Q&A Series Commercial Law THIRD EDITION pot

Cavendish
Publishing
Limited
London • Sydney • Portland, Oregon
Q&A Series

Commercial
Law
THIRD EDITION


Cavendish
Publishing
Limited
London • Sydney • Portland, Oregon
Q&A Series

Commercial
Law
THIRD EDITION
Paul Dobson, LLB, Barrister
Code Administrator for the Direct Selling Association
and

Jo Reddy, LLB, LLM, Barrister

Third edition first published in Great Britain 2003 by
Cavendish Publishing Limited, The Glass House,
Wharton Street, London WC1X 9PX, United Kingdom

Telephone: + 44 (0)20 7278 8000 Facsimile: + 44 (0)20 7278 8080
Email:
Website: www.cavendishpublishing.com

Published in the United States by Cavendish Publishing
c/o International Specialized Book Services,
5804 NE Hassalo Street, Portland,
Oregon 97213-3644, USA

Published in Australia by Cavendish Publishing (Australia) Pty Ltd
3/303 Barrenjoey Road, Newport, NSW 2106, Australia

© Dobson, P, Reddy, J 2003
First edition 1994
Second edition 2000
Third edition 2003
All rights reserved. No part of this publication may be reproduced, stored in a
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and you must impose the same condition on any acquirer.

British Library Cataloguing in Publication Data
Dobson, AP (Alan Paul), 1945–
Commercial law—3rd ed—(Q&A series)
1 Commercial law—England

I Title II Reddy, KJ
346.4'2'07

Library of Congress Cataloguing in Publication Data
Data available
ISBN 1-85941-740-X

1 3 5 7 9 10 8 6 4 2
Printed and bound in Great Britain


v
CONTENTS
Table of Cases vii
Table of Statutes xvii
Table of Statutory Instruments xx
1 General Questions 1
2 Description and Quality 15
3 Passing of Property and Risk 53
4 Nemo Dat Quod Non Habet 71
5 Performance and Remedies 85
6 Making and Cancelling a Credit Agreement 95
7 Default and Termination of Credit Agreements 111
8 Connected Lender Liability 131
9 General Principles of Agency 141
10 Relationship with Third Parties 169
11 Fob Contracts 201
12 Cif Contracts 233
Index 261

vii
TABLE OF CASES
NB: CCLR denotes Consumer Credit Law Reports which were published
until 2000 in Consumer Credit Control by Bennion and Dobson, but are now
published as part of Sweet & Maxwell’s Encyclopedia of Consumer Credit Law.
Agricultores Federados Argentinos v Ampro SA
[1965] 2 Lloyd’s Rep 757 215, 219, 229
Ailsa Craig Fishing v Malvern Fishing [1983] 1 All ER 449 30
Albermarle Supply Co v Hind [1928] 1 KB 307 128
Aldridge v Johnson (1857) 7 E & B 885 62
Aliakmon, The
See Leigh and Sillavan v Aliakmon Shipping Co, The Aliakmon
Allam & Co v Europa Poster Services [1968] 1 All ER 826 144
Alliance and Leicester Building Society v Babbs [1993] CCLR 77 109
Alpha Trading Ltd v Dunnshaw-Patten [1981] QB 290 165, 166
AMB Imballaggi Plastici SRL v Pacflex Ltd
[1999] 2 All ER (Comm) 249 175
Andrews Bros Ltd v Singer & Co Ltd [1934] 1 KB 17 27
Andrews v Hopkinson [1957] 1 QB 229 23, 28, 150
Anglo-African Shipping Co of New York Inc
v J Mortner Ltd [1962] 1 Lloyd’s Rep 610 176
Arcos Ltd v EA Ronaasen & Son [1933] AC 470 38, 230, 249
Armagas v Mundogas [1986] 2 All ER 385 174, 186, 187, 188, 189
Armour v Thyssen [1990] 3 All ER 481 55, 57
Ashington Piggeries v Hill [1972] AC 441 39, 237
Associated Distributors v Hall [1938] 2 KB 83 123
Aswan v Lupdine [1987] 1 WLR 1 34
Attorney General for Hong Kong v Reid [1994] 1 All ER 1 146

Attorney General v Leopold Walford (London) Ltd
(1923) 14 Lloyd’s Rep 359 214
Automotive Financial Services v Henderson [1993] CCLR 55 104
B & P Wholesale Distributors v Marko (1953) unreported 241
Bankers Trust v State Bank of India [1991] 1 Lloyd’s Rep 587 204, 207
Barclays Bank v Quincecare Ltd [1988] FTLR 507 198
Bartlett v Sydney Marcus [1965] 1 WLR 1013 23
Beale v Taylor [1967] 1 WLR 1193 33
Bence Graphics v Fasson UK [1997] 3 WLR 205 211
Bentinck v Cromwell Engineering [1971] 1 QB 324 128

