Diagnostic test

. Where will you find the definition of a contract of sale of goods?

Common law

Section 2(1) of the Sale of Goods Act 1979

It has not been specifically defined

Aldridge v Johnson (1857) 7 E&B 885

. With a contract of sale, when will the property in the goods be transferred from the seller to the buyer?

As soon as the goods have been paid for

As soon as the goods have been delivered

As soon as the contract is made

As soon as possible

. Which one of the following statements is correct?

The terms implied in the Sale of Goods Act 1979 apply only where the seller sells the goods in the course of a business.

The terms implied in the Sale of Goods Act 1979 apply irrespective of whether the seller sells the goods in the course of a business.

Sections 14(2) and (3) apply only where the seller sells the goods in the course of a business. Sections 12, 13 and 15 apply irrespective of the status of the seller.

The terms implied in the Sale of Goods Act 1979 apply only where the buyer is a consumer.

. The seller must either own the goods or at least acquire title in them before transferring them to the buyer. True or False?

True

False

It depends on whether or not the goods are 'specific' or 'unascertained'

. When do goods become ascertained?

As soon as the contract is made

When the goods are identified as the goods to be used in the performance of the contract

As soon as they have been delivered to the buyer

As soon as the buyer pays for them

. The rules relating to which party bears the risk in the goods depends on whether the buyer deals as a consumer. Is this statement correct?

Yes

No

. Why did the retention of title clause in Hendy Lennox (Industrial Engines) Ltd v Grahame Puttick Ltd [1984] 1 WLR 485 succeed?

Because the court felt that Re Peachdart Ltd [1984] Ch 131 had been wrongly decided

Because there was no chance of the buyer paying for the goods as it was insolvent

Because the seller had registered the clause as a charge

Because the finished items could, with relative ease, be dismantled and the goods sold easily identified as those of the seller

. Why are retention of title clauses not generally regarded as security interests, which are void if not registered?

Because they are, in the main, not security interests and do not need to be registered

Because security interests never need registering

Because the Court of Appeal said so in Aluminium Industrie Vaassen BV v Romalpa Aluminium Ltd [1976] 1 WLR 676

They are security interests and are void if not registered

. What is the difference between exclusion, limitation, and exemption clauses?

An exclusion clause is where the party to the contract seeks to exclude all liability for certain breaches of the contract. A limitation clause is where a party to the contract seeks to limit his liability for certain breaches of the contract. An exemption clause is the term used to describe both exclusion and limitation clauses.

An exclusion clause is where the party to the contract seeks to exclude all liability for certain breaches of the contract. A limitation clause is where a party to the contract seeks to limit his liability for certain breaches of the contract. An exemption clause is the term used where either an exclusion or limitation clause has been upheld by the court.

They are all the same and the terms are entirely interchangeable.

They are all the same but different statutes use different terms.

. Which one of the following statements is correct?

The way in which a court will construe both limitation and exclusion clauses will depend on the seriousness of the breach and the extent of the loss sustained.

The way in which a court will construe both limitation and exclusion clauses will depend on the seriousness of the breach without regard to the extent of the loss sustained.

A clause which limits liability will not be construed as strictly as one which excludes liability altogether.

A limitation clause will be construed just as strictly as an exclusion clause.

. As section 7 of the Sale of Goods Act 1979 is similar to the common-law rules on frustration, does the Law Reform (Frustrated Contracts) Act 1943 apply to such cases?

Yes

Depends on the circumstances of the case

No

Only if the contract is held to be frustrated

. Which one of the following statements is correct?

Sections 6 and 7 of the Sale of Goods Act 1979 apply only in cases of specific goods.

Sections 6 and 7 of the Sale of Goods Act 1979 apply only where the seller sells the goods in the course of a business.

Section 6 of the Sale of Goods Act 1979 applies only in cases of specific goods. There is no such restriction on section 7.

Section 7 of the Sale of Goods Act 1979 applies only in cases of specific goods. There is no such restriction on section 6.

. Which one of the following statements best reflects the correct position when an exception to the nemo dat principle applies?

The goods revert to the original owner.

The goods are sold, and the proceeds divided between all innocent parties.

The original owner of the goods loses his title in favour of the purchaser who would have lost out had the exception not applied.

The court decides.

. Does section 21(1) of the Sale of Goods Act 1979 cover sales and/or agreements to sell?

It depends on the circumstances of the case

Both sales and agreements to sell

Only agreements to sell

Only sales

. Where is the correct place of delivery of the goods?

