RISK Flashcards
Under s20(1) where is the passing of risk?
Is related to the passing of property WITH EXCEPTIONS
Why is the presumption of passing of risk with passing of property problematic?
Because property can pass without possession
BUT the seller, even after property has been passed, still has duty of care as per a bailment
What does s20(2) provide for?
That if delivery is delayed by either party, and loss occurs due to that delay, the party at fault is liable
Case for s20(2)
Demby Hamilton and Co v Barden
CASE FACTS
Demby Hamilton and Co v Barden
Buyer bought 30 tons of apple juice, and took delivery of 20.5 tons. He failed to give instructions for the delivery of the rest, which went putrid. The court held that the buyer was at fault and therefore had to bear the loss
What does s20(3) state?
The general rule that risk follows property will not apply where one party is the bailee of the goods and the loss occurs through their lack of reasonable care, in which case the bailee will be liable
Case for s20(3)
Weihe v Dennis Bros
CASE FACTS
Weihe v Dennis Bros
Buyers contracted to buy a Shetland pony, delivery in a month. While the pony was in the sellers’ possession it was taken to an event, mishandled and injured.
Sellers were liable for failing to take reasonable care as bailees of the goods
Under s16, property cannot pass, can risk?
Yes
If goods sold by description have been appropriated to the contract or the source identified, but not paid for, then the risk can be passed under a contract even though property has not passed
Example of when risk passes but property hasn’t
A sale of unascertained goods from an identified bulk
Case for risk passing when property hasn’t
Sterns v Vickers Ltd
CASE FACTS
Sterns v Vickers Ltd
Seller sold 120,000 of 200,000 gallons of spirit to the buyer - was in a storage tank under the control of a third party, a bailee.
B was given a delivery order which was to be handed to the third party. However, B decided to leave the goods in the tank for some time for their own convenience, by which time the spirit had deteriorated.
No property in the goods could pass to the buyer until the spirit had been drawn off from the bulk. (s.16 - no property may pass unless and until the goods are ascertained) and therefore risk must be with the seller?CoA found that the risk passed to the buyer when the buyer handed the delivery order to bailee.
The bailee acknowledged that he now held on behalf of B. The bailee held the spirit on behalf of B after receiving the delivery order in proportion to their interest 80,000/120,000. Risk therefore passed before the property in this case on the basis of implied intention.
Case for risk being dependent on nature of the contract
Head v Tattersal
CASE FACTS
Head v Tattersal
B took horse on the understanding that he had the right to return it and end the contract if the horse was not as described.
Horse not as described so B was entitled to his money back - horse was injured in his care through no fault of his own.
Held, as the effect of the contract was to vest the property in the buyer subject to a right of rescission if property was not as description, then it would revest in the seller.
Accident nobody’s fault, horse was at the seller’s risk during the period allowed for its return.
