SOLVE THE CASES

SOLVE THE CASES

A sales goods to B on 1 Jan 2019, on 5 months credit, is A
unpaid seller on 1 May 2019? State reason.
A is not an unpaid seller, B has time to pay up-till 31 May 2019.
 (in
continuation to above) B becomes insolvent 2 months
after expiry, is he unpaid seller? Why or why not?
A becomes unpaid seller as B has become insolvent.

E sold and delivered a TV to J, it was not functioning properly

so J gave it back to E for repair. Can E exercise his lien over
it? How and why?
E can not exercise his lien over TV.
 SOLVE THE CASES
A sold 2000 bags of rice to B, A delivers the rice to a carrier to carry to
B. Later A gets news that B has become insolvent. Is A unpaid seller
and can A stop delivery? Why and under which provision of law
A can stop delivery under right of stoppage of goods in transit, he is unpaid
seller.
A sold iron to B at Rs. 50,000 a ton. A does not supply, the price
increases to Rs. 60,000 a ton. B wants to sue for damage, can he?
Explain the case.
B can sue for damage, Under suit for damages for non-delivery.
A signs a promissory note and mentions condition “I promise to pay B
Rs. 100,000 in case D dies and leaves me enough money”. Explain the
validity of the instrument with reason.
The instrument is not a valid note under conditional promise.
 SOLVE THE CASES
 A signs a promissory note “I promise to pay 100,000 to B”. Explain the validity of the
instrument with reason.
not a Valid promissory note, certain currency is not mentioned.
 A draws a bill on B, “pay Rs. 10,000 to C or order”. Explain the validity of the
instrument with reason.
It is a valid bill of exchange, as it is unconditional order
 A draws a bill on B, “pay to C Rs. 10,000 and other sum due to him”. Explain the
validity of the instrument with reason
It is not a valid bill of exchange, as it is mentioning uncertain sum.
 A draws a cheque to B on 1 January 2018 as “Pay to X Rs 50,000”. Who can draw the
cheque and till which date the cheque will remain valid.
X can draw the cheque within 6 months time.
CONDITION AND WARRANTY

CASES
Case No. 1

Title of the Case:

Barrow, Lane & Ballard Ltd v Phillip Phillips & Co Ltd [1929] 1 K.B. 574

Summary of the Fact:

A sold to Y 700 bags marked “E.C.P.” and known as lot 7 of Chinese groundnuts, lying in a
specified warehouse. At the time of the sale there were, unknown to parties, only 591 bags, and
109 bags having been stolen.

Issue:
1.Whether the non-existence of the goods at the time of the contract will render the contract void?
2.Whether the seller is entitled to the full amount of money which was agreed between the parties
as the price of the goods in total?
Decision:
It was held that the contract was void. Therefore no duty or liability on the
part of either party shall accrue in this case. The seller is not entitled to the
price and the goods accepted by the buyer shall be returned.

Reasoning:
If, in a contract for the sale of specific goods, the goods have, without the
seller’s knowledge, perished at the time when the contract was made, the
contract is void according to section 6 of the Sale of Goods Act 1979 of
United Kingdom.
Case No. 2

Title of the case: C.N.V. v. Bremer; the Hansa Nord [1976] Q.B. 44.

Summary of the fact:

A written contract to sell fruit pellets contained the express stipulation, “shipment to be
made in good condition.” In fact, some of the pellets were not in good condition when
shipped. However, they were, on arrival, still fit to be used for the purpose the buyer had
intended and although they were worth less than they should have been, they could still
have been re-sold at a reduced price.

Issue:
1.Whether there is a breach of condition?
2.Whether the buyer is entitled to repudiate the contract and reject the goods?
Decision:
It was held that there was no breach of condition and the buyer was not
entitled to repudiate the contract and to reject the goods. But the buyer is
entitled to damages.

Reasoning:
The sellers were not in breach of the implied conditions as to fitness for
purpose and merchantable quality. The express stipulation in the contract
was not a condition and the sellers’ breach of it had not been serious
enough to go to the root of the contract. Therefore the buyers were entitled
only to damages.
Case No. 3

Title of the case: Rowland v. Divall [1923] 2 K.B. 500.

Summary of fact:
Rowland bought a motor-car from Divall and used it for four months. Divall
had no title to the car, and consequently Rowland had to surrender it to the
true owner. Rowland sued to recover the total purchase price he had paid to
Divall.

Issue:
1.Whether there is a breach of condition?
2.Whether the buyer is entitled to recover the total purchase price?
Decision:
It was held that there is a breach of implied condition as to title by the seller and
therefore the buyer is entitled to recover the purchase price in full,
notwithstanding that he used the car for four months.

Reasoning:
There was a breach of condition. Consequently the buyer can repudiate the
contract and reject the goods. But in this case the car was already taken by the
real owner; hence no question of rejection of goods arises. Therefore, the buyer
can repudiate the contract by taking back the full purchase money as damages
due to the breach of condition. The consideration had totally failed on the part of
the seller. The use of the car that he had had was no part of the consideration
that he had contracted for, which was the property in and lawful possession of
the car, whereas what he got was an unlawful which exposed him to the risk of
an action at the suit of the true owner.
Case No. 4

Title of the Case: Microbeads A.C. v. Vinhurst Road Markings [1975] 1 W.L.R.218

Summary of fact:

In a contract, made before May 1970 the seller sold the buyers some road marking machines.
Unknown to them, another company was in the process of patenting their own road marking
apparatus under the patents Act which gave them rights to enforce the patent from November
1970. In 1972 this company brought a patent action against the buyers. The buyers then claimed
against the sellers for breach of the implied condition as to title and breach of the implied
warranty as to quiet possession.

Issue:
1.Whether there was a breach of condition as to title?
2.Whether there was a breach of warranty as to quiet possession?
Decision:
It was held that the sellers were not liable for breach of implied condition. But the
sellers were liable in damages for breach of implied warranty as to quiet
possession.

Reasoning:
There was no breach of condition because at the time of the sale the sellers had
had every right to sell. The goods were not yet brought under patent. The contract
was made before May 1970 and the Patent became enforceable in November
1970. Therefore, the contract is not affected under the Patent Act. On the other
hand, there was a breach of warranty as to quiet possession because that was an
undertaking as to the future.
Case No. 5

Title of the Case: Brown (B.S.) & Son Ltd. V. Craiks Ltd. [1970] 1 W.L.R.
752

Summary of fact:
The buyer of “industrial fabric” found that it was unsuitable for making into
dresses but that it was suitable for other industrial purposes; as such it was
commercially saleable, though at a slightly reduced price.

Issue:
1.Whether the goods were of merchantable quality?
Decision:
It was held that the goods were of merchantable quality.

Reasoning:
The goods could be used for some other purposes and it had commercial
value. Therefore it meets the demand of merchantable quality. If the goods
supplied are useless for any purpose for which goods of that description are
usually used then they are probably not of merchantable quality. On the other
hand, if they are still suitable for some of the purposes for which goods of that
description are usually used and could be re-sold for the same or very nearly
the same price as if they were suitable for every purpose, they will remain of
merchantable quality.