Q2 -JULY 2015 RESIT-COMMERCIAL TRANSACTIONS

3(a)

In the Absence of any special circumstances the Sale of Goods Act states that where there is a contract for the sale of unascertained goods property will pass when the goods are ascertained[1]. Property in the sale of specific goods shall pass when the parties intend it to pass[2]. In determining intention property in the sale of specific goods in a deliverable state passes when the contract is made[3]. If the goods are not in a deliverable state property will not pass when they are put in a deliverable state[4]. If the goods must be weighed or measured property will not pass until this is done and the buyer has notice[5]. It must be noted that risk passes with property.

3(b)

Sam approached Newstar Motors, Benjamin showed him a new truck with superior features, he was impressed with this and ordered 8 of them. From this facts we infer that the buyer in ordering the 8 trucks relied on the sellers skill and judgement plus the sample shown. When goods are sold by sample then the delivered article must match the sample. Four weeks later News-star Motors delivered 8 of the Old model trucks as such they did not match the sample and are therefore at breach prima facie.

The Buyer-Mr Sam has the following rights;

1.      Treat breach as a breach of a condition then reject the goods and repudiate the contract, the buyer has the discretion to treat the breach as a breach of warranty or condition. Each have different consequences.

2.      Decide to treat the breach as a warranty, accept the goods and sue for damages, when a warranty is breached damages are the only remedy.

3.      Accept goods and set up a breach of warranty as a defense to an action by seller for the price. This is if he accepts the goods and refuses to pay the original price.

4.      If he had paid, action for money paid on consideration which has failed

5.      Reject goods and set up an action for specific performance. Specific performance is an equitable remedy.

The Seller in breach has the following remedies depending on the circumstances of the case;

1.      If buyer accepts goods but doesn’t pay action for the price without more,

2.      If the buyer rejects, action for damages for non acceptance

Obligations;

1.      Take the old Act-ross trucks and deliver the new ones.

2.      Refund the buyer, pay for damages and repudiate the contract
Negotiate the buyer to accept the trucks at a lower price

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[1] Section 18

[2] Section 19

[3] Section 20(a)

[4] Section 20(b)

[5] Section 20(c)