viii Table of Cases
Bernstein v Pamson Motors (Golders Green) Ltd
[1987] 2 All ER 22 25, 36, 91, 210
Biddell Bros v Clemens Horst & Co [1912] AC 18 252, 256
Boardman v Phipps [1966] 3 All ER 721 145, 147, 167, 182
Bolton Partners v Lambert (1889) 41 Ch D 295 170, 173
Bondina Ltd v Rollaway Shower Blinds Ltd [1986] 1 WLR 517 153
Borden v Scottish Timber Products Ltd [1981] Ch 25 58
Boston Deep Sea Fishing and Ice Co v Ansell (1888) 39 Ch D 339 250, 255, 257
Bowes v Shand (1877) 2 App Cas 455 215, 232, 249, 252,
254, 256, 258
Bowmakers v Barnet Instruments [1945] KB 65 114, 118
Bowmakers v Wycombe Motors [1946] KB 505 129
Brandt & Co v Morris & Co [1917] 2 KB 784 217
Branwhite v Worcester Works Finance [1969] 1 AC 532 98
British Airways Board v Taylor [1976] 1 WLR 13 45
British Imex Industries Ltd v Midland Bank Ltd [1958] 1 QB 542 244
Bunge & Co Ltd v Tradax England Ltd [1975] 2 Lloyd’s Rep 235 214, 239
Burrell v Jones (1819) 3 B & Ald 47 148

Burstall v Grimsdale (1906) 11 Com Cas 280 253, 256
Butterworth v Kingsway Motors [1954] 1 WLR 1286 74, 116
Cammell Laird v Manganese Bronze and Brass [1934] AC 402 23
Caparo v Dickman [1990] 2 WLR 358 189, 190
Car and Universal Finance v Caldwell [1965] 1 QB 525 80
Cehave v Bremer, The Hansa Nord [1976] 1 QB 44 25, 39
Central Newbury Car Auctions v Unity Finance [1957] 1 QB 371 76
Chartered Trust v Pitcher [1987] CCLR 71 114
Chaudry v Prabhakar [1988] 3 All ER 718 144, 197
Chubb Cash Ltd v John Crilley & Son [1983] 1 WLR 599 74
City Trust v Levy [1988] 1 WLR 1051 185
Clarkson Booker Ltd v Andjel [1964] 2 QB 775 151
Clough Mill v Martin [1985] 1 WLR 111 55, 57
Coles v Enoch [1939] 3 All ER 327 164
Collen v Wright [1857] 8 E & B 647 150, 154, 190, 191, 199
Colley v Overseas Exporters [1921] 3 KB 302 217
Collins v Associated Greyhound
Racecourses Ltd [1930] 1 Ch 1 149
Cunningham, J and J v Robert A Monroe [1922] 28 Com Cas 42 221
Daun v Simmins (1879) 41 LT 783 184, 195
Davies v Sumner [1984] 1 WLR 130 28
Dawson v Dutfield [1936] 2 All ER 232 50

Table of Cases ix
De Bussche v Alt [1878] 8 Ch D 286 144, 170, 172
Diamond Alkali Export Corp v Fl Bourgeois [1921] 3 KB 443 254, 256
Dimond v Lovell [2000] 2 WLR 1121 106
Director General of Fair Trading
v First National Bank [2000] 2 All ER 759 11
Discount Records Ltd v Barclays Bank [1975] 1 WLR 315 207

Donald H Scott Ltd v Barclays Bank Ltd [1923] 2 KB 1 254
Donoghue v Stevenson [1932] AC 562 17
Dyster v Randall & Sons [1926] Ch 932 176
Ealing LBC v Taylor [1995] Crim LR 156 44
East v Maurer [1991] 2 All ER 733 35
Edgington v Fitzmaurice (1885) 24 Ch D 459 35
El Amria and the El Minia [1982] 2 Lloyd’s Rep 28 214
Elafi, The
See Karlshamns Olje Fabriker v Eastport
Navigation Corp, The Elafi
Equitable Trust Co of New York
v Dawson Partners Ltd (1927) 27 L1L Rep 49 203, 230, 239
Esso Petroleum v Commissioners
for Customs and Excise [1976] 1 WLR 1 49
European Asian Bank v Punjab
& Sind Bank (No 2) [1983] 1 WLR 642 179
Farrand v Lazarus [2002] 3 All ER 175 (DC) 44
Financings v Baldock [1963] 1 All ER 443 113, 119, 120, 127
Financings v Stimson [1962] 1 WLR 1184 97
First Energy (UK) Ltd v Hungarian
International Bank [1993] 2 Lloyd’s Rep 194 186, 187, 189
Fraser v Furman [1967] 1 WLR 898 171
Frebold and Sturznickel (Trading as Panda OGH)
v Circle Products Ltd (1970) 1 Lloyd’s Rep 499 211
Freeman and Lockyer v Buckhurst Park Properties
(Mangal) Ltd [1964] 1 All ER 680 171, 179, 182, 183, 184,
185, 187, 188, 194,
196, 197, 205
Galatia, The
See Golodetz, M & Co Inc v Czarnikow Rionda Line, The Galatia

