspection (as was normal in the buyer’s line of work) would see nothing different about the new delivery and thus the condition implied by s.15(2) was not breached.
Drummond v Van Ingen (1887)
The word unsatisfactory means in s.15(2) is what an ordinary commercial person in the buyer’s line of business would consider unsatisfactory.
