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Commercial law - cases - Case law notes

Commercial Law (University of Bradford)

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Commercial law – Cases A patent was made after forming a

Aldridge v Johnson 1857 contract.
A farmer agrees to exchange some Had the seller a right to sell the
bullocks for some barley. Barley was goods? Section 12(1) had not been
worth less than bullock, he had to breached as the sellers had the right
pay the difference in money. The sell at the time of forming the
Court held that there were two contract. With regard s12(2) the
contracts. buyer was still entitled to continued
Esso Petroleum Ltd v quiet possession, without a prospect
Commissioners of Customs & of an action for breach of patent by
Excise 1976 any third party
Garages supplied a free gift for Harlington & Leinster v
every four gallons of petrol Christopher Hull Fine Art
purchased. The House of Lord held [1991]
that the free gift did not constitute a German painting. Under s13 SGA,
contract of sale of goods. Motorists where the purchase is based solely
consideration for the gift was on the description, the good has to
entering into of the separate (but match the description. By sending
linked) contract for the inspectors before the purchase, it
petrol, not the payment of money was no longer solely based on the
Rowland v Divall [1923] description. Implied term.
A car dealer, a claimant, brought an
action under SGA. A defendant sold Arcos v Rannason 1933
a stolen car. A customer enjoyed 2 A claimant purchased ½ an inch-
months of the use of the car. The car thick staves for making barrels.
had to be returned to the original Some of the staves were not in fact
owner. as described. Entitled to reject the
goods under s13. S 13 governs
Niblett v Confectioners' Material merely description, not quality.
The sellers did not have the right to
Re Moore & Landuaer 1921
sell the goods and therefore the
buyers were entitled to repudiate the Tins of peaches were described to be
contract. (Nestle) packed in cases of 30, they were
-Trademark, copyright or patent packed in cases 24. The purchaser
was entitled to reject the goods.
Microbeads v Vinehurst Road Stevenson v Rogers 1999
Markings [1975] A fisherman, defendant, sold a boat
Quiet possession, warranty that the to a claimant who consequently
buyer can enjoy the use of the claimed that under s14 of the SGA,
purchased good. SGA s12.2b. the boat was no satisfactory quality.
This section applies only to the
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course of the business. The Sainsbury v Street

fisherman claimed it was not in Where part of the goods perished,
course of business, as his business the seller may be required to make
was only catching and selling them, the remaining, the
not selling fishing boats. HELD: The buyer is not required to accept.
sale was in the course of the Unascertained goods
business. Hughes v Pendragon Sabre Ltd
A limited edition Porsche 911 to be
Aswan Engineering v Lupdine 1987 acquired by the seller. Unascertained
Liquid waterproofing described as goods
being heavy duty and suitable for
Ashington Piggeries v Hill
storage outside. However, it was
Animal feedstuff to be made
exposed to extreme conditions and
according to a specification supplied
the court held that a reasonable user
be the buyer. Unascertained goods
could have used the goods for the
purposes for which they are McDougall v Aeromarine of
commonly supplied. Emsworth
A ship to be built by the seller to a
Barlett v Sidney Marcus ltd 1965 specification. Unascertained goods.
A claimant purchased a car and the They agreed that the ownership of
defendant brought to an attention the yacht will transfer on the first
that there is a defect. However, the instalment. HELD: Not transferred
information was misleading. as they haven’t started building the
HELD: The buyer could not assert yacht and decided on the material.
any rights under s14 by virtue of Varley v Whipp
s142C. Sale of a specific second handed car.
Dennant v Skinner
Types of goods Kursell v A buyer won an auction for a van.
Timber Operators Rule 1: The unconditional contract
The sale of still growing timber, the was made and it is immaterial when
buyer was to fell and remove the the payment is made or when is the
trees himself. delivery postponed.
Unascertained goods. Underwood v Burgh Castle brick &
Re Wait Cement Syndicate
A purchase of 500 tons of wheat out A purchase of a machine 30-ton
of 1000 tons cargo. Unascertained condensing machine which at the
goods time of the contract was standing
London Wine Co (shippers) bolted to a concrete emplacement.
The sale of 12 bottles of port which I Rule 1 does not apply: 1) making a
have in stock right now. Specific Free of Rail agreement, indicated
goods. intention of that property will pass
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when the goods is loaded on to the Maple Flock Co Ltd v Universal

