This assessment must be submitted electronically via Blackboard

no later than 12 midday BST (British Summer Time) on 1st June

2021.

UNIVERSITY OF BRISTOL

LAW SCHOOL

Timed Open Book Assessment

MAY/JUNE 2021
COMMERCIAL LAW
LAWD30028
This paper contains FIVE questions.
All students must answer TWO questions.

You must answer at least ONE question from Section A. Your second answer may be
from either Section A OR Section B

Only TWO answers will be marked. If you submit more than TWO answers only your
first TWO answers will be marked.

This assessment carries 100% of the marks in this unit.

Your answers must be submitted in Microsoft Word document (.docx) format and each
answer must not exceed 1500 words in length (3000 words in total). No footnotes or
bibliography are allowed.

Please adhere to the TOBA guidelines and be aware of the penalties for exceeding the word
limit.
For details, see Submitting TOBAs in the Law School Nov 2020 on Blackboard:
Law School – Student Pages > Assessments > How to Submit Assessments
SECTION A - You must attempt at least ONE question from this section.

1. Miracle Medical Ltd (“Miracle”) owns a chain of private hospitals. Miracle and Careful
Cleaning Ltd (“Careful”) enter into a contract whereby Careful will provide cleaning
services to Miracle’s hospitals. The written agreement was negotiated and drafted by
Miracle’s Procurement Manager and Careful’s Managing Director. It was signed on 30 th
April 2019 and includes the following express terms:

Clause 1. ‘The overriding purpose of this contract is to ensure excellent standards of

hygiene and to protect patient safety.’

Clause 2. ‘The duration of this contract shall be 7 years.’

Clause 14. ‘When requested to attend any part of one of Miracle’s hospitals to deal with
an urgent incident requiring cleaning, Careful’s operatives will attend within
20 minutes of the request being communicated.’

Clause 15. ‘Careful shall be entitled to a payment in accordance with Table B in Schedule
1 for each incident that its operatives attend in accordance with clause 14.’

Clause 16. ‘In respect of each incident referred to in clause 14 that Careful’s operatives
fail to attend within the required timeframe, Miracle shall be entitled to deduct
from Careful’s annual fee an amount calculated in accordance with Table C of
Schedule 1, provided that Miracle shall at all times apply such deductions in
good faith.’

Miracle and Careful jointly undertake a reconciliation of payments due and

deductions applicable as at 30th April each year. They were able to readily agree this
reconciliation on 30th April 2020, but this year the parties are in dispute over a number
of points as follows:

a) Miracle has applied a deduction under clause 16 in respect of a request for Careful
to attend the delivery entrance to the hospital canteen where a delivery driver had
accidentally dropped a large tray of eggs in the doorway, whilst bringing them in
from his van. Careful says that it did not attend because it is not responsible for
cleaning external areas. Miracle does not consider a doorway that leads from the
outside into the canteen to be an external area and points to the wording ‘any part’
in clause 14;
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Question 1 continued.

b) Miracle applied further deductions under clause 16 in respect of several incidents

one weekend where Careful’s operatives were delayed by up to 30 minutes in
responding to urgent incidents under clause 14. Careful says that this was because
they had a reduced number of staff available to respond, due to Miracle having
asked Careful to assign as many of its operatives as possible to deep cleaning a
ward where there had been an outbreak of an infectious disease;
c) Miracle is refusing to pay a number of Careful’s requests for payment under
clause 15 on the ground that Miracle’s own staff had cleaned up the incident by
the time Careful’s operatives had arrived. Careful accepts that this did happen on
some occasions even though Careful’s operatives had arrived within 20 minutes,
but says that Careful is nonetheless entitled to the payments as clauses 14 and 15
only require that Careful’s operatives attend the incident not clean it up. Miracle
believes that this is a misreading of the relevant clauses and that Careful is also
under a duty to act in good faith in claiming payments, just as Miracle is in
making deductions.

Miracle seeks your advice before making any payment to Careful. Advise Miracle on
the meaning and effect of the relevant contractual provisions.

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2. Colourful Costumes Ltd (“Colourful”) hires out theatrical and fancy dress costumes.
Colourful contracts with Hightown Hippodrome Ltd (“Hightown”) to supply all the
costumes for its annual pantomime which is performed on most days throughout
December. Halfway through December Hightown’s costume manager takes some of the
costumes to Spotless Dry Cleaners (“Spotless”) for cleaning. He signs a form which
contains the following term:

“No liability is accepted for damage caused by the cleaning process to delicate fabrics or
decorative items.”

When the costumes are collected the next day the decorative sequins have been lost from
several of the costumes and the delicate satin trousers have been ruined by the strong
cleaning chemicals used by Spotless. After disappointing ticket sales, Hightown has now
become insolvent, so a claim against Hightown would therefore be fruitless.

