Topic 2 – An introduction to the law relating to the sale of goods

Question 1

What is the primary purpose of commercial law?

Answer 1

Facilitating trade and business transactions.

Question 2

What is an agreement to sell?

Answer 2

A contract of sale where property is to be transferred either in the future or on the fulfillment of a condition, s.2(5).

Question 3

What are the key drivers of commercial law?

Answer 3

Business needs, economic policies, technological advancements, and international trade agreements.

Question 4

Name three sources of commercial law.

Answer 4

Statute law, case law, and commercial customs/practices.

Question 5

Why does commercial law favor a laissez-faire approach?

Answer 5

To allow flexibility and freedom of contract in business dealings.

Question 6

What is the main reason for regulating consumer transactions?

Answer 6

To protect consumers from unfair business practices.

Question 7

What are the main objectives of the Consumer Rights Act 2015?

Answer 7

Streamline consumer rights, clarify consumer law, modernize regulations, deregulate businesses, and enhance consumer protection.

Question 8

What is the fundamental difference between B2B and B2C transactions?

Answer 8

B2B transactions assume equal bargaining power, while B2C transactions provide additional protections for consumers.

Question 9

Can businesses contract out of the CRA 2015?

Answer 9

No, businesses cannot exclude consumer rights under the CRA 2015.

Question 10

Can businesses contract out of the SGA 1979?

Answer 10

Yes, businesses can exclude or limit certain provisions in B2B contracts.

Question 11

What type of contract is covered by both the SGA 1979 and CRA 2015?

Answer 11

Contracts for the sale of goods.

Question 12

What is the key distinction between commercial and consumer transactions?

Answer 12

Commercial transactions emphasize contract freedom, while consumer transactions prioritize consumer protection.

Question 13

What is the definition of a contract of sale under the SGA 1979?

Answer 13

“A contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price”, s.2(1), SGA.

Question 14

How does the CRA 2015 expand the definition of a sale of goods contract?

Answer 14

The CRA 2015 does not expand the definition of a sale of goods contract. But includes such contracts, along with contracts for the hire of goods; hire-purchase agreements; and contracts for the transfer of goods, under contracts for the supply of goods to a consumer by a trader , s.3(2), CRA 2015.

Question 15

What is the role of implied terms in sales contracts?

Answer 15

They ensure goods meet minimum standards of quality, description, and fitness for purpose.

Question 16

Under which law are digital goods explicitly protected?

Answer 16

The Consumer Rights Act 2015.

Question 17

Which act governs remedies for defective consumer goods?

Answer 17

The Consumer Rights Act 2015.

Question 18

What is the most significant remedy introduced by the CRA 2015?

Answer 18

The 30-day right to reject faulty goods.

Question 19

How does the SGA 1979 treat remedies for defective goods?

Answer 19

It allows businesses to negotiate remedies based on contract terms.

Question 20

What is the primary principle governing contract interpretation in the UK?

Answer 20

The intention of the parties as determined by contract language and context.

Question 21

What case established the modern contextual approach to contract interpretation?

Answer 21

Investors Compensation Scheme Ltd v West Bromwich Building Society (1997).

Question 22

What is the traditional approach to contract interpretation?

Answer 22

Literal interpretation, focusing on the plain meaning of words.

Question 23

Why is the contextual approach preferred in modern contract law?

Answer 23

It considers commercial realities and the background knowledge of the parties.

Question 24

What is the role of business common sense in contract interpretation?

Answer 24

Courts favor interpretations that align with commercial logic and fairness, but…

Question 25

Does English law impose a general duty of good faith in contracts?

Answer 25

No, there is no overriding duty of good faith in English contract law.

Question 26

What case highlighted the lack of a general good faith obligation in contract law?

Answer 26

Interfoto Picture Library v Stiletto Visual Programmes (1989).

Question 27

Can good faith be implied in some commercial contracts?

Answer 27

Yes, courts may imply good faith in certain relational contracts (Yam Seng v ITC Ltd (2013)). Why in Yam Seng?

Question 28

What is the difference between good faith in common law and civil law systems?

Answer 28

Civil law systems recognize a general duty of good faith, whereas English law does not.

Question 29

How can good faith obligations affect contractual certainty?

Answer 29

Unclear definitions of good faith may introduce uncertainty in business contracts.