rail. 2) The goods were not in a Furniture Products (Wembley) Ltd
deliverable condition at the time. Where there is a sale of goods under
Rule 2 applies.  deliverable state a severable contract and only some
Nanka-bruce v Commonwealth trust instalment of the goods were
ltd defective. Whether the buyer will be
Rule 3  the seller is bound to entitled to repudiate entirety of the
weigh, measure, or do some other contract will depend on (I) the
act or thing with quantitative ratio which the breach
reference to the goods bears to the contract as a whole. (II)
St Albans City and DC v the degree of probability of that such
International Computers Ltd a breach will be repeated.
C suffered dmg from errors of a
software of the D. The court May & Butcher Ltd. v R
awarded full the sum as the C wanted to buy surplus tentage
company had good insurance and it from D. The defined terms of
is better to make a big company take agreemt: Agrees to sell, the price
the loss rather than a local and dates on which will be made
population. shall be agreed on by the parties as
the tents become available. Delivery
Behrend & CO Ltd v Produce
shall be taken as agreed upon by the
Brokers Co Ltd
parties. All disputes will be
The seller failed to despatch the
submitted to arbitration. By the time
whole shipment and delivered it two
of transfer of goods, the control of D
weeks later. The buyer was entitled
changed and they refused to transfer
to refused the delivery on
the tentage, The Court held that
instalment. They were entitled to
there is no contract as the terms are
keep the half of the shipment and be
too vague. (Price)
paid the balance.
HARTLEY V HYMANS [1920]
Jackson v Rotax Motor and Cycle
The seller failed to deliver on time
Company
and asked if he could deliver late.
The Court of Appeal held that
The buyer agreed. On delivery the
acceptance of the first instalment of
buyer refused to pay. HELD: The
the goods does not preclude the
buyer waived his right to have his
buyer from rejecting the future
delivery on time.
instalments. In this particular case, it
The plaintiff agreed to sell 11,000 lb
was justified on basis that the goods
of cotton yarn, 1100lb. per week.
were not of merchantable quality.
The deliveries were supposed to
begin in September 1918, no
deliveries were received by 26.
October and thereafter the deliveries
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were incomplete and in various Lowther v Harris

dates. In the early part of March, A person was entrusted tapestries
1919, the defendant complained by and was told not to sell before
his letters about the delay and asked consulting with the principal. He
for better deliveries. On March 13, sold it, lol. HELD: Even though he
1919, the defendant without giving had only one principal, no general
any previous notice, wrote to the occupation as agent, who normally
plaintiff about the cancelling the bought and sold goods on his own
order. The defendant had not right to account, was still a mercantile agent.
cancel the contract. It was held the The buyer had good title to the
buyer waived his right to have his tapestry.
yarn delivered on time despite their
being no consideration (in other Pearson v Rose & Young
words, the variation of the original Owner entrusted his car to MA in
contract did not require order to obtain offers. With a trick
consideration, because it was a he obtained a registration book and
waiver) sold it. HELD: He had possession of
the car but not of the book. Not
Charles Rickards Ltd v Oppenheim
protected by Factors Act.
C placed an order in August,
thinking the order will take only 6 or Archivent
7 months at most. From March, C Archivent supplied building
pressed for delivery, in June he said materials to a contractor who was
he will not accept the delivery after engaged in building a school for
25 July. The D said the order will SRC. Archivent delivered the
not be ready by that date, he materials to the building site which
cancelled the order. The order was was occupied by the contractor. The
completed in October but C refused contract had a clause reserving title
to pay. The Court held that the time to Archivent until payment by the
was “of the essence”. Sending a contractor was made in full. ⁃ The
letter in June constituted a contractor had a contract with SRC
reasonable notice. The D’s claim which provided that the materials
failed. would become the property of the
council when they were included in
Nemo Dat any interim certificate for which the
Greenwood v Benneth contractor had received payment.
Owner entrusted the car to repair, D [ So for payment of a particular part
used to for his own purposes, of the job.] The materials were
crashed the car, then sold it to a B included in the interim certificate
who did not know that he does not and SRC paid the contractors. ⁃ A
own the car. He cannot transfer receiver was appointed to the
something he does not own. contractor and Archivent had not
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been paid. SRC had acted in good

faith throughout and were unaware
of the clause in the contract
reserving title until after the
appointment of the receivers.
⁃ Archivent sought a return of the
materials. The court recognised that
the Archivent - contractor contract
was not supposed to pass title until
payment. However, the materials
were delivered to SRC by inclusion
in the interim certificate; thus it was
held that the title had passed to the
SRC as a result of s 25(1) (defeating
the retention of title clause).