Gian Singh v Banque de L’Indochine [1974] 1 WLR 1234 206
Gill and Duffus v Berger & Co [1984] AC 382 87, 244, 252

x Table of Cases
Glencore Grain Rotterdam BV v Lebanese Organisation
for International Commerce [1997] 4 All ER 514 87, 236
Golodetz, M & Co Inc v Czarnikow Rionda Line,
The Galatia [1980] 1 WLR 495 244
Goulston Discount v Clark [1967] 2 QB 493 120
Green v Cade [1978] 1 Lloyd’s Rep 602 29
Greer v Downs Supply Co [1927] 2 KB 28 181
Griffiths v Peter Conway [1939] 1 All ER 685 134
Groom Ltd, C v Barber [1915] 1 KB 316 254
Grover and Grover v Matthews [1910] 2 KB 401 170, 173
Gurtner v Beaton [1993] 2 Lloyd’s Rep 369 186, 194
Hackett v Advanced Medical Computer
Systems Ltd [1999] CLC 160 157, 161
Hadley v Baxendale (1854) 9 Exch 341 212, 226, 242
Hallett’s Estate, Re, sub nom
Knatchbull v Hallett (1880) 13 Ch D 696 56
Hansa Nord, The
See Cehave v Bremer
Harlingdon and Leinster v Christopher
Hull Fine Art Ltd [1990] 1 All ER 737 32, 33
Harnett v Yielding (1805) 2 Sch & Lef 549 226
Heap v Motorists Advisory Agency [1923] 1 KB 577 78
Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 36, 146, 189
Helby v Matthews [1895] AC 471 72
Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549 197, 205
Hendy Lennox Ltd v Grahame Puttick Ltd [1984] 2 All ER 152 58

Henry Dean & Sons (Sydney) Ltd
v O’Day Pty Ltd [1927] 39 CLR 330 246
Henthorn v Fraser [1892] 2 Ch 27 97, 102
Hippisley v Knee Bros [1905] 1 KB 1 147, 167
Hirji Mulji v Cheong Yue Steamship Co Ltd [1926] AC 497 226
Hoffberger v Ascot International
Bloodstock Bureau (1976) 120 SJ 130, CA 88
Hong Kong Fir v Kawasaki Kisen [1962] 1 All ER 474 25, 39
Howell v Coupland (1876) 1 QBD 258 63, 68
Hughes v Metropolitan Railway (1877) 2 App Cas 439 221
Hyde v Wrench (1840) 3 Beav 334 223
Ian Stach Ltd v Baker Bosley Ltd [1958] 2 QB 120 212, 219

Table of Cases xi
Ingmar GB Ltd v Eaton Leonard Technologies Inc
[2001] 1 All ER (Comm) 329 157, 161
Ingram v Little [1961] 1 QB 31 80
Jackson v Rotax Motor and Cycle Co [1910] 2 KB 937 91
Jacobs v Morris [1902] 1 Ch 816 197
James Finlay & Co Ltd v Kwik Hoo long [1929] 1 KB 400 252
Johnson v Agnew [1979] 2 WLR 487 88
Johnson v Taylor Bros [1920] AC 144 256
Jones v Boyce [1816] 1 Starkie 493; 171 ER 540 19
Julia, The [1949] AC 293; LJR 513 237, 244, 248, 256, 258
Karaganda Ltd v Midland Bank plc [1999] All ER (D) 431 204
Karlshamns Olje Fabriker v Eastport
Navigation Corp, The Elafi [1982] 1 All ER 208 62
Keighley Maxsted & Co v Durant [1901] AC 240 155, 156, 170, 172, 177, 195
Kelner v Baxter (1866) LR 2 CP 174 149, 154, 170, 172
Knatchbull v Hallett

See Hallett’s Estate, Re
Kofi Sunkersette Obu v Strauss & Co Ltd [1951] AC 243 159, 164
Kwei Tek Chao v British Traders
and Shippers Ltd [1954] 2 QB 459; 2 WLR 365; 98 SJ 163 207, 211, 231,
235, 244, 249, 252
Lamb v Goring Brick Co [1932] 1 KB 605 175
Law and Bonar Ltd v British American Tobacco Ltd [1916] 2 KB 605 248, 253
Leaf v International Galleries [1950] 1 All ER 693 99
Leigh and Sillavan v Aliakmon Shipping Co,
The Aliakmon [1986] 2 All ER 145 66, 246
Lewis v Averay [1972] 1 QB 198 80
Lloyds Bowmaker Leasing Ltd v MacDonald [1993] CCLR 65 103
Logicrose Ltd v Southend United
Football Club Ltd [1988] 1 WLR 1256 146, 172, 182
Lombard North Central v Butterworth [1987] 1 All ER 267; CCLR 41 113, 118, 127
London Wine Shippers, Re [1986] PCC 121 60
Lupton v White (1808) 15 Ves 432 146
Luxor (Eastbourne) Ltd v Cooper [1941] 1 All ER 43 166
Mahesan v Malaysia Government Officers’
Co-operative Housing Society Ltd [1979] AC 374 146
Maine Spinning Co v Sutcliffe & Co [1917] 87 LJ KB 382 253, 256

