Commercial Law Report

Examiners’ reports 2018
LA2017 Commercial law – Zone A
Introduction
This document sets out the Chief Examiner’s report for the examination paper in
Commercial law Zone A and begins some general observations on the examination
scripts as a whole before considering each examination question in turn.
Many candidates answered the questions well. However, across a number of
scripts, two common difficulties were exhibited. One was a very fundamental one:
an inability to recognise that certain areas of law were involved in resolving the
hypothetical problem. For example, in relation to Questions 4 and 5, many
candidates failed to recognise that these questions concerned the Unfair Contract
Terms Act 1977 and retention of clauses respectively, despite both questions
clearly flagging these issues and, in the case of Question 5, raising no other issues.
A second difficulty was presented by those candidates who did not carefully
consider the facts given in a problem question or contention set out in an essay
question. As a result, their answers often comprised a general discussion of a
particular area of law without any attempt to apply this law towards the resolution of
the problem or an analysis of the essay question. An answer that offers little more
than an exposition of potentially relevant law will invariably be rewarded with a
relatively low mark because the candidate is demonstrating only knowledge of the
law and not the ability to utilise that knowledge.
It is extremely important that candidates apply the law to the issues presented in a
problem. Candidates should consider the principles developed within the relevant
cases and the reasons behind these particular principles. These must then be
applied to the problem to resolve it. In many cases, answers to problem questions
amounted to little more than an outline of some relevant case law, dutifully recorded
in the answer booklet. The reason for this is probably two-fold: first, it is often hard
for intermediate candidates to discern the relevant from the irrelevant and caution
encourages a complete list of cases to ensure that none is omitted; secondly, it is
tempting to produce a lengthy answer in the hope that the examiner will be
impressed by the breadth of knowledge acquired by the candidate. A successful
answer identifies the issues and applies the relevant law to them. Such an answer
displays not only knowledge but also understanding of the subject being examined.
The recitation and discussion of cases that are irrelevant to the question serve to
highlight a candidate’s uncertainty as to which issues are involved in the question.
In other instances, some answers appeared chaotic, as if the candidate had hurried
into an issue without full consideration of the question as a whole. Candidates who
prepare a careful plan of their answer before writing it in full will find that the time
spent in making such a plan is repaid by the clarity of the final answer. Among other
things, it allows candidates to see the interaction of issues before they have
committed themselves to one course or another. It should also prevent candidates
from omitting points they had intended to discuss.
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Many candidates struggled to answer essay questions thoroughly. Their attempts
were often, and unfortunately, confined to the recitation of everything they knew
about a particular subject. In so doing, such candidates often presented a great
deal of material; this presentation was marred by an apparent inability to discern the
relevant from the irrelevant and a lack of analysis as to the underlying nature of the
question. In attempting to answer essay questions, candidates needed to consider
the exact nature of the question asked. At times, this can be very broad, allowing
candidates to draw upon particular areas covered in this course. The information
drawn up, needs to be employed as support for the arguments made in attempting
to answer the question. Candidates should resist the temptation to write everything
they know about a particular area of law and focus on what is relevant to answering
the question set. Candidates must consider whether or not they are addressing their
answer to the question asked. A part of this answer will, necessarily, involve legal
analysis. In other instances, candidates were unable to answer the question asked
in an essay question. They chose, instead, to adapt the question to a topic that they
did know something about. Such an attempt is not, however, an answer to the
question asked. It also leaves the examiners with the impression that the students
are unable to answer four questions from the examination paper.
A trend even move evident this year than in previous years were students reciting
pre-prepared answers to questions, invariably with very poor results. It is imperative
that all answers given are not only the work of the individual student but also, once
again, a response to question set.
Finally, many candidates suffered from an inability to budget their time. In these
instances two or three good answers would be followed by a weak (and in some
cases non-existent) effort to answer the balance of the paper.
It goes without saying that it is difficult to succeed where all of a candidate’s efforts
are concentrated on two or three answers when the examination paper requires
four questions to be answered. A number of candidates did not appear to have
sufficient knowledge of commercial law to attempt four questions. Lastly, the
examiners in commercial law wish to emphasise the importance of writing the
answers clearly. It is difficult, and sometimes impossible, to assess the illegible.