Wherever the contract specifies

Wherever is reasonable in all of the circumstances of the case

Unless agreed otherwise, the buyer's place of business if he has one, and if not, his residence. But, if the contract is for the sale of specific goods, which to the knowledge of the parties when the contract is made are in some other place, then that place is the place of delivery.

Unless agreed otherwise, the seller's place of business if he has one, and if not, his residence. But, if the contract is for the sale of specific goods, which to the knowledge of the parties when the contract is made are in some other place, then that place is the place of delivery.

. What may a buyer do if the seller delivers a quantity of goods less than he contracted to sell?

Either reject them or accept the short delivery and pay pro-rata for the goods that have been delivered.

Either reject or accept them. If he accepts them, he must pay the full contract price (including the goods that were not delivered).

He must reject them.

He must accept them.

. Which one of the following situations does not reflect the position of an unpaid seller?

When the seller extends credit to the buyer but the buyer does not pay by the time allowed.

When the whole of the price has not been paid.

When the whole of the price has not been tendered.

When a negotiable instrument has been received as conditional payment and the condition on which it was received has not been fulfilled by reason of the dishonour of the instrument.

. Which one of the following is not a right of the unpaid seller against the goods?

Where the property in the goods has not passed to the buyer, a right of withholding delivery similar to and co-extensive with his rights of lien or retention and stoppage in transit where the property has passed to the buyer.

A right of stopping the goods in transit after the seller has parted with the possession of them.

A right of resale, limited by the Sale of Goods Act 1979.

A lien on the goods or right to retain them for the price while the seller is in possession of them.

. In what circumstances will section 48A of the Sale of Goods Act 1979 apply?

When the goods do not conform to the contract of sale within the first six months following delivery.

When the goods do not conform to the contract of sale at the time of delivery.

When the buyer deals as consumer and the goods do not conform to the contract of sale within the first 6 months following delivery.

When the buyer deals as consumer and the goods do not conform to the contract of sale at the time of delivery.

. In relation to Question 4, when will the goods not conform to the contract of sale?

Whenever they are proved to be defective.

If there is, in relation to the goods, a breach of an express term of the contract or a term implied by sections 12, 13, 14 or 15 of the Sale of Goods Act 1979.

If there is, in relation to the goods, a breach of an express term of the contract or a term implied by sections 13, 14 or 15 of the Sale of Goods Act 1979.

If there is, in relation to the goods, a breach of a term implied by sections 13, 14 or 15 of the Sale of Goods Act 1979.

. Why was the agreement in Dimond v Lovell [2002] 1 AC 384 held not to be a consumer hire agreement?

Because the court held that the hire element of the agreement was unfair

Because the court held that the entire agreement was unfair

Because the agreement was not in writing

A consumer hire agreement must be capable of subsisting for more than three months. The agreement in Dimond v Lovell stated that it could not last for more than 28 days

. Which one of the following is an exception to the rule that an exempt agreement is not regulated by the Consumer Credit Act?

Where the court has the power to reopen an exempt consumer credit agreement in the event that it gives rise to an unfair relationship between the creditor and the debtor.

Where the court has the power to reopen an exempt consumer credit agreement where one of the parties is a minor.

Where the court has the power to reopen an exempt consumer credit agreement where the creditor misrepresented the true rate of interest.

Where the court has the power to reopen an exempt consumer credit agreement where the creditor and the debtor have been advised by the same solicitor.

. When can an agent's authority be implied?

When it is inferred on an objective basis

When it is inferred from the circumstances of the case

When it is inferred from the conduct of the third party and the circumstances of the case

When it is inferred from the conduct of the parties and the circumstances of the case

. There was no question of actual authority arising in Watteau v Fenwick [1893] 1 QB 346 because the agent had been forbidden to do the act in question. But why was there no apparent authority?

Because the principal has told the third party not to deal with the agent

Because the principal had terminated the agency agreement

Because neither the principal (nor anyone authorised by him) had represented to the third party that the agent had authority to act on his behalf

. In the case of a disclosed agency, can the agent sue or be sued on the contract made with the third party?

Yes

No

Not unless the contract itself or the circumstances show that the agent has accepted personal liability

. Does an agent have the right to be remunerated by the principal?

Yes, provided there is a term in the agency agreement to this effect and the agent acts within his authority (or the principal has ratified an agent's unlawful act).

Yes, provided there is a term in the agency agreement to this effect.

Yes, even in the absence of a term in the agency agreement to this effect.

Diagnostic test

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