xii Table of Cases
Manbre Saccharine Co Ltd v Sugar Beet
Products Co Ltd (1919) unreported 236
Maple Flock Co v Universal Furniture Products [1934] 1 KB 148 92, 93
Marsh v Jelf (1862) 3 F & F 234 164
Mash and Murrell Ltd v Joseph I Emanuel Ltd [1961] 1 WLR 862 231, 241, 245
MFI Warehouses v Nattrass [1973] 1 WLR 307 46
Midland Bank Ltd v Reckitt [1933] AC 1 198

Midland Bank v Seymour [1955] 2 Lloyd’s Rep 147 204
Mihalis Angelos, The [1971] 1 QB 164 87, 215
Mitchell v Finney Lock Seeds [1983] 2 AC 803 30
Montgomerie v United Kingdom Mutual
Steamship Association [1891] 1 QB 370 151
Moore & Co and Landauer & Co, Re [1921] 2 KB 519 40, 41, 232
Moore v Piretta [1999] 1 All ER 174 157, 161
Moorgate Mercantile Leasing Ltd v Gell and Ugolini [1988] CCLR1 103
Moorgate Mercantile Leasing Ltd v Twitchings [1976] 2 All ER 641, HL 72
Murphy v Brentwood District Council [1990] 1 AC 399 17
Museprime Properties v Adhill [1990] 2 EGLR 196 35
Naish v Gore [1971] 3 All ER 731 43
Nash v Dix (1898) 78 LT 445 176
National Mutual General Insurance
Association v Jones [1988] 2 WLR 952 73, 83
Newborne v Sensolid [1954] 1 QB 45 149
Newtons of Wembley v Williams [1965] 1 QB 560 82
Norman v Bennett [1974] 1 WLR 1229 43, 44
Northey v Trevillion (1902) 7 Com Cas 201 195
Oliver v Court (1820) Dan 301 146
Olympia Oil and Cake Co and Produce Brokers Ltd, Re [1915] 1 KB 233 236
Overstone v Shipway [1962] 1 WLR 117 114
Page v Combined Shipping and Trading
Co Ltd [1997] 3 All ER 656 157, 161
Pagnan v Corbisa [1970] 1 WLR 1306 87, 88
Pagnan v Tradax Ocean Transportation [1986] 3 All ER 565 216
Panchaud Frères v Etablissements
General Grain [1970] 1 Lloyd’s Rep 53 235
Pavia & Co SpA v Thurmann-Nielsen [1952] 2 QB 84 208, 218, 219,
229, 239, 248

Payne v Cave (1789) 3 Term Rep 148 223
Peachdart Ltd, Re [1984] Ch 131 58
Pearson v Rose and Young [1951] 1 KB 275 77

Table of Cases xiii
Perm v Bristol and West Building Society [1997] 1 WLR 1335 187, 190
Perkins v Bell [1893] 1 QB 193 240
Pfeiffer GmbH v Arbuthnot Factors [1988] 1 WLR 150 56
Phillips v Brooks [1919] 2 KB 243 80, 81
Phonogram v Lane [1982] QB 938 149
Photo Productions v Securicor Transport [1980] 2 WLR 289 27
Polhill v Walter (1832) 3 B & Ald 114 181
Pound & Co Ltd v Hardy & Co Inc [1956] AC 588 217
Power Curber International v National
Bank of Kuwait [1981] 1 WLR 1233 203, 206
Pyrene Co Ltd v Scindia Navigation Co Ltd [1954] 2 QB 402 214, 241
R and B Customs Brokers v United
Dominions Trust [1988] 1 All ER 847 22, 28
R v Shrewsbury Crown Court ex p Venables
(1994) unreported, referred to in [1994] Crim LR 61 45
R v Southwood [1987] RTR 273 44
R v Sunair Holidays [1973] 1 WLR 1105 45
R v Thomson Holidays [1974] QB 592 46
Rama Corp Ltd v Proved Tin and
General Investment [1952] 2 QB 147 171, 179, 186
Rayner, JH & Co v Hambro’s Bank Ltd [1943] 1 KB 37 204
Reardon Smith Line v Ynguiar Hansen-Tangen [1976] 1 WLR 989 41, 232
Regier v Campbell-Stuart (1939) unreported 181
Rogers v Parish [1987] QB 933 23
Rolls Razor v Cox [1967] 1 QB 552 76