Comments on specific questions

Question 1
‘A theme that runs through our law of contract is that the reasonable
expectations of honest men must be protected.’ Per Steyn J First Energy Ltd
v Hungarian International Bank [1993] BCC 533.
Assess the extent to which English commercial law embodies this theme.
General remarks
The purpose of this question is to allow candidates to construct a wide range of
answers, using almost any aspect of the law that they have studied to consider
whether there is an underlying ‘ethos’ of commercial law and whether it accurately
identified by the quotation used in this question. It is also an opportunity to
demonstrate an understanding of material beyond the bounds of the syllabus.
However, with this freedom in terms of content comes the requirement that students
must use the material they offer up to address the question, not merely to describe
a range of potentially relevant material. In general, answers to this question scored
relatively low marks because they tended to reprise the description of law used in
another question without providing any explanation as to its relevance to this
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question. Alternatively, they offered a discussion that was to varying degrees non-
legal offering generalised remarks with few clear references to support them.
Law cases, reports and other references the examiners would expect you to use
Candidates could have legitimately referred to almost any area of the syllabus
providing they were able to explain how it served to prove or disprove the
contention raised by this question. However, cases and commentary that explicitly
consider the over-arching function of commercial law would be particularly useful
here.
Common errors
Failing to engage with the contention and instead describing without any analysis a
particular area of law was a common error.
A good answer to this question would…
have a clear and purposeful structure, feature an increasingly prominent critical
narrative drawing in (instead of describing) an ever wider range of evidence but
evidence that is used sparingly and effectively, showing an increasing degree of
discernment and command. An answer in this range would be very much
addressed to the question. At the higher end of the range, drawing evidence from
beyond the syllabus, including recently decided cases and extensive extra-judicial
writing on this topic. Credit would be given for drawing on less obvious (but
credible) examples that support a candidate’s argument.
The very best answers would demonstrate real command of the material and the
ability to pinpoint a range of examples and bring them together into a compelling
critical account, which demonstrates a strong ability to structure and craft a
response in a short period of time.
Poor answers to this question…
tended to talk in general terms with few or no references to law, or about the
general purpose or history of commercial law or describe a particular area of law
making no effort to relate it to the question, let alone offer an analysis of the
contention itself.
Student extract
The protection of the reasonable expectations of honest men is a theme that
runs through commercial law. It can be seen in the tension between
protecting the rights of property owners and buyer who buys in good faith for
value without notice of another person’s interest in the goods. And perhaps it
only makes sense that where transfers for value are concerned, the law will
necessarily have to walk a tight rope to ensure that the interests of both
parties are well served. One area of law where this can be analysed is where
passing of property and risk is concerned. Observing the mechanics of these
aspects of commercial law allows us to see that there is in fact a seemingly
constant threat that operators may find themselves in difficulty, precisely
because the law is seeking to serve both masters at the same time.
Comments on extract
This is the introduction to an essay which was ultimately awarded a mid-2:2 mark.
The latter part of the essay managed to sustain greater focus and depth than that
seen here. However, this passage is illustrative of a common problem seen when
answering this and other essay questions: an inability to be clear and direct. The
introduction here introduces two possible topics, both of which would provide ample
illustrations to help construct a good answer to this question but rather than focus
on one, a second is introduced and there is no discussion of how an argument will
be developed. Instead, what we see is a lot of writing that sounds good but when
we read it more closely does not tell us a great deal about the argument that the
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candidate intends to construct and what this will tell us. An introduction is an
opportunity to set out the argument you are going to write. It is an opportunity to set
out in brief your thought process and show that you ‘get’ the question and how to
respond to it. Do not feel that you cannot be clear and direct if you are also being
accurate and detailed at the same time. Simply throwing more potentially relevant
material in often gives a sense that a candidate is not confident or cannot discern
between what is and is not relevant.
Question 2
Paulina owns a garage business which services, repairs and occasionally
sells cars and vans.
