Suggestions for Hampshire Hire Ltd and Hussein - Essay Example

Commercial Law Table of Contents Assignment 3 Introduction 3 1 Suggestions for Hampshire Hire Ltd. 3 2 Suggestions for Universal Finance Ltd. and Joan 6 1.3 Suggestions for Hussein 8 Conclusion 9 Assignment 2 10 Problem 1 10 Introduction 10 Discussion 11 Conclusion 13 Problem 2: Scenario One 14 Introduction 14 Discussion 14 Conclusion 15 Problem 2: Scenario Two 16 Introduction 16 Discussion 16 Conclusion 17 References 18 Assignment 1 Introduction The issues associated with the case related to Bob’s Motors Ltd include different factors undergoing the policies with regard to English Sale of Goods Act. The issues in this case can be characterised into three major types of problems. The first problem related to the case signifies the legal liability of Hampshire Hire Ltd while it had faced damages due to the explosion of Nissan Note Cars by lightening during they were being transported from outside the showrooms of Bob’s Motors Ltd. Correspondingly, the second issue of the case explores the problem regarding the hire-purchase proposal of Gill to Bob’s Motors. According to the problem, Gill who had made hire-purchase contract with Bob’s Motors by exchanging her Ford Fiesta with Nissan Micra by overlooking her previously made contract with Universal Finance. Besides, the third problem in this case depicts the issue of serious engine fault in a second-hand Nissan 370Z sports car by Hussein after purchasing it from Bob’s Motors. Therefore, the study provides relevant advice to Hampshire Hire Ltd, Universal Finance Ltd and Joan along with Hussein on the basis of the case situation. The discussion of the study provides the claims that can be made by each party relating to the case and also ensures to demonstrate effective remedies that are available for the parties to claim their responsibilities. 1.1 Suggestions for Hampshire Hire Ltd. With reference to the problem associated with the case of Bob’s Motors Ltd., it has been ascertained that John, a key representative of the company (Bob’s Motors Ltd.) had entered into a valid contractual agreement with Hampshire Hire Ltd. for selling Nissan Note cars for £13,000 each. According to the deal, Bob’s Motors is likely to deliver four new Nissan Note cars on 25th June 2014. In the similar context, Hampshire Hire has accepted the terms and conditions of the contract and agreed to carry the pre-ordered vehicles at his own risk. However, the transporter had undergone natural calamities that led all the pre-ordered Nissan Note cars by Hampshire Hire to explode. In this context, Bob’s Motors has denied to take the responsibility regarding the incident. Subsequently, it can be stated that the incident associated with the explosion of four Nissan Note cars during the delivery to Hampshire Hire occurred due to lightning. In relation to the concern associated with the case of Hampshire Hire, the occurrence of such unavoidable incident can be termed under the consideration of Force Majeure. According to Sale of Goods Act in English contract law, it is evident that none of the parties are liable for any failure to meet contract obligations. Such type of failure in complying with the obligations is caused by a Force Majeure event1. In relation to the theoretical context, Force Majeure is often referred to an event, which is beyond the reasonable control of both the parties involved within a particular contract. In this regard, the English law of contract includes numerous events that could not have been foreseen or if it is then it can be termed as an unavoidable concern that might not be reasonably controlled by any parties or individuals. For instance, industrial disputes such as employee lock-outs, strikes, failure of resources or transportation network, civil commotion, act of God, terrorism and war/terrorism or different types of natural disasters and adverse condition of weather are often considered under Force Majeure events. In case of any type of such occurrence leading to cause a major concern during delivery of transportation of goods to the final destination can be considered under the act of Force Majeure2. With reference to the issue associated with the case of Hampshire Hire, the incident of explosion of the Nissan Note cars due to the lightening can be considered under a Force Majeure event. Correspondingly, none of the parties involved in the contract of delivering cars to Hampshire Hire are responsible for the said unavoidable event. Subsequently, it can be suggested to Hampshire Hire that the party is liable to participate after the occurrence of explosion of the company’s newly ordered vehicles from Bob’s Motors. According to the provision underneath the English law of contract, it is ascertained that the participation of the party is acceptable and practicable after experiencing any loss due to the occurrence of Force Majeure event. Thus, Hampshire Hire should notify Bob’s Motors regarding the extent of the event and use each reasonable measure with appropriate evidence. The process would help Hampshire Hire to make reasonable claim to the insurance company i.e. Easy Finance Plc and help both the parties to continue with their previously made contractual agreement. Moreover, Hampshire Hire is also liable to claim additional loss amounts that had been borne by the company while transporting Nissan Note cars. In this context, John, the key representative of Bob’s Motors is subjected to take appropriate measures in terms of claiming insurance that the company provided to Hampshire Hire. The Sale of Goods Act in the UK commercial law also protects the interests of both Bob’s Motors and Hampshire Hire or continues their exiting contractual process, as the Act considers the impact of Force Majeure events that had been faced by the parties3. 