Ross T Smyth & Co Ltd (Liverpool)
v WN Lindsay Ltd [1953] 1 WLR 1280 242
Routledge v Grant (1828) 4 Bing 653 223
Rowland v Divall [1923] 2 KB 500 75, 79
Royscot Trust Ltd v Rogerson [1991] CCLR 45 35, 99, 206
Said v Butt [1920] 3 KB 497 175, 176
Sainsbury v Street [1972] 1 WLR 834 68, 69
Santa Caterina, The
See Vlassopulos Ltd v Ney Shipping Ltd, The Santa Caterina
Schmalz v Avery (1851) 16 QB 655 151
Shanklin Pier v Detel Products [1951] 2 KB 854 49
Shine v General Guarantee Corp [1988] 1 All ER 911 23
Shogun v Hudson [2002] 2 WLR 867; [2001] EWCA Civ 10 80
Simmons v Potter [1975] RTR 347 44
Sims v Bond (1833) 5 B & Ald 389 149

xiv Table of Cases
Sinason-Teicher Inter-American Grain Corp
v Oilcakes and Oilseeds Trading Co Ltd [1954] 1 WLR 1394 209
Slater v Fining [1997] AC 473 134
Solley v Wood (1852) 16 Beav 370 144
Soproma SpA v Marine and Animal
By-Products Corp [1966] 1 Lloyd’s Rep 367 203–04, 211, 220, 250
Stadium Finance v Robbins [1962] 2 All ER 633 77
Stephenson v Rogers [1999] QB 1028 28
Sterns v Vickers [1923] 1 KB 78 68
Stevenson v Beverley Bentinck [1976] 1 WLR 483 72
Summers v Solomon (1857) 7 E & B 879 180, 183, 185, 192,
194, 203, 205
Suzuki & Co v Burgett v Newsam (1922) 10 LlL Rep 223 252

Swan, The [1968] 1 Lloyd’s Rep 5 148, 151, 153, 178, 180
Sztejn v Henry Schroder Banking Corp (1941) NT Supp (2d) 631 206
Tai Hing Cotton Mill v Kamsing
Knitting Factory [1978] 2 WLR 62 86, 88
Teheran Europe Co Ltd v ST Belton [1968] 2 QB 545 156
Tesco Supermarkets v Nattrass [1971] 2 All ER 127 46
Thornett and Fehr v Beers & Son [1919] 1 KB 486 22
Thornton v Fehr [1935] 51 Lloyd’s Rep 330 148, 154
Tiedemann and Ledermann Freres, Re [1899] 2 QB 66 172, 173
Tradax Export v André & Cie [1976] 1 Lloyd’s Rep 416 242
Trans Trust SPRL v Danubian Trading Co Ltd [1952] 2 QB 297 212, 242
Truk v Tokmakidis [2000] 1 Lloyd’s Rep 543 25, 36, 91, 210
Tsakiroglou v Noblee Thorl [1962] AC 93 216
Tukan Timber v Barclays Bank [1987] 1 Lloyd’s Rep 171 206
Turnbull v Garden [1869] 20 LT 218 145
Turner v Goldsmith [1891] 1 QB 544 195
Turpin v Bilton [1843] 5 Man & G 455 143
Tzelepi, The (1991) unreported 143
Union Transport Finance v British Car Auctions [1978] 2 All ER 385 130
United Bank of Kuwait v Hamoud [1988] 1 WLR 1051 185, 194
United City Merchants (Investments)
v Royal Bank of Canada [1982] QB 208 206
United Dominions Trust v Taylor 1980 SLT 28; CCLR 29 140
Victoria Laundry [Windsor] Ltd v Newman Industries Ltd
[1949] 1 All ER 997 181

Table of Cases xv
Vlassopulos Ltd v Ney Shipping Ltd,
The Santa Caterina [1977] 1 Lloyd’s Rep 478 148
Wadham Stringer v Meaney [1981] 1 WLR 39 123, 126

Wait, Re [1927] 1 Ch 606 60
Wallis & Wells v Pratt and Haynes [1911] AC 394 27
Waragowski
See Yeoman Credit v Waragowski
Ward v Bignall [1967] 1 QB 534 61
Watteau v Fenwick [1893] 1 QB 346 179, 182, 183, 184, 192,
193, 194, 203, 205
Waugh v Clifford [1982] 1 Ch 374 186, 195
Weigall & Co v Runciman & Co (1916) 85 LJ KB 1187 143, 179
Wickham Holdings v Brooke House Motors [1967] 1 WLR 295 74, 75
Wills & Sons Ltd v Brown & Sons (1922) 12 LlL Rep 292 215
Wimble Sons & Co v Rosenberg & Sons [1913] 3 KB 743 232, 246
Wings v Ellis [1985] AC 272 45, 46
Yeoman Credit v Waragowski [1961] 1 WLR 1124 113
Yonge v Toynbee [1910] 1 KB 215 150, 191


xvii
Carriage of Goods by
Sea Act 1992 237, 247
s 1(5) 257
s 2(1) 246
Civil Liability (Contributions)
Act 1978 151
Companies Act 1985 56
s 36 149, 154
s 365 55
Consumer Credit
Act 1974 12, 51, 74,
101, 105, 107,

