THIS PAPER IS NOT TO BE REMOVED FROM THE EXAMINATION HALLS

UNIVERSITY OF LONDON LA2017 ZA

LLB
DIPLOMA IN THE COMMON LAW
BSc DEGREES WITH LAW

Commercial law

Friday 9 June 2017: 14.30 – 17.45

Candidates will have THREE HOURS AND FIFTEEN MINUTES in which to

answer the questions.

Candidates should answer FOUR of the following EIGHT questions.

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

Permitted materials
Students are permitted to bring into the examination room the following
specified documents: one copy of each of the following: Factors Act 1889;
Misrepresentation Act 1967; Supply of Goods (Implied Terms) Act 1973; Unfair
Contract Terms Act 1977; Sale of Goods Act 1979; Supply of Goods and
Services Act 1982; Consumer Protection Act 1987; Sale and Supply of Goods
Act 1994; Sale of Goods (Amendment) Act 1995 and one copy of Blackstone’s
Statutes on Commercial & Consumer Law (OUP).

© University of London 2017

UL17/0558
Page 1 of 5
1. ‘When there is conflict, commercial law rightly emphasises adherence to
established commercial practices over rigid doctrines.’

Discuss.

2. Ellen runs a printing business. Her business is not incorporated. Ellen

entered into two contracts with Office Products Ltd, a wholesaler of
printing and general office equipment to purchase:

(a) A contract for an office chair support for £1,000. Ellen

bought this particular chair because she suffers from back
pain. She uses the chair support at her business premises
during the week but has on occasion taken it home for the
weekend when her back pain was particularly bad. She
explained to Office Products Ltd about the specific nature
of her back problems and bought this chair support on their
recommendation. Within a week of starting to use the chair
support, her back pain became worse. She has now
discovered that the chair support is totally inappropriate for
her particular condition. It is now three months since she
purchased the chair support. The chair support cost
£1,000.

(b) A contract for a commercial photo printer costing £12,000.

The printer is designed to print very high quality photos in
large formats with the added advantage that her customers
can connect mobile devices to it and wirelessly print
photos immediately. Almost all of Ellen’s customers have
had difficulty connecting their devices to the printer. When
it has been possible to connect to the printer, the transfer
of data has been extremely slow and large parts of the
image are often missing when it is printed. In the course
of three weeks, Office Products Ltd came to Ellen’s
premises twice to rectify the fault but were unable to do
so. Last week they took the printer away to diagnose the
fault and returned it in working order. They have refused
to tell Ellen what the fault was or what they have done to
correct it. Ellen has now had the printer for a total of four
weeks.

Office Products Ltd claim Ellen is not entitled to reject the goods. Advise
Ellen.

UL17/0558
Page 2 of 5
3. Idris owns a restaurant. He appoints Michelle as restaurant manager to
run it. Idris expressly prohibits Michelle from placing orders for goods
with anyone other than his regular suppliers. Idris has informed his
regular suppliers of Michelle’s appointment. Michelle is also aware that
Idris has a cash flow problem due to several account customers being
slow payers. Idris has decided to refuse to accept any further bookings
from such account customers until their accounts are cleared.

Shortly after Michelle was appointed, the restaurant runs out of takeaway
menus. Idris’s usual printer cannot supply the menus for two weeks and
so Michelle contacts Quickprint Ltd, a new company. Tawny, a
representative of Quickprint, visits the restaurant and Michelle agrees to
purchase menus to the value of £200 on Idris’s behalf.

Tawny, who also works as a representative for a company which

provides an app which customers can use to order takeaway food,
persuades Michelle to purchase a subscription to the app at a cost of
£8,000 per year. Tawny is concerned Michelle does not have authority
to enter into the agreement as restaurant managers normally seek
authority from the owner for such a large amount of money but Michelle
assures her she has the authority. The payment for the first year is now
due.

Colin is an account customer. He makes an account booking for 100

people which Michelle gladly accepts. It subsequently transpires that
there is a large amount of money outstanding on Colin’s account.

When Idris discovers what Michelle has been doing they have an
argument and Michelle resigns. The next day Michelle goes to Morton
& Son Ltd, Idris’s regular supplier of wine, and purchases two dozen
bottles of wine on credit to Idris’s account. Michelle has a party at which
all of the wine is consumed.

Advise Idris.

4. ‘Retention of title clauses which seek to assert the seller’s rights over
manufactured goods and proceeds of sale very often fail.’

Discuss.

UL17/0558
Page 3 of 5
5. Klassic Parts Ltd is business supplying car parts. Klassic Parts Ltd has
experienced a substantial fall in sales and have now entered insolvent
liquidation. The liquidator, Evangeline, has now become aware of the
following:

A month prior to liquidation, Klassic Parts Ltd had in stock in their

London warehouse 500 ‘Toucan Crossply’ tyres. These are made for
older cars and come in just one size.

Andre, Barack, Clem and Douglas represent parts retailers and have
each agreed to buy 100 Toucan Crossply Tyres at a price of £25 per
tyre. Andre, Barack, Clem and Douglas have each duly paid £2,500.
Klassic Parts have now notified each of the four buyers that their
tyres are in their London warehouse and can be collected whenever they
wish. Andre, who needs his tyres for a trade show, travels to London and
collects his 100 tyres.

Barack, Clem and Douglas have still to collect their tyres. Before they do
so it is discovered that a number have been stolen. The theft appears to
have taken place shortly before Andre collected his 100 tyres.

Discuss the rights and liabilities of the parties in the following alternative
circumstances:

(a) the number of tyres stolen was 100;

(b) the number of tyres stolen was 200;

(c) as in (ii) but it is discovered that Andre has, by special

arrangement with Klassic Parts, paid only £1,250 and still
owes the balance; and

(d) the location of the tyres had not been notified to the buyers.

UL17/0558
Page 4 of 5
6. Lucy took a car on hire purchase terms from Performance Finance Ltd.
Lucy could not afford the monthly payments and with five instalments
still to pay, Lucy sold it to Remy, a motor dealer, for £14,000. Remy then
sold the car to Aleen, a driving instructor, for £16,000.

Aleen took the car to Bob, a local garage owner, to be repaired. A few
days later Bob telephoned Aleen to say that he had received an offer of
£17,000 for the car. This was completely untrue. Aleen said that she
would be willing to sell the car for £17,000 and asked Bob to do so if this
was possible. Bob sold the car, together with a forged registration
document which he had obtained, to Patsy for £14,000.

Patsy then sold the car to Jarvis for £15,000. Patsy accepted a cheque
from Jarvis for the purchase price. The cheque was dishonoured and so,
unable to contact Jarvis, Patsy immediately contacted the police. Jarvis
then sold the car to Matthew for £15,500.

Advise Matthew.

7. ‘A CIF sale is not a sale of goods, but a sale of documents relating to

goods.’ Scrutton J in Arnold Karberg & Co. v Blythe Green Jourdain &
Co. (1915).

Discuss.

8. Donaldson LJ said in Intraco Ltd v Notis Shipping Corporation of Liberia,

The Bhoja Trade (1981) that documentary credits were the ‘lifeblood
of international commerce’, and warned that, ‘thrombosis will occur if,
unless fraud is involved, courts intervene and thereby disturb the
mercantile practice of treating rights there under as being equivalent to
cash in hand.’

Discuss.

END OF PAPER

UL17/0558
Page 5 of 5