1.2 Suggestions for Universal Finance Ltd. and Joan The scenario provided in the case explores a detailed understanding about the case of Hampshire Hire and Bob’s Motors. In this context, the insurance service provider i.e. Easy Finance Plc is liable to ensure adequate return regarding the loss caused by lightning. With regard to the case regarding the hire-purchase proposal of Gill to purchase a Nissan Micra demonstration model for £8,000 by exchanging her old Ford Fiesta at an agreed valuation of £2,000. In order to make the contract, Gill and John both had agreed to accomplish the deal with an advanced deposit of £1,000. Correspondingly, Gill has also provided a photocopy of her license as a legal document to the financer company with the aim of exchanging the Ford Fiesta with a new Nissan Micra. According to the primary requirements relating to Hire-purchase Act in the English law of contract, it has been ascertained that the owner is liable to state by a memorandum to the prospective hirer. The memorandum of the hire-purchase agreement should be incorporated with a number of terms and conditions along with the acceptance of both the parties. In this process, the owner should be ensured in terms of providing detailed specification along with price of the product to the hirer. In addition to the process of detailing specification of the goods, the owner should also need to clearly mention cash price and sets of articles regarding information about the product to the hirer while entering into a hire-purchase agreement. Furthermore, the hirer is also liable to provide detailed information to the owner or any financing company while entering into a hire-purchase agreement. The hirer in this context is liable to provide detailed personal information in order to successfully enter into a hire-purchase contract. With reference to the case of Gill and Easy Finance company, both the parties have been witnessed to overlook the basic requirement by establishing valid memorandum regarding the hire-purchase agreement. Nevertheless, the parties have also been identified to overlook in terms of complying with the requirement of detailed information about the good to be sold or the personal detail of the hirer while entering into the contractual process. However, Gill has been found guilty due to providing inappropriate or vague details about the ownership of her old Ford Fiesta, which was to be exchanged with a new Nissan Micra. According to the case, it has been identified that Gill has been found to use vague license in terms of getting finance of her newly purchased Nissan Micra. In this regard, the submission of vague details in the hire-purchase contractual process can lead to create a major concern for both Gill and the financing company. The deliverance of registration document to Gill may also lead the financing company to face major issue as the hirer of Nissan Micra had been submitted a vague license detail in the contractual process. With reference to a brief idea of the case, it has been observed that Gill has breached the principle associated with the Sale of Goods Act in UK contract law. Due to the non-compliance with the general provisions, both John and Easy Finance Plc possess equal right to make the advance payment made by Gill insolvent regarding buying new Nissan Micra. Moreover, both John and Easy Finance Plc also possess the right to consider the contract as insolvent and cancel the exchange option along with hire-purchase contract among the parties. Therefore, Gill should provide detail information about the previous hire purchaser terms of Ford Fiesta to avoid the issue of insolvency regarding the agreement made with Easy Finance. Moreover, Easy Finance should also need to acquire appropriate information about the hirer with justification and continue with the hire-purchase agreement. 1.3 Suggestions for Hussein The background of the case of Hussein and Bob’s Motors provides a critical understanding while a purchaser faces major difficulties with the product sold by a company. According to the case scenario, Hussein, the purchaser of five year old second-hand Nissan 370Z sports car had entered into a contract with Bob’s Motors with the acceptance of required policies along with terms and conditions of the agreement. According to the agreement, the legal liabilities of Bob’s Motors had excluded any type of faults of the vehicle after selling to a purchaser. Subsequently, Hussein had discovered a serious engine fault in the purchased vehicle, which can be a major concern for the purchaser to claim. According to a brief understanding of the case, it can be stated that the legal provision in a sale contract details the requirement of information