Due to other commitments, Paulina is unable to run the business full-time and
appoints Aaron, who has worked for her for five years as one of three
mechanics, to the role of ‘garage manager’. Aaron is given a badge stating his
new title and a new uniform to distinguish him from other staff. Paulina tells
him only to ‘keep things ticking over for me’.
Aaron has entered into the following agreements:
a) A contract for a new fault diagnosis system at a cost of £2,500; and
b) A contract to refurbish the customer waiting area for a cost of
£5,000; and
c) A contract with a tyre manufacturer under which their usual price is
discounted by 20% subject to a minimum order of £5,000.
Paulina has now learned of these agreements. She feels that the first two
contracts are unaffordable and does not wish to be bound by them.
Advise Paulina.
General remarks
This question was attempted by a substantial number of candidates, some of whom
produced very effective and well-informed answers centred around a capable
analysis of the problem. A majority of answers, however, tended towards providing
a description of the law of agency that was by degrees more or less relevant to the
question, often failing to provide anything that could really be regarded as analysis
of the problem or a solution to it. As always with any problem question, the purpose
of the exercise is not to simply identify some potentially relevant law but
demonstrate an ability to use the law to solve a problem. Access to better marks is
only possible where there is a clear attempt to at least apply the maw.
Ireland v Livingston
Freeman & Lockyer v Buckhurst Park Properties
Waugh v Clifford
First Energy v Hungarian International Bank
RCJ v Lanstar
Sino Channel Asia Ltd v Dana Shipping & Trading Pte Singapore
Bolton Partners v Lambert
Suncorp Insurance v Milano Assicurazioni
Common errors
Most candidates identified that this question required a consideration in each
instance of the whether or not there was authority for particular action and what
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form that authority took. There were few errors, therefore, in one sense but too
often candidates sought to argue agency of necessity and agency on the basis of
Watteau v Fenwick when that was clearly not present. Some candidates
misinterpreted this as a SGA implied terms problem, which it is not, and if it were,
would require, in some cases the authority of the agent to be established in any
case.
identify that the challenge in this question was not just about the presence and type
of authority but the exact scope of A’s authority and at what point any actual
authority gives way to apparent authority. A good answer would have been centred
around the latter issue in particular.
A good answer would have identified that as a general manager, A’s actual implied
authority could reasonably extend to the purchase of goods for the carrying on of
the core business but would try to temper this with the express instructions given to
A, offering some meaningful analysis of the words used but appreciating that this
may give rise to some potentially insoluble uncertainty as to A’s actual authority.
However, this uncertainty can be resolved with reference to apparent authority
(considering both actual and implied but contemplating whether the latter may be
impossible) and ratification. A good answer would sequence their argument in this
way, discussing actual authority before setting and applying the rules of apparent
authority (in respect of the fault diagnosis system and refurbishment works) and
ratification respectively.
A very good answer would engage actively with the issue as to what exactly was
being represented about A’s authority with reference to recent cases such as RCJ v
Lanstar and Sino Channel Asia Ltd v Dana Shipping & Trading Pte Singapore, all of
which deal with agents with very wide ranging apparent authority.
tended to provide a vague outline of the concept of authority and could not describe
or differentiate between the different instances of authority, or identify which
instance would be most relevant in each scenario. Poor answers tended to fall back
on Watteau v Fenwick and agency of necessity, demonstrating a poor grasp of
both.
Question 3
In Watteau v Fenwick [1893] 1 QB 346, Wills J said: ‘once it is established that
the defendant was the real principal, the ordinary doctrine as to principal and
agent applies — that the principal is liable for all the acts of the agent which
are within the authority usually confided to an agent of that character.’
Wills J’s decision is often criticised, but the law has nevertheless effectively
reached this position.
Discuss.
General remarks
At one level, this was a relatively straightforward question, inviting students to
demonstrate knowledge of Watteau v Fenwick. At another, it was an opportunity for
students to consider whether the concept of ‘usual authority’ seemingly articulated
in Watteau coincides with that of ‘usual authority’ of an agent with apparent
authority and whether the mere appearance of an agent that might be argued to be
the basis of the decisions in First Energy is really distinguishable.
