Chapter 12 Self-test questions

Boilerplate clauses

. A local mill regularly sells wheat on to the town's bakery. Their relationship is governed by an ongoing sales contract in which the mill has inserted a retention of title clause. The clause states that legal title to the goods will only be transferred to the bakery once full payment has been received by the mill. Sainsbury's opens a new supermarket in the town and the bakery goes out of business with large debts still owing to the mill. Will the mill be entitled to recover these debts if the wheat is in the bakery and has not been used by the bakery in the course of its business?

. Two companies, X and Y, have a longstanding contract together. The contract contains a 'force majeure' clause which lists in its description of events that may trigger the operation of the clause: "an act of God, war, strikes, civil commotions, lock-out, fire, flood, drought, or any other cause beyond our control". Nearing the end of an important construction agreement, Company X's employees go on strike demanding their unpaid wages for the last two months, plus the 10% increase promised for all their overtime. Company X is unable to pay and demands the termination of the contract on the basis of the force majeure clause. Does Company X have the right to do this?

. What is the name given to the type of clause that will tell you whether or not the contract between the parties is governed by English law?

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