about the good to be sold to a purchaser. In the context of selling second-hand goods, the policies associated with English sale contract often require valid description about the price along with technical specification of the vehicle to the potential purchasers. However, according to the case, Bob’ Motors had not appropriately communicated or demonstrated the technical aspects of the vehicle that can further impose major complications for the potential buyers. Subsequently, it is evident that Bob’s Motors is not entirely subjected to deal with the issue of serious engine fault of the sold five year old second-hand Nissan 370Z sports car, which faced by Hussein. Contextually, it can also be stated that the sale contract in the English Sale of Goods Act requires an agreement of the purchaser by critically specifying each term and condition offered by an individual or organisation while entering into a contract. According to the sale of contract in English Sale of Goods Act, it is evident that the buyer is subjected to bear the responsibility regarding any fault with the products after signing agreement. According to L’Estrange v. Graucob [1934] 2 KB 394 case, it has been ascertained that conformity with the terms and conditions of a sale contract imposes responsibility to the buyers in case if further dispute occurs with the product4. In this regard, Hussein, the purchaser of the five year old second-hand Nissan 370Z sports car from Bob’s Motors is subjected to bear the responsibilities regarding the major engine faults with the vehicle. On the other hand, Hussein can also claim the responsibility to Bob’s Motors only if there any type of exclusion clause that is misrepresented by the company while selling the five year old second-hand Nissan 370Z sports car to him. Conclusion With reference to the scenario of the case, the study demonstrates effective remedies regarding the liability of the parties by considering legal aspects in the English Sale of Goods Act. In the context of Hampshire Hire Ltd, the company has been advised to make legal claim to Easy Finance and continue with the existing contract with Bob’s Motors. In relation to the case of Universal Finance, the company is suggested that they have the right to claim against Gill as she had entered into a new hire-purchase contract with Bob’s Motors by overlooking the existing liability of paying all outstanding instalments to the previously made contract. With respect to the problem of Hussein, the purchaser of Nissan 370Z sports car is advised to obtain the claim if only the exclusion clauses were misrepresented by the seller Bob’s Motors. Assignment 2 Problem 1 Introduction Anders agreed to sell 8000 planks of sawn softwood timber to Barry in London c.i.f. Southampton shipment at Gothenburg. Anders chartered the Winston Churchill merchant ship from Cindy for transportation from Gothenburg to Southampton. Cindy who employed the crew was the in-charge of the vessel. 4000 planks were loaded into hold number 1 and 4000 in other hold number 1. The captain for the two respective hold numbers issued the two bills of lading. Anders airmailed the bill of lading to Barry who subsequently agreed to sell 4000 plans of timber in hold number 2 to Danny and bills of lading was sent to Danny along with other subsequent shipment documents. Notably, Danny made full payment for the contract. Later, Danny agreed to sell 1000 planks in hold number 2 to Edith and subsequently a delivery order was drafted to Cindy to deliver to Edith in Southampton 1,000 planks of sawn timber in hold number 2. However, on arrival in Southampton, the planks of timber in hold number 1 were in poor condition that was particularly caused during the transit process. At the same time, many of the planks were burnt owing to fire that resulted from the negligence of an engineer utilising welding equipment while repairing damage caused by storm. Against this background, it can be asserted that Barry, Danny and Edith can sue Cindy for the damage of goods grounded on the English Tort law to claim compensation for the damage of goods incurred by them. Discussion Bill of lading is considered as a very important document with regard to the shipment of goods concerning the maritime practice as well as under the rules governing carriage of goods by sea. It generally refers to the certificate issued by owner of ship or his representative acting on behalf of him. Three distinct attributes of the certificate are recognised that delineate the importance of bill of lading. Firstly, it serves two discrete contractual roles based on the questions that seek to answer whether there surface relationship amid the carrier or the bona fide shipper or amid the carrier and the endorsees. In this regard, the former relationship mainly substantiates contract of carriage and while the latter relationship signifies the contract of carriage itself. The second distinct attribute of bill of lading generally recognises the certificate title which authorizes the holder to take custody of the goods loaded overseas by the carrier. Last but not least, thirdly, it represents a receipt for the goods and chattels by the carrier which confirms three distinct qualities including the quantity or volume of the goods in