Commercial Law Problem Question - Essay Example

Sally obtained only 300 bulbs as her supplier could not deliver the full consignment to cover Billy’s order. She has a right to recover damages from her supplier, if she had asked for supply of a particular number of bulbs. Sally had agreed to sell future goods2 to Billy. Sally had made delivery of 300 out of the 400 bulbs that Billy had agreed to buy. Billy was within his rights to reject the entire delivery3. Billy is entitled to damages for non delivery of goods.4 He is also entitled to seek specific performance from Sally.

5 When does the Property Pass In Kulkarni v Manor Credit6 the issue was the time when property in the car passed to Kulkarni. The car, subject to a hire-purchase agreement was fitted with license plates after Kulkarni entered into contract with the hire-purchaser. It was held that the car was not in a deliverable stage at that time and hence property in it passed after it came into a deliverable stage. S. 19 and 20 of SOGO provide for the passing of property in goods. As per rule 5 (1) of Section 20, property in future goods by description passes when they are appropriated by the seller with assent of buyer and such assent can be after the appropriation is made.

The property in the bulbs passed to Billy when the 400 bulbs were appropriated by Sally for delivery to Billy. Sally’s Legal Position She would have had a right to sue her supplier for the non delivery of specified number of goods. However she had accepted delivery of wrong quantity and she is not entitled to that. Sally has not yet delivered the goods to Clive. She can to withhold the goods from Clive and exercise a right of lien over the goods.7 However, she will not be entitled to sell the goods to Danny, as the property in the bulbs has passed to Clive when she legally or otherwise apportioned the bulbs to Clive and arranged for their delivery.

Clive derives an interest in the goods after this. In Re Wait8 the seller went bankrupt after he sold the goods. The buyer claimed an equitable interest to insure that he did not lose both his money and goods to the trustees of seller in bankruptcy. Court of Appeal held that property in the goods had not passed to the buyer as he had only paid for a part of the bulk. In Re Goldcorp Exchange9 the receivers of Goldcorp Exchange argued that the title in the bullion did not pass to the creditors of the company because the goods (bullion) was not ascertained.

In the instant case, the goods were ascertained as Clive had seen the bulbs and had agreed with Sally to purchase the same. In the market overt principle, when the goods are openly sold in a shop or a market in Hong Kong, the buyer acquires a good title to the goods, provided he buys them without notice of any defect in title of the seller.10 However, the courts have ruled that the market overt principle can not be applied in all cases. In Au Muk Shun v Choi Chuen Yau11 the issue was sale of 43 tons of pig iron.

It was held that 43 tons of pig iron could not be considered to be on sale in the retail market. Remedies available to Billy It was duty of Sally to deliver the bulbs to Billy on 18 February as she had agreed to. So Billy is entitled to damages for non delivery of goods. The measure of his damages will be the estimated loss resulting from Sally’s breach of contract. In the instant case, Sally had agreed to sell the bulbs for $48,000. Billy bought the bulbs from Edward at $60,000 when