LA2017 October B2

LLB
BSc DEGREES WITH LAW
GradDip COMMERCIAL LAW

Commercial law

Thursday 21 October 2021

BLOCK 2 Available at: 12:00 UK time on Thursday 21 October 2021

Submit before: 17:00 UK time on Thursday 21 October 2021

You have FIVE HOURS in which to write your answers and upload them in the
required .doc or .docx format to the VLE. You are not expected to spend more
than FOUR HOURS writing your answers. The remaining hour is for
downloading, uploading, and to take short rest breaks.

You must answer THREE of the following SIX questions. You must answer all
parts of a question unless otherwise stated.

The word limit for this examination is 4,500 words. Any words beyond this limit
will not be read by the examiners.

© University of London 2021

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1. Aeton Ltd. has developed a new electric car, the Aeton I, which, under
test conditions, has a range of up to 1,200km and an artificial
intelligence-based self-drive system. Each car costs £65,000.

Under an agreement entered into on 2nd June 2020, Huey acquired two
Aeton I cars on hire purchase from Aeton. The agreement under which
they are supplied includes the following term:

“The Parties agree that any conditions or warranties implied as to the

quality or fitness of the goods are hereby excluded to the fullest possible
allowable by law.”

The cars were delivered to Huey by Aeton’s carrier on 30th January 2021.
In the course of being transported, a piece of debris, blown by strong
winds, struck the side of one of the cars, breaking a wing mirror and its
housing and damaging the paintwork on one of the doors.

Huey complained about the damage but was told that Aeton were not
responsible, and that under the terms of the hire-purchase agreement,
he must rectify it. Huey has refused to do so.

Since January, both cars have been affected by defects in the periodic
software updates automatically sent to the cars by Aeton. As a result of
one update, which did not complete, both cars were unusable for over a
week. As a result of a later update, the cars would occasionally go into
“safety mode” and could only be driven at under 20 miles per hour. The
most recent update in March 2021 appears to have finally solved these
problems. However, in everyday use, the cars have had a range of only
around 400-500km on a single charge, irrespective of weather
conditions, temperature or where the cars are being driven.

In April 2021, Huey was driving at night when a small deer ran into the
road. The car’s artificial intelligence-based safety system mistook the
animal for a child and performed a violent evasive manoeuvre, causing
the car to swerve violently and leave the road. Huey fractured a rib and
suffered cuts and bruises. The car suffered minor damage which will
cost around £3,000 to rectify.

He was so shaken by the incident neither he nor his family have felt able
to use either car since and do not wish to keep them.

Advise Huey.

2. ‘The reforms to the rules on passing of property ushered in by the Sale

of Goods (Amendment) Act 1994 were welcome but limited. It is
pleasing therefore to see that at least for consumers, the passing of
property rules may now be further improved.’

Discuss.

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3. After more than a year of very difficult trading conditions, Towcester
Timber Ltd. has entered insolvent liquidation. Adebi has been appointed
as liquidator.

Shortly before insolvency, vandals broke into the offices of Towcester

Timber and started a fire, which spread to the adjacent warehouse.
While some goods in the warehouse were unaffected, others were
damaged by fire, smoke, water from the fire suppression system, or a
combination of the three.

Prior to insolvency Towcester Timber concluded:

(a) An agreement with Albany Joinery to sell 20 large sheets of 13mm

MDF board. Towcester Timber had removed 20 sheets from a large
stack, wrapped them in plastic and attached a dispatch note and
receipt, which clearly identified Albany Joinery as the buyer. The
goods were set aside in the dispatch area of the warehouse to await
collection.

(b) An agreement with Boreal Services Ltd to sell a petrol Hommel Log
Pro log splitter, which Towcester Timber owned and were now
selling. Towcester Timber agreed they would undertake a major
service of the whole machine before delivery including replacing all
fluids, spark plugs, timing belts and hydraulic lines and having the
casing cleaned and repainted.

(c) An agreement with Capel Interiors Ltd. to sell the entire stock of 19
square metres of sapele wood veneer. The fire has scorched and
blackened two square metre sheets making them unusable. The
remaining seventeen square metres are undamaged. Capel Interiors
had a credit account with Towcester Timber.

(d) An agreement with DDM Builders Ltd. to sell 30 lengths of exterior

joist from Towcester Timber’s warehouse stock three days before the
fire and paid in full. After the fire, of 70 lengths of exterior joist only
25 were in a useable condition, the remaining 45 were destroyed or
very badly damaged.

(e) An agreement with Egret Furniture to sell 50m2 of pine floorboards.

Towcester Timber’s entire stock of 500m2 of pine floorboards was
destroyed in the fire.

The agreements were all made on Towcester Timber’s standard terms

of business, which contain no stipulations as to when property is to pass,
except for stating that no property will pass in goods sold on credit, until
they are paid for in full.

The buyers are now calling for delivery of their goods.

Advise Adebi.

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4. ‘Whenever the House of Lords had the opportunity to construct a coherent
framework around retention of title clauses, it neglected to do so.
Fortunately, the lower courts saw this was a necessity.’

Discuss.

5. Ayaan owns Tyres Abound Ltd., which supplies and fits tyres. Ayaan
purchased the business two years ago from Bry, who has continued to
work for him. Ayaan opened two more branches. As a result, he was
unable to be at the main branch as often and asked Bry to “take charge
when I am not around,” adding, “try not to spend more than £500 on
anything.” Ayaan spent more time at the new branches leaving Bry in
charge of the main branch. Ayaan agreed to pay Bry 10% on top of his
basic salary for the extra work. Ayaan also told his most regular supplier
that Bry would be in charge when he was absent.

Ayaan has returned to the main branch and discovered the following:

(a) Bry instructed the company’s solicitor to reach an agreement

in a contractual dispute with wholesaler Whitwell Tyres Ltd.
Despite their dispute, Ayaan was keen to stay on good terms
with Whitwell Tyres Ltd. because he needed additional
supplies for his new branches. Bry agreed, through the
solicitor, to settle the dispute for £5,000. The solicitor’s fees
were £700. The solicitor knew the business had been sold
and asked Bry if Ayaan had instructed him to try to resolve the
dispute. Bry said Ayaan had asked him to “sort out some
problems”.

(b) A £15,000 invoice for refurbishing the customer waiting area

after it was damaged by water from a burst pipe.

(c) An invoice for £20,000 for tyres sold by BMC Ltd., who have
not sold anything to Tyres Abound Ltd. since Bry sold the
business to Ayaan.

After discovering that Bry had entered into these agreements, Ayaan
called Bry, sacked him, and told him to come to work only to return his
keys.

Bry went to return his keys; Ayaan was not there. Bry served some
customers then went to Ayaan’s office. No one stopped him. From the
office phone Bry ordered £5,000 worth of tyres from a competitor, which
Tyres Abound Ltd. did not need. Payment for the tyres is now due.

Advise Ayaan.

6. ‘Commercial law is right to style itself as “an engine for trade”.’

Discuss.

END OF PAPER
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