Candidates should have discussed Watteau in detail and case law that has
questioned its value as an authority, particularly Sign-o-Lite and The Rhodian River.
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For the second strand of the question, discussion of Freeman v Lockyer, The
Rafaella, The Ocean Frost and First Energy could all be relevant.
Common errors
There were few common errors per se but most candidates used this question an
opportunity to reprise the well-rehearsed discussions on Watteau and did not
consider any other issues.
introduce Watteau and try to pin down what exactly the ratio is, noting it has been
questioned if there is one, before continuing to offer some critique of it. The
candidate would then move to consider whether or not the law in relation to
apparent authority had moved to a point where it could be argued that even the
slightest appearance of authority, could be regarded as being sufficient to hold the
principal to the agent’s bargain.
offered little more than a discussion of the facts of Watteau.
Question 4
Solent Ltd is a manufacturer of screws and agreed to sell to Brunswick Ltd
50,000 M5 precision machine screws, tolerance (length) not more than 0.5 mm
for £100,000 (including a 20 % discount). The screws were despatched from
Solent’s warehouse in Manchester for delivery to Brunswick in London.
The contract was made on Solent’s written standard terms which include the
following clauses:
a) The Seller excludes liability for any and all implied terms or
warranties as to the quality, fitness, durability or suitability of the
goods supplied.
b) The Buyer will inspect the goods and notify any defects to the Seller
within two working days.
c) The Seller will replace any defective goods on a like-for-like basis
without charge (Buyer liable for all carriage costs). No replacement
goods will be offered where defects are notified more than five
working days after delivery.
Solent’s standard terms contain no other express terms as to quality and
fitness.
The parties have not previously contracted with each other. Solent did not
draw any particular terms to the attention of Brunswick. Both are sizeable,
specialist businesses dealing regularly in goods of this type.
Brunswick inspected the screws eight working days after receiving them from
Solent. Half of the screws are longer than specified by more than 1 mm and
Brunswick wish to reject the entire order.
Advise Brunswick.
General remarks
This was a question superficially concerning the implied terms of the SGA,
however, a closer reading should have revealed that that was a secondary issue
sitting behind the first issue of whether those terms were effectively excluded by the
exclusion clause noted in the question. Were it held reasonable, the implied terms
would be of no consequence. A majority of candidates did appreciate the
significance of the exclusion clause and structured their answers accordingly.
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Candidates attempting this question should have made reference initially to the
Unfair Contract Terms Act 1977. Attempts to exclude the SGA implied terms are
addressed by s.6, from which a discussion of s.11 and Sch. 2 are absolutely
indispensable. The application of s.11/Sch.2 should have been informed by at least
some case law.
If it were found that on balance the exclusion clause would not hold, candidates
could then turn to ss.13 and 14(2) of the SGA and a range of case law on the
implied terms. In this case, s.13 would be sufficient.
In relation to s.13, Ashington Piggeries and Harlingdon Leinster are especially
important as they provide guidance on the meaning of the implied term.
In relation to s.14(2), Stevenson v Rogers and a range of case law elaborating on
the meaning of the criteria in s.14(2C) should be used. Especially that in relation to
freedom from minor defects (Rogers v Parish, Bernstein v Pamson Motors and
Millars v Turpie). N.B. there are many others.
Finally, on s.35(4), Clegg v Anderson and, potentially, Jones v Gallagher.
Common errors
The most common error in this question was either completely disregarding the
UCTA issue or relegating it to one of minor importance, dedicating no real time to
discussion of it. Discussion of it tended to be limited to simple assertions that the
term would or would not be reasonable based on little or no case law and analysis.
