Commercial Law

Question 1

Sale of goods - rights for breach of condition

Answer 1

1. Reject goods, terminate contract, sue for damages; or
2. Reject goods, affirm contract, demand conforming goods, sue for damages; or
3. Accept goods, sue for damages (breach of warranty).

Question 2

Sale of goods - has the right to reject been lost?

Answer 2

• D’s breach of condition is so slight that it would be unreasonable to terminate the contract - damages only
• Buyer expressly, or by implication waived the breach
• Buyer accepted goods.

Question 3

Implied terms

Answer 3

• Time is not of the essence unless otherwise stipulated

s. 12 - Title
s. 13 - Sale by description
s. 14 - Satisfactory quality or fitness
s. 15 - Sale by sample

Question 4

SGA/UCTA claim structure

Answer 4

1. Identify claim
2. Identify terms breached (express or implied)
3. Is term breached a condition?
4. Identify remedies available
5. Has the right to reject been lost
   a. Breach so slight
   b. expressly/by implication waived
   c. Buyer has accepted the goods
6. Is there an exclusion / limitation of liability (UCTA alarm bells)
   a. Exclusion / limitation PLUS:
   b. Party trying to exclude liability for negligence
   c. Exclusion / limitation of ss.13-15
   d. One party contracting on another’s standard terms
7. If so, apply UCTA reasonableness test.
8. What remedies remain?

Question 5

International Sales - Jurisdiction & Governing Law

Answer 5

Jurisdiction - Brussels Regulation:

1. Does the regulation apply? (Civil & commercial matters, EU member state, After 10 Jan 2015)
2. Do courts of E&W have jurisdiction?
   a. General rule - D’s domiciled state (4) (court applies international law to decide where this is (62)
   b. May be sued in another member state (7)
   c. Special jurisdiction (24-26 (In Rem, Choice, Accept))
3. Will they accept jurisdiction? (has another country accepted)

Governing Law - Rome I

1. Scope (1) All cases involving conflict of laws, civil & commercial
2. General rule (3) - contract governed by chosen law
3. Where no express or implied choice - Art.4 (seller)

Mandatory rules (3&4) - where all aspects of a contract other than choice point to given jurisdiction, courts may imply certain rules of national law if they are of a kind that cannot be derogated by agreement.

Overriding provisions (9) - Countries may continue to apply law to protect its public interest.

Question 6

International Chamber of Commerce (ICC) - Incoterms 2010

Answer 6

• ‘F’ terms - provide that B is responsible for paying for cost of main carriage after loading
• ‘C’ terms - contracts for main carriage and insurance to the port are taken out and paid for by S
• ‘D’ terms - seller assumes risk and cost of transport all the way to agreed place of destination.

Question 7

CIF terms - Seller’s obligations

Answer 7

• Procure contract of carriage / shipping to B at port of destination.
• Load conforming goods on board the vessel
• Procure marine insurance in the name of the buyer
• Tender documents to the buyer:a. Bill of lading (functions as receipt (proof of loading), transport contract effected by S but transferable to B, document of title).
  b. Marine insurance policy
  c. Commercial invoice

Question 8

CIF terms - Buyer’s obligations

Answer 8

• Accept (take up) conforming documents
• Pay for goods as provided for in the contract
• Take responsibility for the goods from the point of loading - arrange for import at port of destination and onward delivery.

Question 9

CIF terms - remedies for damage in transit.

Answer 9

S has no liability for damage in transit if:

• No indication that goods don’t conform to contract on loading or that seller did not present conforming documents.
• Thus, S has discharged duties under CIF and risk passes to B on loading.
• B’s remedies are to claim under marine insurance or against carrier (if damage was caused by breach of contract of carriage).

Question 10

E-commerce regulations - Online sales

Answer 10

• Company website = ‘Information Society Service’
• Company is therefore a service provider
• T&Cs will specify the point of sale:
  a. Must be brought to attention of B
  b. B must be able to read them
  c. Best is tick box / scroll down mech.

Question 11

E-commerce regulations - Liability of service providers

Answer 11

• e-commerce regs. give service providers immunity re. user-generated content provided:

a. report abuse mechanisms
b. T&Cs must provide that:
- users do not post unlawful content
- SP may remove content at its discretion

Question 12

Distribution Agreements - Structure

Answer 12

1. Does the Chapter I prohibition apply (s.2 CA)?
   a. Agreement / Decision / Concerted practice
   b. Prevention / Restriction / distortion of competition
   c. Effect on UK trade / implemented in UK s.2(3)
2. Can you rely on block exemption (s.10 CA parallel exemption - apply VABE)?
3. Is the effect on competition appreciable (NAOMI)?
   a. Intentionally anti-competitive
   b. hardcore restrictions
   c. market shares (up to 15%)
4. s.9 Exemptions - Self-assess (four criteria)?
   a. Positive benefit
   b. Fair share consumers
   c. Necessity
   d. Not allow elimination of competition.
5. Infringement consequences?
   
   • advise client of penalties and risks. Better to:
     a. Stop prohibited activity; and
     b. Whistle blow (mitigating factors, settlement discount)

Question 13

Distribution Agreements - does VABE apply?

Answer 13

1. Vertical agreement
2. Satisfy market share thresholds (3(1)) (not exceed 30% of relevant market for supplier and purchaser)
3. Agreement must not contain restrictions as defined in VABE (4&5):
   a. Price fixing (4a)
   b. Territorial restrictions (active v passive sales). (4b)
   c. Non-compete (5) (theoretically severable)