108, 109, 110, 112,
114, 121, 123, 124,
131, 132, 133,
136, 137, 139
s 8 105
s 9(1) 106
s 11(1)(a)–(b) 98
s 12(a) 98
s 12(b) 98, 133, 134, 140
s 12(c) 140
s 16 107
s 21 108
s 39(1) 108
s 40 108
s 50 109
s 56 95, 99, 100, 131,
132, 133, 135, 138, 151
s 56(1)(b) 99, 102
s 56(2) 98, 99
s 57 98, 99
s 57(2)–(3) 97
s 59 98
s 60 95, 101, 107
s 61 95, 102, 107
s 62 95, 102, 107
s 62(1) 102
s 63 95, 102, 107
s 63(2) 102
s 64 95, 107
s 65 95, 108

s 65(2) 102
s 67 95, 97, 102, 103, 104
s 69 95, 98
s 69(2) 103
s 69(7) 103
s 70 95, 98
s 70(1) 98
s 70(3) 98
s 71 95, 98
s 72 95, 98, 103
s 72(9) 103
s 73 95, 98, 103
s 74 95
s 75 8, 12, 13, 14,
47, 52, 131, 132,
133, 134, 135, 136,
137, 138, 139, 140
s 75(2) 134
s 75(3) 138
s 76 111, 124, 125
s 87 111, 113, 124, 127, 129
s 88 127
s 88(2) 129
s 89 113
s 90 111, 114, 117, 121,
125, 128, 129
s 90(3) 118
s 91 121
s 92 114, 118, 128
s 94 116

s 95 114, 116, 123
s 98 111
s 99 96, 97, 98, 100,
111, 115, 116
s 100 100, 115
s 102 99
s 105 119
s 111 119
s 113 119, 120
s 127 102, 108, 119
TABLE OF STATUTES

xviii Table of Statutes
s 127(5) 102
s 129 111, 114, 115,
124, 125, 128
s 130(2) 114, 125
s 132 104
s 133 114
ss 135–36 102
s 173 124
s 173(3) 114
s 189 132
s 189(1) 99, 108, 119, 120
Consumer Protection
Act 1987 13, 14, 16, 20, 47, 48
Pt I 5, 13, 15, 17, 18, 19, 48, 135
ss 2–3 18
s 4 18
s 4(1)(f) 18, 19

s 5(2) 19
s 5(4) 18
s 6(4) 19
Contracts (Rights of
Third Parties) Act 1999 12, 14, 48
Enterprise Act 2002 4
Factors Act 1889
s 2(1) 71, 75, 76, 77, 78, 82
s 8 71, 81
s 9 71, 72, 73, 82
Fair Trading Act 1973
Pt III 4
Hire Purchase Act 1964 74, 75
Pt III 71, 72, 73, 74, 129
Marine Insurance Act 1906—
s 50(3) 254
Minors’ Contracts Act 1987
s 2 117
Misrepresentation Act 1967 31
s 2(1) 24, 35, 36
s 2(2) 24, 99
s 3 29
Power of Attorney Act 1971—
s 7 154
Powers of Criminal Courts
(Sentencing) Act 2000—
s 130 46
Prevention of Corruption
Act 1916—
s 1 146

Sale of Goods Act 1893 9, 10, 65,
232, 252
s 14(2) 22
Sale of Goods Act 1979 6, 9, 16, 64,
208, 213, 224, 226
s 1(2) 49
s 6 53
s 7 53, 63, 68
s 11(4) 85, 90, 92, 93
s 12 10, 13, 71, 72,
74, 75, 76, 79
s 13 7, 10, 13, 15, 31,
32, 38, 40, 90,
100, 229, 232, 234,
237, 244, 249, 252
s 13(3) 33
s 14 7, 10, 13, 14, 15,
21, 25, 27, 28,
29, 34, 38, 40,
50, 51, 134, 229,
231, 235, 244, 245
s 14(1) 39
s 14(2) 21, 22, 23, 24,
31, 33, 208, 209,
215, 231, 245
s 14(2A) 22, 33
s 14(2B) 22, 34
s 14(3) 23, 24, 27, 31,
34, 208, 209,
215, 231, 245

s 14(6) 134
s 15 7, 10, 13, 38
s 15A 38, 209, 215, 224,
230, 231, 232, 244,
245, 246, 249, 252, 257
s 16 53, 59, 61, 65, 66
s 17 10, 53, 59, 61, 65, 66
s 18 10, 53, 59, 61, 65, 66

Table of Statutes xix
s 19 10, 53, 61, 65, 66
s 20 10, 53, 59, 61, 63, 65, 66
s 20(1) 54, 66
s 20(2) 63, 65, 67, 68
s 20(3) 65
s 20(4) 7
s 20A 53, 61, 65, 66, 67
s 20B 53, 65, 66, 67
s 22 82
s 24 71, 81, 82, 83
s 25 71, 72, 73, 80, 82, 83
s 25(1) 55
s 30 15, 85, 224, 234
s 30(1) 90, 92, 237, 249
s 30(2) 41
s 30(2A) 237, 249
s 30(3) 41
s 30(5) 41
s 32(2) 245
s 32(3) 201, 220, 232, 239,