Many candidates argued a term excluding liability for the SGA implied terms was
caught by s.3 of the UCTA. It is, to some extent a moot point, whether it could be
argued under s.3 but in almost all cases this was simply an error, as there is no
apparent familiarity with s.6 which explicitly deals with exclusions of the SGA
implied terms. Most answers should no knowledge of the Sch.1 criteria or UCTA
case law.
primarily address the UCTA issue, show an understanding that this was the primary
issue in the case and work methodically through the requirements picking up on a
number of points made in the question that map to Sch.2 criteria. A good answer
would appreciate the case law here provides a guide and use it as such, allowing
their own analysis to determine the outcome of their UCTA discussion. Finally, a
good answer would offer a concise analysis of the SGA implied terms points,
focusing on s.13 and considering whether the buyer could reject the goods under
s.35.
would disregard the UCTA issue and address this as an SGA issue, offering a very
simplistic analysis of the problem or merely non-legal analysis of whether goods
were satisfactory or not.
Student extract
According to the facts, Brunswick inspected the screws eight working days
after delivery. Half of the screws are longer than the specified length. The
parties to the contract are dealing in the course of a business (Stevenson v
Rogers). Under s.13 SGA where there is contract for ‘sale be description’,
there is an implied term that the goods will correspond with the description.
S.14 also implies a term that when the seller sells goods in the course of a
business, there is an implied term that the goods will be of a satisfactory
quality under s.14(2A). The goods are of satisfactory quality if they meet the
standard of a reasonable person, taking account of any description of the
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goods. S.14(2B) dictates that the quality shall include fitness for all purposes,
freedom from minor defects and durability.
Comments on extract
This answer eventually went on to be awarded a low 2:2 as a result of a much
improved second half but the introduction shown here displays a number of
common errors. First of all, the candidate fails to identify what the issue is. Not only
is this important to show that you can effectively analyse the question in a short
amount of time, but it is also important in helping to structure the work. There are
two issues in this question, which should be dealt with in a logical sequence. First,
whether or not the implied terms are effectively excluded, and, if they are not,
whether there is a breach (and of which term). As a result of not having a clear
introduction, the answer immediately leaps into a discussion of the less important
issue. Instead of providing a clear outline of the law, the candidate offers a precis of
the statute, which is not wholly accurate and confuses ss.13 and 14. Reproducing
the statute is seldom helpful, especially when it is accompanied by little analysis. A
better answer here would have first dealt with UCTA and when dealing with the
SGA, have seen that s.13 was potentially more important, provided a brief outline of
the provision then focused on its application, leaving s.14 to be dealt with
separately, showing not only a greater ability to construct an effective answer but
avoiding, as here, the conflation of the two provisions.
Question 5
Lusso is a supplier of coffee and coffee machines. Its standard written terms
of business contain the following clause:
The seller hereby reserves title to: all goods supplied under this
contract; all goods mixed with, manufactured or derived from or
incorporating goods supplied under this contract; the proceeds of any
sale or disposition of the goods supplied under this contract, which it
is agreed are made by the Buyer as fiduciary agent of the Seller.
Lusso contracted to sell to Bragga Ltd eight 25 kg sacks of raw coffee beans
and the goods were delivered to Bragga.
Four of the 25 kg sacks of coffee beans were roasted. The roasted beans were
put back into the sacks in which they were originally supplied. The sacks
identify that they were supplied by Lusso.
The other four 25 kg bags were mixed with 100 kg of beans of lower quality
supplied by two other suppliers, roasted, ground and placed in sealed 5 kg
bags ready for sale. Ten of the 5 kg bags have been sold and the £500
proceeds of sale are now in Bragga’s only bank account.
Bragga are now in insolvent liquidation. Lusso’s invoices for the goods
remain unpaid. Lusso are now seeking advice on the enforceability of their
retention of title clause.
Advise Lusso.
General remarks
This popular question requires candidates to consider the extent to which a
retention of title (RoT) clause is valid. This question was attempted by a substantial
number of candidates. The key to success was to deal carefully with each point and
consider just how far the clause itself sought to ‘reach’ and whether or not that
exceeded what was generally permitted by the case law.
Candidates should reference Romalpa as the founding case on RoT, consider the
general principles on the limitation on the seller’s property interested articulated in
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Clough Mill. On the first issue: Re Bond Worth; Re Peachdart; Modelboard v

Outerbox; Hendy Lennox v Grahame Puttick. On the second issue: Indian Oil v
Greenstone Shipping; and re CKE Engineering. In relation to the final issue: Pfeiffer
v Arbuthnot; Compaq v Abercorn; and Tatung v Galex Leisure.