concern, the leading marks on the goods and whether or not the goods are actually in good order and condition5. Under the English law, claimant/receiver of the cargo who seeks to sue and make claim against the carrier grounded on the contract of carriage must be able to establish the role of shipper as an agent for the claimant/ receiver during the time when the contract of carriage was entered. In circumstances where the role of shipper as an agent for the claimant is created, contractual relationships arises between the carrier and the receiver. Correspondingly, the receiver/claimant is entitled to acquire contractual rights as well as liabilities under the contract of carriage. More specifically, under the English law claimant/receiver of the cargo is entitled with the right to sue the carrier for the loss or damage of the goods. In this regard, the right of the cargo receiver to sue carrier is deemed to be valid if: 1. He is a legitimate holder of the bill of lading 2. The carrier has delivered the goods under a ship’s delivery order Besides, it has been recognised that in circumstances where the party to whom goods has been delivered does not acquire the rights to suit carrier under the bill of lading contract, the receiver or the claimant is entitled to sue or seek legal proceedings against the carrier under the tort of negligence. However, it has been ascertained that in order to do so the receiver to whom goods has been delivered must have possessory title or legal ownership to the goods in concern during the occurrence of the damage or loss6. Given the case scenario, it can be stated that bills of lading issued by the captain clearly stated that the place of jurisdiction for any disputes arising from the bills of lading contract i.e. High Court of London and the condition of the goods which defined that goods to be delivered were in good order. More importantly, the bills of lading specified that the carrier would not be liable for loss or damage to the goods resulting from any negligence by the carrier’s servants. Correspondingly, Barry, Danny and Edith do not have the right to sue the carrier under the bill of lading contract or under the contract of carriage. However, Barry, Danny and Edith can sue and claim compensation for the damage of the goods under the tort of negligence. Conclusion From the overall analysis, it can be concluded that Barry, Danny and Edith have suffered from damage of goods delivered from the carrier. However, the bills of lading clearly identified that the carrier shall not be liable for any damage caused to the goods by any negligence or default by the carrier’s servants. In this regard, Barry, Danny and Edith do not have the right to sue or claim for the damage of goods under the bill of lading contract or under the contract of carriage. Nevertheless, under the English tort law of negligence Barry, Danny and Edith can sue the carrier and subsequently can claim compensation for the damage of the goods delivered. Problem 2: Scenario One Introduction In this particular case, Homer made a c.i.f contract with Jurgen with regard to selling of 1,000 American soya beans which will have its shipment from New Orleans that will be delivered in Hamburg. The captain of the ship issued bills of lading which stated the condition of the goods and other aspects pertaining to the shipment process. According to the bills of lading 1,000 tonnes of American soya beans that were loaded abroad the Hindu Princess, a vessel by Gupta were in good order and condition. The bills of lading also stated that payment for the fright would be made at the time of discharge. On 30th November 2004, Homer sent a tender to Jurgen in Hamburg and provided the bill of lading, a certificate of insurance, an invoice for the full contract price of the sugar and an inspection certificate. However, the market price of the “soya beans” has dropped considerably before actual delivery of the goods in concern. Now, Jurgen wishes to cancel the contract otherwise he believes that he needs to bear heavy loss. In this regard, it is vital to highlight the rights and liabilities of receiver/claimant to repudiate contract in order to advice Jurgen. Discussion Based on the above case scenario, it is vital to mention that in any contract entered by the parties, the terms and conditions serve as the basis for the legal proceedings of the parties. However, in this particular case, Jurgen has no liability to cancel the contract with Homer as there remains no evidence of breach of any terms of the contract. Again, the changes in price of the goods to be delivered have been occurred after the completion of the contract. Correspondingly, Homer will have no legal obligation to make any legal adjustment in prices in the later stages with the change in market price. In this regard, it will be vital to mention the case of Bowes v Shand7. The case clearly reflected that the shipment period was an integral part of the contract and the description of the goods and hence non-compliance to the same will only result in breach of the contract. In addition, in this particular case, specific clause has been mentioned reflecting the date of discharge i.e. 10th October 2004 with regard to the delivery of goods by Homer to Jurgen. Hence, there