Law Notes Commercial Law Notes
A collection of the best Commercial Law notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LLB samples from outstanding law students with the highest results in England and carefully evaluating each on accuracy, formatting, logical structure, spelling/grammar, conciseness and "wow-factor". Although this set of notes did not earn its author a 1st in exams, the notes are at a high standard and it seems the author just got unlucky.
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Real remedies
Exercisable against the goods, so using the goods as a form of security to protect his position
Resale
Lien Stoppage in Transit
As a general rule when both property and possession has passed the seller has no more right over the goods and has to resort to personal remedies
Personal remedies
Action for price s.49 – effect is to affirm the contract
Action for damages for non-acceptance s.50 – based on the fact that the sale has not taken place
Special damages under s.54 – can be used in either situation
Scenarios
Property has passed and B has accepted the goods – action for price
Property has not passed and B refuses to accept the goods – action for damages
Property has passed and B refuses to accept the goods – Either
Action for price is more favourable than an action for damages
But where property has not passed S is in a dilemma
HE can argue that property has passed to B
Disclaim all responsibility and sue on price
But he runs the risk that the court may decide that property had not passed
And S’s remedy is for non-acceptance
Thus, the seller would have been responsible for mitigating damage by attempting to resell
Which he wouldn’t have done, reducing damages.
BUT If he has done that, the court may treat this as evidence of an acceptance by the seller of repudiation of the contract by the buyer
Thus, even if the property had originally passed to B it will now revert in S and an action in price will no longer lie.
So if his efforts to resell the goods have failed, he will have made his own position worse by attempting to dispose of them, as in the case of Ward v Bignall (1967)
BUYERS DUTIES
Duty to pay the price
Unless otherwise agreed, S is not bound to accept anything other than cash
A cheque is conditional payment only
If the cheque is not honoured seller can sue
On the cheque itself
In which case the buyer cannot set up defences based on breaches of contract
On the contract of sale for the price of goods
The buyer is deemed to be an unpaid seller if a cheque has been received and then dishonoured, s.38(1)b SGA 1979
SELLERS REAL REMEDIES
Fundamental Requirement – Unpaid Seller
Unpaid
Refers to the fact of being unpaid, so applies whether or not payment is due according tot eh contract
S.38(1) SGA 1979 includes failed conditional payment, partial payment etc
Lien, s.39(1)a SGA 1979
What is it?
A right to retain the goods until the whole of the price has been tendered
Requirements
Unpaid Seller
If there are a number of separate contracts, S cannot claim a lien over goods which have been paid for
But sale of goods by installments is still one contract, and the lien may therefore be exercised over any part of the goods, ex parte Chalmers (1873)
In Possession
One sale has been completed and you retain possession you cannot have an USL Valpy v Gibson (1974)
Any of the following
Goods have been sold without any stipulation as to credit
Goods have been sold on credit but the term has expires
Buyer has become insolvent
Defined in s.61(4) SGA 1979 as ceasing to pay his debts in the ordinary course of business or he cannot pay his debts as they become due
Extent of the lien
Only over the payment of the price Somes v British (1860) not storage charges that arose after.
Losing the lien
When you cannot satisfy any of the requirements
Other occasions per s.43 SGA 1979
Delivering the goods to a carrier for transmission to buyer
When buyer lawfully obtains possession of the goods
By waiver of the lien
Stoppage in Transit
Requirements
Buyer of goods is insolvent
S has parted with possession of the goods
The goods are in the course of transit
If goods still with seller or agent lien
If goods with the carrier stoppage in transit
If goods are with buyer too late
Exercising the right
Telling the carrier (if the carrier still delivers the goods when there is a SIT then they are liable in conversion to S)
Taking actual possession of the goods
Termination
When the primary requirements are not met
Effect of the lien or SIT of a disposition by B1, s.47 SGA 1979
There is no effect UNLESS
S has assented
Acknlwoedgment of the sale is not enough Mordaunt Brothers v British Oil and Cake Mills (1910) entry into S’s books of B1s delivery order to B2 was not enough
More circumstantial evidence DF Mount v Jay & Jay (1970) S knew that B would pay the price from money he received when sold. S anxious to get rid of goods in a falling market, so had assented to B’s reselling
Where a document of title has been transferred to someone who takes it for good faith and valuable consideration
It has to be the same document of title as in the S – B1 transaction DF Mount v Jay & Jay (1970)
What does this mean in practice? A purposive construction, looking at the purpose of s.47(2) means that it must be linked in a sense to s.47(1) that you are assenting to the subsale, so by giving B1 a document he could transfer you must have in some way facilitated the sale to B2
Then if disposition to B2 is a
Sale – your lien is defeated
However, S can intercept payment from B2 to B1 (a right of stoppage over the money) ex parte Goldring (1880)
Doubted by Lord Selborne in Kemp v Falk (1882) because surely defeated means defeated for all time. How can you turn it into a right over the proceeds?
Pledge – subject to B2’s right
So S has to pay off the pledge to exercise his USL or SIT. And if the pledgee retains the goods and sells them, S is entitled to claim that the balance of the price is payable to him and not B Kemp v Falk (1882)
Resale, s.48 SGA 1979
A power to resell (the power to give good title, important to B2)
When S still has property in the good which he can pass to B2
S can use the seller in possession exception under s.24 SGA 1979, s.8 FA 1889
Seller has exercised his right of lien or SIT
A right to resell (the power to do without committing a...
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A collection of the best Commercial Law notes the director of Oxbridge Notes (an Oxford law graduate) could find after combing through dozens of LLB samples from outstanding law students with the highest results in England and carefully evaluating each on accuracy, formatting, logical structure, spelling/grammar, conciseness and "wow-factor". Although this set of notes did not earn its author a 1st in exams, the notes are at a high standard and it seems the author just got unlucky.
As an added...
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