Common errors
The most common and serious error from candidates answering this question was
failing to see that this was an RoT question, dealing with it instead as a passing of
property question, a SGA implied terms questions or a nemo dat exceptions
question. While RoT clauses can raise nemo dat issues, this question was
deliberately drafted so that no meaningful conclusion on that or the other issues
wrongly considered was possible.
Those who addressed this as a RoT question tended to heap too much emphasis
on the Romalpa decision, demonstrating little knowledge beyond it and being forced
into conclusions that later case law would not support.
begin by noting what an RoT clause is and draw on the case law to explain at what
point the seller’s interest will usually be lost and how this might occur, drawing on
relevant case law. Some discussion around incorporation and the interpretation of
the term is useful but need not be lengthy on these facts. This then provides
sufficient basis to deal with the first and second issues, considering the mixing of
goods and the impact this has on the seller’s interest. Finally, an in-depth
discussion would be expected of the attempt to retain the proceeds of sale,
explaining why this is problematic, particularly why it requires a fiduciary
relationship, which while found in Romalpa has not been held to exist, despite
attempts, as here, to cast the buyer/seller relationship as one of agent/principal,
demonstrating the need to undertake an analysis of the substance of the
relationship.
tended to demonstrate no real knowledge beyond Romalpa and little ability to apply
it to, or analyse the problem, either providing a fairly aimless description of the law
or using a limited understanding to reach some erroneous and poorly supported
conclusions.
Question 6
‘Creditors have a wide range of distinct and effective securities available to
them in English law.’
Discuss.
General remarks
Very few candidates attempted this question, which invited those attempting it to
demonstrate their knowledge of the various forms of security recognised at common
law.
Guarantee and indemnity: Actionstrength Ltd v International Glass Engineering;
Moschi v Lep Air Services; Statute of Frauds 1677.
Pledge: Coggs v Bernard; Re Hardwick, ex parte Hubbard.
Lien: Hammonds v Barclay; Tappenden v Artus.
Charge: Re Cosslett (Contractors) Ltd; Re Yorkshire Woolcombers Association Ltd.
Mortgage: Downsview Nominees Ltd v First City Corporation Ltd; Swiss Bank
Corporation v Lloyds Bank Ltd.
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Common errors
There were few errors as such but a tendency to offer insufficient detail and show
insufficient appreciation of the relevant case law.
offer an outline of what a security is, why it is used and the requirements common
to all securities. Then, identify that there are both personal and real securities,
discussing guarantee and indemnity and continue to provide a detailed account of
each form of real securities, with a knowledge of the case law that has defined and
refined them, showing an understanding of the often subtle distinctions between
them with an overall analysis that clearly addresses the question.
struggled to articulate the nature of a security and provide generalised, poorly
informed descriptions of the various types, unable to distinguish them.
Question 7
‘The reform of the law relating to the sale of goods brought a separate regime
for sale of goods by businesses to consumers but much of the law pertaining
to consumers is not new.’
Discuss.
General remarks
This question invited candidates to compare and contrast the SGA regime with the
CRA regime. Very few candidates attempted this question.
A successful answer to this question would hinge on demonstrating a solid
understanding of the key parts of both CRA and SGA, especially those relating to
the scope of the Acts, the provisions in relation to property and risk, terms as to
quality and fitness and particularly those in relation to remedies.
Common errors
The most common error in answering the question was a failure to offer a detailed
answer that clearly made sufficient references to substantive provisions of the
legislation and provided comparative analysis of them. Instead, some answers
simply provided an over-general outline of their history.
very briefly introduce the two most relevant pieces of legislation and explain the
recent evolution in the law. A good answer would then select a range of examples
from the two pieces of legislation and compare and contrast them, building a case
through the essay as to whether or not the law really had undergone a dramatic
shift. It would be likely that in areas such as remedies, the changes would be
regarded as a significant and not always an improvement. Whereas, in other areas,
it would be noted that the CRA falls back on the SGA and changes, e.g. to implied
terms, are largely semantic. A very good answer might look more holistically,
looking at whether consolidation of all sale and supplies legislation was effective
and whether entirely novel terms, e.g. in relation to digital goods, were a welcome
addition.
tended to offer little more than discussion about the two pieces of legislation and
what they sought to do. They tended to be highly general and highly descriptive yet
make few references to the CRA or SGA.