Colourful provides 20 costumes to Lowtown Amateur Dramatics Group (“Lowtown”)

free of charge for one week for use in their Christmas production. During the first
performance two of the cast members are injured and unable to perform for the remainder
of the week. Lowtown agrees to hire the two costumes that the injured performers no
longer require to professional dancer Marina for use by her, and her dance partner Paul, in
their upcoming competition. Marina agrees to pay Lowtown £40 for the hire of the two
costumes for one weekend. When Marina returns her costume to Lowtown it is
discovered that she has customised it by cutting the sleeves off. She tells Lowtown that
she does not have the other costume because Paul went off wearing it, after they came last
in the competition and argued. She says that Paul is not answering her calls, but she gives
his telephone number to Lowtown who telephone Paul to request the return of the
costume. Paul says that he assumed Marina had purchased the costumes and he will not
return it. Lowtown tell Marina and Paul that they will be instructing a solicitor to sue
them for damage to one costume and failure to return the other.

On the last night of Lowtown’s production, the cast have an aftershow party. When the
last members of the group leave the performance hall, they forget to turn off the heater.
That night a fire breaks out in the hall and destroys all of the costumes Colourful had
supplied (except the two hired to Marina and Paul which were not in the hall at the time).

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Question 2 continued.

Whilst tidying the fancy dress costumes Lena, who works in Colourful’s shop on
Saturdays, finds a diamond ring in the pocket of a ‘Cruella de Vil’ costume. She knows
that this costume has not been hired out for at least two years, so she does not think it will
be possible to trace the owner and she starts to wear the ring herself. Shobna, the
Managing Director of Colourful is suspicious when Lena says it was a gift, so she calls
the police who confirm that the ring is listed on their database as stolen property. Alarmed
by this, Lena admits where she found the ring. The police are unable to trace the owner of
the ring, as the contact details they have are out-of-date, so Lena hopes to be able to keep
the ring.

Advise Colourful.

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3. Freiburg is a company which deals in coffee beans. Advise Freiburg as to the damages
that it might claim, or for which it might be liable, in each of the following scenarios. In
each scenario you can assume the contract is governed by English law.
a) On 2 January 2021 Freiburg agrees to purchase 50 metric tons of coffee beans from
Luzern. The contract price is €100,000 and the parties’ written agreement states that:
‘The country of origin of the coffee beans shall be Brazil.’ Having taken delivery of
the coffee beans supplied by Luzern and started to process them, it becomes apparent
that the origin of the beans is Kenya rather than Brazil. The origin of the beans,
however, makes no material difference to the various coffee blends produced by
Freiburg and it is able to sell those blends and make its usual profit. The market value
of the Kenyan beans supplied by Luzern was €85,000; the market value of Brazilian
beans in conformity with the contract would have been €105,000.
b) On 15 February 2021 Freiburg agrees to supply Jura with 10,000 kg of coffee beans.
The contract price is €200,000 with delivery agreed for 30 April 2021. Freiburg, in
breach of contract, does not deliver the beans to Jura until 2 June 2021. The market
value of the coffee beans supplied by Freiburg was €19.50 per kg on 2 June 2021 and
€22.00 per kg on 30 April 2021. On 10 May 2021 Jura agreed to sell the beans from
Freiburg to a third party with a contract price of €250,000 and delivery on 6 June
2021. (What difference, if any, would it make to your answer in this scenario if on 10
February 2021 Jura had agreed to supply a third party with 10,000 kg of coffee beans
at a cost of €275,000, and Freiburg was aware its delivery would be used to fulfil
Jura’s contract with the third party?)
c) On 16 December 2020 Freiburg agrees to purchase a consignment of coffee beans
from Vaud. The contract price is €200,000 and delivery is agreed for 18 April 2021.
On 20 March 2021 Vaud indicates that it will be unable to perform its obligations
under the contract. Freiburg terminates the contract on 31 March 2021. On 19 April
2021 Freiburg purchases, at a cost of €240,000, a consignment of coffee beans similar
to that which it had been expecting from Vaud. The market value of the coffee beans
to be supplied by Vaud was €200,000 on 16 December 2020, €205,000 on 20 March
2021, €210,000 on 31 March 2021 and €230,000 on 18 April 2021. (What difference,
if any, would it make to your answer in this scenario if Vaud would, in any event,
have been relieved of its obligation to deliver the coffee beans on account of a
government export ban in force from 11 April 2021?)
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SECTION B

4. ‘Although one might view sections 16 to 20B of the Sale of Goods Act 1979 as
unnecessarily complex, they represent a fair and nuanced set of rules on the passing of
property and risk. That is especially so when it comes to the sale of goods forming part of
a bulk.’
Discuss.

5. Critically discuss the extent to which the law on apparent authority ensures a fair balance
of, on the one hand, the rights and liabilities of third parties with whom an agent contracts
and, on the other hand, those of the principal on whose behalf the agent purports to act.

END OF PAPER