241, 244, 245,
246, 258, 259
s 35 15, 25, 36, 50,
85, 89, 90, 91,
92, 208, 210
s 35(2) 240
s 35(4) 90
s 35(5) 25
s 35A 15, 39, 41, 85, 92
s 35A(1)–(2) 92
s 49 65
s 50 85, 221, 258
s 50(3) 86, 88, 89, 212, 216, 217, 242
s 51 39, 85, 257
s 51(3) 88, 217, 250
s 53(3) 40
s 55 10
s 61(1) 59
Sale and Supply of Goods
Act 1994 41, 210, 252
Supply of Goods (Implied
Terms) Act 1973 7
s 9 100
Supply of Goods and
Services Act 1982 7, 15, 50
Pt II 50
s 4 49, 50, 139
s 13 50, 73, 139
Torts (Interference with
Goods) Act 1977 78

Trade Descriptions Act 1968 42, 43
s 1 43, 44
s 1(1)(a) 44, 45
s 1(1)(b) 43, 44, 45
s 11 43
s 14 42, 43, 45, 46
s 24 42, 43, 44, 46
s 24(1) 43
s 24(3) 43
s 25 43, 44
Unfair Contract Terms
Act 1977 10, 11, 14, 15,
26, 27, 28–30, 32,
37, 73, 143
s 3 29
s 8 29
s 11 29
s 12 28
Sched 2 29

xx
TABLE OF STATUTORY INSTRUMENTS
Commercial Agents (Council Directive) Regulations 1993
(SI 1993/3053) 141, 142, 154, 157, 158,
159, 160, 161, 162,
163, 164, 165, 167
regs 2–3 158
reg 4 158, 159
reg 7 159, 164
reg 7(1)(b) 165

reg 8 159, 160
reg 9 159
reg 10 159, 160
reg 11 159, 160, 164, 165
reg 12 159, 160
reg 15 161
regs 17–18 161
Consumer Protection (Cancellation of Contracts
Concluded away from Business Premises) Regulations 1987
(SI 1987/2117) 95, 97, 104
Consumer Protection (Distance Selling) Regulations 2000 (SI 2000/2334) 3, 4, 6
Consumer Transactions (Restrictions on Statements) Order 1976 (1976/1813) 32
Electronic Commerce (EC Directive) Regulations 2002 (SI 2002/2013) 5, 6
Sale and Supply of Goods Regulations 2002 (SI 2002/3045) 6, 13, 21, 50
reg 16 13
Stop Now Orders (EC Directive) Regulations 2001 (SI 2001/1422) 4
Unfair Terms in Consumer Contracts Regulations 1994 (SI 1994/3159) 11
Unfair Terms in Consumer Contracts Regulations
1999 (SI 1999/2083) 11, 14, 26, 27, 30

1
FOURTH EDITION
CHAPTER 1

GENERAL QUESTIONS
Introduction
This chapter contains two questions which are not confined to one particular
part of the syllabus but are broader. Such questions are often included in
examinations in order to test your knowledge of recent developments in the
subject or simply to give you an opportunity, which most questions in law

papers do not, to demonstrate a joined-up, wide knowledge of the syllabus.
The second question is a general question, such as one sometimes finds in
examinations, which invites the examinee to take an overview of the subject
and to do so from a particular perspective. For that type of question, one needs
to have a good knowledge of the whole area of sale of goods and related law.
Checklist
For the particular questions here, you will need to know:

• the common law and legislation relating to exclusion clauses and
contracts generally;
• the law of sale of goods, including recent developments;
• recent developments in consumer law;
• proposed or pending changes in the law, particularly European
initiatives.
Question 1
In recent times, a constant stream of Directives, initiatives and proposals
relating to consumer law has been emanating from the organs of the
European Community. The result is that businesses dealing with
consumers will incur considerable compliance and other costs, and they
need to keep under review their trading practices to ensure compliance
with a branch of the law that is changing quickly.
Explain and discuss.

2 Q & A on Commercial Law
Answer plan
This question is designed to test your knowledge of current developments in
consumer law. It is not quite a ‘write all you know about the topic’ type of
question. It clearly requires you to concentrate on laws which are created by
the European Community, and needs an examination of recent laws and also
proposed ones which have yet to be enacted. One way to deal with the

question is as follows. First, deal with European Directives on consumer law
which have recently been implemented. Secondly, deal with any recent
Directives which have yet to be implemented. Thirdly, deal with proposed
Directives and Regulations. It is a good idea to begin your answer by
identifying the main Directives and proposals which are to be discussed. It is
important, however, not just to write down all you know about the law or
proposed law in question. You must deal with the likely or possible costs to
business. That is explicitly asked for by the question.
Answer
There does indeed appear to be something near to a torrent of Directives and
other initiatives coming out of Brussels. This is no doubt largely due to the
fact that currently the development of consumer policy within the European
Community is a priority of the European Commission. Directives actually
issued in recent times include those on: Distance Selling (1997); Injunctions
(1998); Amendments to the Product Liability Directive (1999); Aspects of Sale
of Goods and Consumer Guarantees (1999); and E-Commerce (2000). Even
more recently, there have been consultations over:

• the extent to which differences between the national laws of contract
hinder or deter cross-border sales within the Community;
• proposed revisions to the Consumer Credit Directive;
• a proposed general duty to trade fairly;
• a proposed European Regulation on Sales Promotion.

