Commercial Law Revision Notes for the University of Edinburgh LAWS08131 course. Units include sale of goods (SOGA), insurance, intellectual property, competition law, right in security, diligence and insolvency.
Rights in Security: pages 25-34
(1)Personal-Caution: pages 25-27
(2)Real-Asset Securities: pages 27-34
(2)(i) Asset Securities-Floating Charge: pages 32-34
Diligence: pages 35-37
Insolvency: pages 37 -
Sale of Goods
B2B SoGA 1979
- capacity: s3
- s4: may be written (with or without seal), by word of mouth, or partly by both,
OR implied by conduct
- Sale VS Agreement to Sell:
- Sale: s2(4); the transfer of the property of the goods from the seller to
the buyer is a sale
- Agreement to Sell: s2(5); the transfer in the property of goods is to take
place in the future → eg for conditional sales
- goods: s61; everything BUT money
- houses and apartments are NOT goods
- all tangible things but money (except special notes/coins)
- EXCLUDES intangible property such as shares or IP rights
- Existing VS Future Goods s5;
- (1); includes BOTH existing goods & future goods (ie those to be
manufactured or acquired by buyer after the contract of sale)
- future goods: (3); the seller purporting to effect a present sale of
future goods through the contract, the contract is an agreement
to sell the goods
1
, - not yet in existence, or goods in existence, yet not
acquired by seller
- Specific VS Unascertained Goods
- specific goods can never be future goods within s61 (since they
ought to be goods identified and agreed upon at the time of
sale)
- H R & S Sainsbury v Street 1972: a sale of tons of
barley to be grown on a particular farm is NOT sale of
specific goods
- unascertained goods are not specific → become ascertained
once specifically identified
- money consideration: s8:
- (1); price may be fixed OR may be left to be fixed in a manner agreed
OR may be determined by the course of dealing between parties
- if NOT determined according to (1), (2) the price must be
reasonable → depending on facts (3)
- on ‘agreements to agree’ on price in the future:
- May & Butcher v the King 1934: agreement for the sale
of goods at a price to be later fixed is NOT a concluded
contract
- Courtney & Fairbairn v Tolaini Bros Hotel 1975: Court
refused recognition of a contract at ‘a price to be agreed’
- an exchange of goods is NOT covered here; NOT a contract of barter -
there must be monetary payment to make it a contract of sale
- Gift: transfer in property WITHOUT consideration
- Esso Petroleum v Commissioners of Customers 1976: on a
‘gift’ when buying 4 gallons of fuel → Court found that it is not a
gift since it requires payment; but is not a sale of goods either - it
is a collateral contract in parallel to the contract of sale
B2B Seller’s Duties SoGA 1979
- s27: duty to provide the goods in accordance with contract’s terms
- s13: in cases of sale by description; goods are to correspond to the
description
- (3); the goods being seen and selected by the buyer does not mean
that the sale is not one of description - buyer usually relies on label or
packaging for identification of the product
- need to comply with the provided description Beale v Taylor 1961
- s14: goods to be of satisfactory quality
- (2); satisfactory quality means meeting the standard that the
reasonable person would regard as satisfactory, taking account the
description, the price and any relevant circumstances
- fit for purpose for which goods of this kind are commonly
supplied
2
, - appearance and finish
- freedom from defects
- safety
- durability
- NOT a subjective test - but objective: NOT about what the particular
buyer consider reasonable
- EXCEPT s14(2C); if
- i) specifically drawn to buyer’s attention before purchase
- ii) the buyer examined the goods prior to contract and the
examination ought to reveal the defaults
- s14(3); if the buyer has explicitly shared the purpose particularly for
which the goods are bought and they fail to do so EXCEPT if the buyer
cannot reasonably rely on the skill and judgement of the seller
B2B Buyer’s Duties SoGA 1979
- Pay price of agreed goods - otherwise not entitled to claim possession of
goods
- In the absence of a fixed time for payment, buyer ought to pay by the
conclusion of the contract - in cash (unless otherwise specified)
- s10:
- (1); stipulations as to time of payment are not of contract’s essence;
unless a different term in the contract
Effects
- transfer of ownership: exact moment of passing property varies on whether
the goods are specific or unascertained
- Specific:
- property transferred from seller to buyer as soon as contract is
made s2(4)
- s17; property of specific ascertained goods is transferred at the
time that the contracting parties intend it to be
- such intention to be judged based on parties’ conduct,
contract’s terms and circumstances (2)
- where this intention may not be stipulated from the (2) factors,
then turn to s18 rules
- Rule 1: on goods in a deliverable state, property passes to the
buyer when the contract is made - and is immaterial to payment
or time of delivery
- deliverable state: Underwood v Burgh Castle Crick
1922; buyer bound to get the goods if they are at a
deliverable state - in a case of a deconstructed engine,
the goods were found NOT to be deliverable at that stage
- Rule 2: if the seller is bound to do something to the goods to put
them in a deliverable state, the property does not pass until such
thing is done and the buyer has notice that it has been done
3
, - for when something has to be done to the goods (eg
alterations)
- form of notice not stipulated in Act
- Rule 3: if the seller is bound to weigh or measure or test for the
purpose of ascertaining the price, property does not pass until
such thing is done
- Rule 4: on goods delivered to buyer by approval - in such case
ownership is passed to the buyer when (a) he signifies his
approval (b) if he retains the goods without rejection and if a
time passes and expires
- or even doing something which is inconsistent with the
seller’s concurrent ownership - e placing a security over
the goods Kirkham v Attenborough
- Unascertained:
- s16: no property transferred unless goods are ascertained
- this test takes precedence - property may NOT pass until
ascertainment of goods
- on bulk undivided shares exception in s20A: on sales
from part of an identified bulk
- if the bulk is identified in the agreement OR the
buyer has paid the price for some / all the goods
subject to the agreed bulk → then property of an
undivided share in bulk is transferred to the buyer
and buyer becomes owner
- sellers who have paid in advance for a specified
quantity which are part of a bulk which has been
identified, become co-owners ; they simply gain a
share in the ownership at time of delivery
- s17: on parties’ intention
- transfer of risk:
- s5
- when a party is discharged from having to perform obligations, the
other bears the risk
- s20(1); default rule: risk passes with property transfer to buyer
(whether delivery is made or not)
- unless otherwise agreed
- Pignataro v Gilroy 1919: on unascertained goods - a portion of
which were stolen before delivery → found that since the goods
were unascertained, there is no evidence of appropriation by the
buyer and consequently property had not been passed at the
time of loss and seller bore the risk
- exceptions to s20(1)
4
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