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Question 8
Gonzalo entered into an agreement to buy a freezer for his restaurant from A1
Catering Supplies Ltd. The agreement with A1 Catering Supplies provided for
payment within 60 days of delivery and contained a clause retaining title until
payment was made in full. Gonzalo took delivery of the freezer but could not
afford to pay for it and sold it to Elina, for £4,000. Elina paid for the freezer by
cheque. The contract between Elina and Gonzalo did not include a retention
of title clause. Ten days later, Gonzalo discovered Elina’s cheque had been
dishonoured. He could not contact Elina so instead informed the police.
The day after she bought it, Elina took the freezer to Silvio for servicing. Silvio
is a repairer of and occasional dealer in commercial catering equipment. The
next day, Elina was telephoned by Silvio to say that he had received an offer
of £5,000 for the freezer. This was completely untrue. Elina said that she
would be willing to sell the freezer for £6,000 and asked Silvio to do so if
possible. Silvio put the freezer on display in his showroom and sold it to
Pavel for £5,000.
Pavel then sold the freezer to Jorge for £5,500. Jorge agreed he would collect
the freezer from Pavel’s warehouse the next day. Not aware it had been sold
to Jorge, a member of Pavel’s staff sold the freezer again to Miranda for
£4,500. Miranda paid for the freezer and took it away with her.
A1 Catering Supplies are now seeking the return of the freezer from Miranda.
Advise Miranda.
General remarks
This is a question on the nemo dat exceptions contained with the SGA. Such
questions often appear challenging and few candidates attempted it, however, the
issues raised were no greater in number or complexity than in any other question
on the paper. At each stage, candidates are required to determine who gets the
better title and why, explaining the applicable exception and applying it and
explaining its effect. The number of parts to this question mean a focus on the
relevant law and its application is especially important. More methodical and well-
structured answers that deployed a concise written style were especially well
credited.
Feuer Leather Corporation v Frank Johnstone & Sons
Ingram v Little
Lewis v Avery
Car & Universal Finance v Caldwell
Pearson v Rose & Young
Stadium Finance v Robins
Newtons of Wembley v Williams
Common errors
The most common error in answering this question was in failing to see that it was a
nemo dat exceptions question and instead dealing with it as a SGA implied terms
question. Answers that took this approach rapidly became mired in difficulty as the
question could not be answered on this basis. A number of answers also failed to
identify correctly the exception applicable to each part of the question and/or simply
described some of the potentially relevant exceptions without any real attempt to
apply them to the law.
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address the issues carefully, in sequence. Noting first that under Gonzalo’s contract
with A1 no title has passed. Therefore, ostensibly G can only give his possessory
title in any further disposition. A good answer would then identify that title could only
pass if the requirements of s.25 were satisfied but also see that the sale to Elina
was in itself a sale under a voidable title requiring consideration of s.23. A good
answer would then spot that the next issue was one of mercantile agency, set out
what this means and consider whether Silvio would be considered as one, meaning
this his disposition would pass good title to Pavel. Finally, a good answer would
apply s.24 to determine which of the two people who bought the freezer from Pavel
would acquire good title to it.
generally did little more than reproduce potentially relevant provisions from the
statute book or provide only a description of the law without any meaningful
application. Or, attempt to apply a provision familiar to the candidate when it was
clearly was not applicable. Poor answers were often focused wholly on ss.24 and
25.
12

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Examiners’ reports 2018

Examiners’ reports 2018

LA2017 Commercial law – Zone A

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Clough Mill. On the first issue: Re Bond Worth; Re Peachdart; Modelboard v

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