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Commercial law

Wednesday 6 June 2018: 10.00 – 13.15

Candidates will have THREE HOURS AND FIFTEEN MINUTES in which to

answer the questions.

Candidates must answer FOUR of the following EIGHT questions.

Candidates must answer all parts of a question unless otherwise stated.

Permitted materials
Students are permitted to bring into the examination room the following
specified document: one copy of Core Statutes on Commercial & Consumer
Law (Palgrave Macmillan).

© University of London 2018

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1. ‘The unique English system, without any distinct corpus of commercial
rules, has proved an outstanding success.’ Lord Irvine of Lairg, LC
(2001) 64 MLR 333.


2. Paulina owns a garage business which services, repairs and

occasionally sells cars and vans.

Due to other commitments, Paulina is unable to run the business full-

time and appoints Aaron, who has worked for her for five years as one
of three mechanics, to the role of ‘garage manager’. Aaron is given a
badge stating his new title and a new uniform to distinguish him from
other staff. Paulina tells him only to “keep things ticking over for me”.

Aaron has entered into the following agreements:

(a) A contract for a new fault diagnosis system at a cost of

£2,500; and

(b) A contract to refurbish the customer waiting area for a cost

of £5,000; and

(c) A contract with a tyre manufacturer under which their usual

price is discounted by 20% subject to a minimum order of

Paulina has now learned of these agreements. She feels that the first
two contracts are unaffordable and does not wish to be bound by them.

Advise Paulina.

3. ‘The decision in Re Wait (1927) posed a very serious problem to buyers

who paid for goods prior to delivery and the law has not evolved to
address this problem.’


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4. Solent Ltd is a manufacturer of screws and agreed to sell to Brunswick
Ltd 50,000 M5 precision machine screws, tolerance (length) not more
than 0.5mm for £100,000 (including a 20% discount). The screws were
despatched from Solent’s warehouse in Manchester for delivery to
Brunswick in London.

The contract was made on Solent’s written standard terms which include
the following clauses:

(a) The Seller excludes liability for any and all implied terms or
warranties as to the quality, fitness, durability or suitability
of the goods supplied.

(b) The Buyer will inspect the goods and notify any defects to
the Seller within two working days.

(c) The Seller will replace any defective goods on a like-for-

like basis without charge (Buyer liable for all carriage
costs). No replacement goods will be offered where
defects are notified more than five working days after

Solent’s standard terms contain no other express terms as to quality and


The parties have not previously contracted with each other. Solent did
not draw any particular terms to the attention of Brunswick. Both are
sizeable, specialist businesses dealing regularly in goods of this type.
Brunswick inspected the screws eight working days after receiving them
from Solent. Half of the screws are longer than specified by more than
1mm and Brunswick wish to reject the entire order.

Advise Brunswick.

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5. Lusso is a supplier of coffee and coffee machines. Its standard written
terms of business contain the following clause:

“The seller hereby reserves title to: all goods supplied under this
contract; all goods mixed with, manufactured or derived from or
incorporating goods supplied under this contract; the proceeds of
any sale or disposition of the goods supplied under this contract,
which it is agreed are made by the Buyer as fiduciary agent of the

Lusso contracted to sell to Bragga Ltd eight 25kg sacks of raw coffee
beans and the goods were delivered to Bragga.

Four of the 25kg sacks of coffee beans were roasted. The roasted beans
were put back into the sacks in which they were originally supplied. The
sacks identify that they were supplied by Lusso.

The other four 25kg bags were mixed with 100kg of beans of lower
quality supplied by two other suppliers, roasted, ground and placed in
sealed 5kg bags ready for sale. Ten of the 5kg bags have been sold
and the £500 proceeds of sale are now in Bragga’s only bank account.

Bragga are now in insolvent liquidation. Lusso’s invoices for the goods
remain unpaid. Lusso are now seeking advice on the enforceability of
their retention of title clause.

Advise Lusso.

6. ‘The different treatment in law of an equitable and legal assignment of a

chose in action are well-founded.’


7. ‘The consistent criticisms of the nemo dat rule set out in the Sale of
Goods Act 1979 are justified.’


8. ‘The unpaid seller has little to fear as the remedies available to him under
the Sale of Goods Act 1979 are clear and effective.’



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