This answer will begin by discussing Directives recently implemented in the
UK, and will then deal with the other developments just mentioned.
Distance Selling Directive
The Distance Selling Directive was implemented in the UK by the
Consumer Protection (Distance Selling) Regulations 2000. With very few

General Questions 3
exceptions, they apply to ‘distance contracts’. These are business-to-
consumer sales of goods or services where the supplier makes exclusive
use of distance communication up to and including when the contract is
made. Thus, sales made by mail order, telephone, fax and over the
internet are all within the definition, which basically catches all sales
where there is no face to face contact with the customer prior to and at
the time of the making of the contract. These Regulations introduced
significant improvements in the rights of consumers under distance
contracts. They require the giving of specified information to the
consumer before the contract is made, and the giving of specified
information (much the same as the pre-contract information) in durable
form—which really means in a written document or (it is probably
sufficiently durable) in an email sent to the consumer. The requirement
of pre-contract information requires businesses which sell by telephone
to be very careful to ensure that the information is given either by an
automated voice prior to the consumer being put through to a real
interactive human being or else by the latter person (or by a
combination of both). Equally, care must be taken by those who sell
goods or services to customers over the internet in the design of their
websites. It is thought that very many distance selling businesses are
still failing to comply with the Regulations. The rights given by the
Regulations also include a cooling-off period, during which the
consumer has the right to cancel a distance contract. The cooling-off
period is seven working days, where the first of the seven days is either
the day after the contract is made (in the case of services) or the day after
the goods are delivered (in the case of goods). Information about the
consumer’s right of cancellation is part of the specified information
which must also be given pre-contract and in durable form. Other rights
created by the Regulations include:

• a rule that, unless otherwise agreed, a distance contract must be
performed within 30 days;
• with a few exceptions, if, in relation to a distance contract, fraudulent use
is made of a payment card (whether a credit card, debit card or store
card), the card-holder is entitled to be reimbursed or to have his account
re-credited.

A further change effected by the Regulations relates to unsolicited goods sent
to a consumer. Whereas previously such goods were deemed to have been an
unconditional gift to the consumer if, after six months, they had not been
collected by the sender, now they are deemed immediately to have been an
unconditional gift. Beneficial as these new Regulations undoubtedly are to

4 Q & A on Commercial Law
consumers, there is no doubt that they pose significant compliance
requirements on businesses selling by distance contracts.
Injunctions Directive
This Directive was first implemented in UK law by the Stop Now Orders
(EC Directive) Regulations 2001. It has not, however, created any increase
in either compliance requirements or the costs imposed on business. This is
because it does not create any additional requirements for businesses.
Rather, it is aimed at securing better enforcement of requirements imposed
by other pieces of legislation. Thus, the Regulations give the Office of Fair
Trading (OFT) and other designated bodies (including enforcement bodies
in other Member States of the European Community) the right to issue
‘stop now’ orders to traders who have been found to be in breach of the
laws created to implement a whole range of European Directives aimed at
consumer protection. Those Directives include those on misleading
advertising, doorstep selling, consumer credit, package travel/holidays,

unfair contract terms, timeshares, distance selling and consumer
guarantees. Subsequently, in the UK, the Stop Now Orders (EC Directive)
Regulations 2001 will be superseded by the Enterprise Act 2002, when it is
brought into force. Whereas the Regulations (like the Injunctions Directive
itself) are confined to the enforcement of laws which enact one of the
Directives aimed at consumer protection, the Enterprise Act 2002
effectively extends that new enforcement regime to traders who, in the UK,
breach any law (domestic or European) designed to protect consumers. It
could simply be the law of contract. The new regime, when it is brought
into force, will thus remedy the shortcomings of the enforcement
machinery previously contained in Pt III of the Fair Trading Act 1973.
Under this, the OFT could not take enforcement action unless it could
establish the trader’s persistence in a course of conduct contrary to the law
and, even then, could not apply to the court for an order without first using
its best endeavours to secure from the trader an undertaking of future good
conduct. Better enforcement of the law in favour of consumers under these
provisions is welcomed and does not impose costs on business other than
on those who are not complying with existing law.
Product Liability Directive Amendment
The Product Liability Directive was implemented in the UK by Pt I of the
Consumer Protection Act 1987. It creates strict liability for personal injury