arises no issue pertaining to the delay in the delivery of the goods in transit. Again, in the case of Kwei Tek Chao v. British Traders, it has been reflected that if a buyer does not have the liability to reject the documents of the carriage or the purchase, he/she still have the right to reject the goods owing to wrong dated cheque or any other quality issues with the product8. However, in this case, there is no such scenario apparent which further limits the liabilities of Jurgen with regard to the cancellation of the order or contract with Homer. Hence, a remedy for Jurgen in this particular case can be perceived to be highly uncertain. Conclusion Based on the above analysis, it can be concluded that Homer does not have any obligations towards the considerable decline in the price of the soya beans. Besides, there does not exist any ground based on which Jurgen can reject the documents tendered. Thus, it can be affirmed that Jurgen has no right to reject the documents tendered. Problem 2: Scenario Two Introduction Homer entered into a c.i.f contract with Martha in Hamburg with regard to selling 2000 tonnes of American dry cured pork slices. The shipment of the goods was agreed to be made from New Orleans and the amount will paid by letter of credit which will further be confirmed by a Credit Bank of Hamburg. American dry pork slices were loaded in Gupta’s vessel, the Hindu Princess for which Homer received three bills of lading which stated the condition of goods while loading, dates of discharge of the consignment and an original bill. However, the payment for goods was subjected to be made by letter of credit under the U.C.P. 600, 2007 revision for which Homer is required to supply necessary document to Commercial Bank in order to complete the payment procedure. Nevertheless, the Commercial Bank on receiving certain documents is unsure whether they must cancel the documents tendered to them or not. Discussion Homer on request of the bank forwarded the required documents to it. In this regard, it is essential for the bank to confirm the validity of the documents provided by Homer in order to issue or repudiate the credits. Since the credit was subjected to the U.C.P. 600, 2007 revision, it is vital to apply revised U.C.P rules. Notably, as per article 4 of the U.C.P. rules, bankers have the right to reject the documents justifiably owing to which the seller will not be able to recover the price of the product from the buyer as seen in the case of Shamsher Jute v. Sethia [1987] 1 Lloyds Rep. 3889. However, wrongful rejection of the documents will adversely affect the bank. As per article 14 & 16 of the U.PC, banks need to accept the documents that are in alignment with the requirements of the credit. If the action of the bank results in wrongful repudiation of the documents and credit, the claimant may sue the buyer on the ground of repudiation of the sales contract as apparent in the case of Urquhart Lindsay v. Eastern Bank Ltd10. In this regard, it can be seen that Commercial Bank asked the documents including an “ocean bill of lading, policy of marine insurance and commercial invoice” to complete the credit procedure in favour of Homer. Homer thus provided the bank with one bill of lading which ratified shipment of the goods in concern, a document or certificate of insurance, an invoice containing details regarding the goods in concern. This shows that the bank got the required documents that are necessary to complete the process of granting credit to Homer on behalf of Martha11. Hence, Commercial Bank should not reject the documents tendered to them. Conclusion From the evaluation of the above case scenario, it has been identified that all necessary documents sought by Commercial Bank to credit in favour of Homer, were duly received which also complied with the rules prescribed under the U.C.P. 600, 2007 revision. Thus, it can be asserted that Commercial Bank should not reject the documents tendered to them. References Bridge, M. G., 1998. The Sale of Goods. Oxford: Oxford University Press. Carr, I. & Stone, P., 2013. International Trade Law. New York: Routledge. Geotechnical Instruments (U.K.) Limited, No Date. Terms and Conditions for the Sale of Goods. Force Majeure. [Online] Available at: http://www.geotechuk.com/media/183312/sales_terms_and_conditions.pdf [Accessed August 14, 2014]. Lee B. & Yang, J., 2006. The Bill of Lading Functioning as the Contract of Carriage in English law. Journal of Korea Trade, Vol. 10, No. 2, pp. 169-186. Oughton, D. & Davis, M., 2000. Sourcebook on Contract Law. London: Cavendish Publishing Limited. Ryder, N. & et. al., 2012. Commercial Law: Principles and Policy. Cambridge: Cambridge University Press. Schwenzer, I. & et. al., 2012. Global Sales and Contract Law. Oxford: Oxford University Press Stapleton, J., 1994. Product Liability. Cambridge: Cambridge University Press. Swarb, 2012. Shamsher Jute Mills Ltd -v- Sethia (London) Ltd; 1987. Home. [Online] Available at: http://swarb.co.uk/shamsher-jute-mills-ltd-v-sethia-london-ltd-1987/ [Accessed August 16, 2014]. Todd, P., No Date. Kwei Tek Chao v. British Traders and Shippers Ltd. Cases. [Online] Available at: http://pntodd.users.netlink.co.uk/cases/cases_k/kwei_tek.htm [Accessed August 16, 2014]. Read More