The University of Hong Kong

Department of Law

Academic Year of 2019-2020

Examiner’s Report

[This report will be posted onto intranet immediately after the release of exam results]

Course code: JD1010 Course title: Commercial Law

Report prepared by: Stephanie Wong Date: 8 June 2020

Overall Comments

This year’s students perform very well in the final exam on both questions – problem and
essay.

For problem questions, most students are able to spot most issues, except the most
commonly missed issues are in relation to the effects of agency, legal consequences,
and remedies.

As for essays, most students are able to structure their answers well, with sub-headings
and topic sentences. Further, students are able to demonstrate their ability to argue,
reason and persuade, with creative stances taken. This shows that the students do
understand the deeper notions of the topics taught.

Better students could even define the key terms in the essay before discussing whether
they agree with the concepts, such as defining what is meant by
“unsatisfactory”/”unprincipled” etc.

Some students put substantive and substantial information in the footnotes. This would
result in mark deduction, since footnotes should be reserved for ancillary and
supplemental matters.

Part A Question 1

This is an essay question on sale of goods.

Most students are able to break down the key elements and discuss them separately –
“unsatisfactory”, “unclear”, “unjustifiable”, whether it should be reformed and how.

Better students are able to discuss relevant cases and tests proposed by academics and
discuss whether those authorities pose any problems to the area of law, such as Sterns
v Vickers.

Some proposed reform are interesting (e.g. linking risks with possession etc.) and better
students are able to back up the proposal with reasons, instead of merely proposing a
test out of nowhere.

Part A Question 2

This is an essay question on priority of charges and the reform in the Companies
Ordinance (Cap. 622).
Again, most students are able to break down the key elements in the question and
discuss each element separately.

Better students are able to structure their answers by dividing up the answers into parts
relating to different tests on priority of charges. This structure is logical and reader-
friendly.

Part B Question 3

This is a problem question on agency and sale of goods.

Most students are able to advise Pebble Toy Ltd. against its agent Amy as well as against
the third party Teddy in separate sections.

Since there are quite a number of issues in the questions, some students have missed
out a small number of less apparent issues, such as ratification, the implication of the
signing of the agreement by one of Pebble Toy Ltd’s directors, the relevance of testing of
the sample which may preclude the applicability of s.16(2) SOGO, whether the contract
with Teddy is one of sale of goods (or provision of services or for work and materials),
Amy’s apparent authority,

In any event, most students are able to spot most of the issues.

Better students are able to point out the relevant remedies for Pebble Toy Ltd.

Most students who attempt this question are able to spot that the second part in relation
to Investo Ltd. does not fall within the scope of SOGO.

Part B Question 4

This is a problem question on agency and secured financing.

Most students are able to identify and discuss issues relating to various sources of
authority.

Some students were not able to grasp the distinction between parts (a) and (b) of the
question. Part (a) should relate to the scenario where agency is undisclosed, whereas
Part (b) relates to scenario where agency is disclosed.

The best students should be able to identify even for Part (b), the agent sometimes does
not necessarily drop out of the picture, and would be personally liable (when objectively
ascertained the agent has taken up personal liability: The Swan).

Some students have mixed up the parties. Therefore it is important to set out clearly on
the draft papers the names and roles of the respective parties.

For the several security documents, the most common mistake is that the students forget
to address the requirement of registration, in particular some of the subject-matters of the
documents in the question (such as ship, trade mark etc.) require registration pursuant
to s.334 CO (Cap. 622).

Most students were able to point out the controversies regarding the “fixed charge” over
the ship and the mortgage over the trade marks – whether restrictions on dealing with
and usage is sufficient to give rise to fixed charge, and whether the lack of documents
signed for the trade marks indicate the lack of intention to transfer property.
For the charge over book debts, some better students are able to point out a loophole
and unknown fact – whether the password can be changed by Akina Ltd. / Tower Ltd. If
it can be changed unilaterally, then it is unlikely a “fixed” charge.

Unfortunately some students identified the personal guarantee as “real security”. Better
students should be able to point out a privity problem – that the guarantor Mr. Lam is not
a party to the guarantee document, since the question only mentioned that the documents
were executed and entered into by Akina Ltd. and Tower Ltd.