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Commercial Law: Proproducts Ltd case - Essay Example

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In the paper the first issue with the contracts that had been agreed on was that a lightning strike destroyed the silo that contained the pulp, and Proproducts insisted that the risk had already passed on to Triofeeds, so they were obligated to pay for the products. …
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Commercial Law: Proproducts Ltd case
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Download file to see previous pages The facts in this case can be summarized as follows, first, Proproducts are in the business of supplying animal feed ingredients to manufacturers of the feed, and agreed to sell the following three items. The first agreement was to sell 100 tonnes of citrus pulp to Triofeeds Ltd at a predetermined price of £100 per tonne. The contract made goes on to describe the location of the citrus pulp as being “in silo No 10 at our Wales depot”. Even though the contract was for the sale of 100 tonnes, the silo contained 200 tonnes of the pulp at the time the contract was made. The second contract made by Proproducts Ltd was for the sale of 50 tonnes of shredded maize kernels to Camden Ltd at £50 per tonne. The third contract included the sale of a two-year old lorry to Birmingham Motors Ltd for £10,000, with the buyer agreeing to pay the whole price upon delivery. The first two products in the contracts were subject to three main conditions; first, the goods were to be paid for in full 28 days after the delivery was made. The second condition was that, notwithstanding the delivery of the goods, the seller would retain the title to the goods until full payment had been received, subject to the first condition. The last condition was that, if the buyer mixed any of the products with any other product, the seller would own the title to the resulting mixture until payment for the first product is received in full, also subject to the first condition. ...
Later, Camden Ltd went into insolvency liquidation with the price of the shredded maize still outstanding. The third issue in the case involved the lorry sold to Birmingham Motors Ltd, where the buyer paid the full price immediately after the delivery was made. However, the buyer has just discovered n engine fault on the lorry that requires a full replacement of the engine at a cost of ?5,000. It is essential to determine precisely when property (ownership) and risk in the goods passes to the buyer. The rules on the passing of property are different for specific goods and unascertained goods. Risk often passes to the buyer with property, but this is not always the case. The parties are generally free to agree when property and risk passes to the buyer. In the absence of such agreement, the SGA has certain ‘Rules’ that will apply. Which party bears the legal risk in cases where the goods are destroyed or in the event of insolvency will determine who suffers the loss. Discussion Rule The three contracts stipulated above are each subject to rules of law, with the main rules being the contact of sae and the effect of the contract. The first concerns the passing of risk from the seller to the buyer, the second being the performance of the contract. In this case, the performance of the contract relates to delivery of the goods in the stated quantity and condition and the party that bears the burden of the goods in case the goods are damaged. The third rule concerns the rights of the unpaid seller in case the buyer breaches the contract of the sale of goods. Analysis The sale of goods act describes a contract for a sale of goods as ...Download file to see next pagesRead More
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