#20299 - L1. What Is Commercial Law - Commercial Sales Law Lecture Notes

L1. What is Commercial Law?

Commercial law refers to the rules controlling and facilitating thebuying and selling of goods and services.

• Scope: This module focuses ondomestic UK saleswhere the buyer, seller, and goods are all present in the UK.

• Core Principle: Correct classification of a contract is crucial because different statutes apply to different types of transactions.

Classification of Contracts

The Sale of Goods Act 1979 (SGA)

For non-consumer contracts (B2B, C2C, or C2B), theSGAapplies if the transaction is a "contract of sale of goods".

The Four Elements of an SGA Contract

1. A Contract: Defined at common law as requiring offer, acceptance, consideration, and intention to create legal relations.

2. Goods: Includes all personal chattels (physical things that can be touched and moved) but excludes land and money.

3. Transfer of Property: Refers to the transfer oflegal ownership(general property) rather than just physical possession.

4. Money Consideration: The price must be paid in monetary form, such as cash, cheque, or credit card.

Transactions NOT covered by SGA

• Gifts: No contract or money consideration is involved.

• Sale of Land: Land and buildings are not classified as "goods".

• Pure Services: Such as a haircut or going to the cinema.

• Bailment/Hire: Only possession is transferred, not ownership.

• Barter: Exchanging one item for another without money consideration.

Mixed Contracts: Goods and Services

Many contracts involve both (e.g., buying a boiler and having it installed). This is also known as a contract for "work and materials".

• The Test: Courts use the"Substance of the Contract Test"to determine which element is more important.

• Goods-heavy: If goods are the substance, applySGA.

• Service-heavy: If skill or labour is the substance, applySGSA.

  • Example: Painting a portrait is a service (SGSA), but a meal in a restaurant is a sale of goods (SGA).

Why it matters:

• UnderSGA, the seller's liability regarding the goods isstrict.

• UnderSGSA, the service provider's liability isfault-based, meaning they must carry out the service with "reasonable care and skill".

Agency Law Basics

Agency is a relationship where aPrincipal (P)authorises anAgent (A)to act on their behalf to create a legal relationship with aThird Party (T).

Creation and Authority

• Creation: Agency can be created by agreement (express or implied), ratification, necessity (emergencies), or estoppel.

• Authority: An agent can only bind their principal if they have the authority to do so.

  • Actual: Can be express (given by words) or implied (given by conduct).

  • Apparent/Ostensible:...