Question 30

What does s.6 of the SGA 1979 state about the sale of non-existent goods?

Answer 30

If specific goods perish before the contract is made, the contract is void.

Question 31

What is the effect of frustration on a sales contract?

Answer 31

It discharges the parties from their contractual obligations due to unforeseen impossibility.

Question 32

What case established the modern doctrine of frustration?

Answer 32

Davis Contractors v Fareham UDC (1956).

Question 33

When does frustration apply under s.7 of the SGA 1979?

Answer 33

When specific goods perish before risk has passed to the buyer.

Question 34

How does common law frustration differ from statutory frustration under the SGA 1979?

Answer 34

Common law applies to all contracts, whereas s.7 only applies to sales of specific goods.

Question 35

Can a contract be frustrated due to increased difficulty or cost?

Answer 35

No, increased cost alone does not amount to frustration (Tsakiroglou v Noblee and Thorl (1962)).

Question 36

What is the impact of COVID-19 on frustration claims?

Answer 36

COVID-19 may constitute frustration if it renders contractual performance radically different.

Question 37

What does the Couturier v Hastie (1856) case suggest about non-existent goods?

Answer 37

If the goods never existed at the time of contract, there is no contract.

Question 38

How does s.2(1) of the SGA 1979 define a sale of goods contract?

Answer 38

A contract of sale of goods is a contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price.

Question 39

Can software be classified as "goods" under the SGA 1979?

Answer 39

It depends; software on physical media has been considered goods (St Albans City v International Computers (1997)).

Question 40

How does the CRA 2015 treat software and digital content?

Answer 40

It explicitly includes digital content as part of consumer sales protection.

Question 41

What is a quasi-specific good?

Answer 41

A good identified from a specific source but not yet ascertained.

Question 42

What case dealt with perishing quasi-specific goods?

Answer 42

HR & S Sainsbury v Street (1972).

Question 43

What section of the CRA 2015 governs unfair contract terms?

Answer 43

Part 2 of the CRA 2015

Question 44

What is a key consumer protection in the CRA 2015 related to unfair terms?

Answer 44

The requirement that terms and notices be transparent and fair.

Question 45

How does the CRA 2015 affect hire-purchase agreements?

Answer 45

It includes hire-purchase agreements under consumer protection laws.

Question 46

What is the impact of standard-form contracts on commercial law?

Answer 46

They help ensure uniformity and efficiency in trade.

Question 47

What case highlights the importance of certainty in contract law?

Answer 47

Arnold v Britton (2013) emphasized the need to avoid rewriting contracts through interpretation.

Question 48

What attribute does a sale contract have that an agreement to sell does not have?

Answer 48

A sale contract is a conveyance (a transfer of property).

Question 49

Distinguish between two types of sales contracts: "bargain and sale" and "sale and delivery".

Answer 49

In a bargain and sale, property passes upon completion of the contract (no requirement for delivery). Sale and delivery requires delivery to the buyer.

Question 50

How are goods defined in the SGA 1979?

Answer 50

“Goods” includes all personal chattels other than things in action and money, s.61(1), SGA 1979.

Question 51

What is the relationship between ss. 17 and 18 of the SGA?

Answer 51

S.17 applies where the timing of property is expressly stated. S.18 applies when the timing must be implied.

Question 52

What distinguishes a contract for the sale of goods from a contract for the supply of services?

Answer 52

Where the substance of the contract is the application of skill and labour rather than the supply of goods, Robinson v Graves [1935] 1 KB 579.

Question 53

In terms of a legal title and absolute interest, what constitutes a sale contract?

Answer 53

A sale contract must pass a legal title to the entirety of an absolute interest.

Question 54

What is the argument against the proposition that 'property' refers to an indefeasible title, i.e the best title.

Answer 54

That the seller has the 'right to sell' in a 'contract of sale', s.12(1) would be redundant, since having the best title gives the right to sell.

Question 55

How is property to be defined?

Answer 55

"Property" in the context of sale of goods refers to the proprietary right that is transferred by the sale, rather than the physical goods themselves. The term encompasses both the interest in the goods and the title to that interest.

Question 56

What is the implication of s.12 SGA?

Answer 56

That title is relative. If a sale could only occur where the best title was transferred, s.12 would not be needed. Having the best title would give the right to sell.