1. On Wednesday Bovine Co, a dairy farmer, visits Slurry Co, agricultural merchants in Warwickshire and agrees to buy 30 tons of “Nitrogrow” fertiliser (all Fred has in stock), 300 gallons of diesel oil and a “ John D” tractor of which Slurry Co has several in his showroom. Bovine Co agrees to deliver the fertiliser and the tractor the following Friday and Bovine Co agrees to send a road tanker to collect the diesel oil the same day. Slurry Co agrees to give Bovine Co 28 days credit from the date of the sale in respect of the purchase price of all three items.
On Thursday, Slurry Co discovers that 20 tons of the fertiliser have been stolen from his premises and it is impossible to obtain further supplies this season. Slurry Co delivers the remaining ten tons, but Bovine Co refuses to accept them. Bovine Co does not send a tanker to collect the diesel oil, which is in a tank containing 1,000 gallons, until two weeks after the date stipulated in the contract. He then finds that the oil has seriously deteriorated and he refuses to accept it.
On Friday, Slurry Co puts the tractor on one of his own lorries for delivery to Bovine Co, but on the way the lorry is involved in a serious accident and the tractor is badly damaged.
Slurry Co claims that Bovine Co is bound to pay for the oil and the tractor and to pay damages for non-acceptance of the fertiliser.
Advise Bovine Co.
In order to be able to refute the claims of Slurry Co, it is important to understand with whom the “Property” of the various goods laid at the time of the various incidents. Property is defined as “the absolute legal interest in the goods” (Sealy & Hooley, 2005, p. 254) and is indelibly linked to the concept of risk. Under various sections of the Sale of Goods Act, mention is given to “the risk” passing to the buyer. In this case, “the risk” is considered to be the chance that the goods may be wholly or partly destroyed or lost by theft. It should be noted that in this context, risk is not attributable to fault or inaction of either of the parties to the contract. In order to provide a clear path through the relevant sections of law, each item in the contract has been dealt with as a separate entity for analysis.
Table of Contents
The Fertiliser
The Oil
The Tractor
Objective and Key Themes
This coursework provides a legal consultation analysis regarding a fictional dispute between Bovine Co and Slurry Co, focusing on the allocation of risk and the transfer of property for three distinct goods under the Sale of Goods Act 1979.
- Analysis of property transfer and risk for specific versus unascertained goods.
- Examination of contractual obligations and the impact of delayed delivery.
- Application of relevant legal precedents and statutory sections (e.g., Sections 16, 17, 18, and 20).
- Determination of liability for damaged or destroyed goods in transit or storage.
Excerpt from the Book
The Fertiliser
The first distinction that needs to be drawn is that of the type of good that the fertiliser represented. Given that the fertiliser was identified and represented all that Slurry Co had in stock, it is reasonable to classify it as a specific good. It should be noted, that in the event that Slurry Co was in possession of more fertiliser, and there was no way to identify the 30 tonnes requested by Bovine, it would instead be classed as an unascertained good and would therefore be subject to a different set of laws.
The second issue lies in the passing of property. Section 17(1) of the Sale of Goods Act 1979 states that “Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred”. Since we have no information with regards to the express intentions of the parties in this case, we must use the guidelines set out in Section 18.
At this point, it is important to clarify the various concepts and usages of “delivery”. Under Section 61 of the Sale of Goods Act 1979, delivery is defined as the “voluntary transfer of possession from one person to another”, and should not be confused with the concept of physical delivery. Thus, we can take little use from the information in the case that Slurry agreed to deliver certain items at a later date. Given that the Fertiliser can be considered to be in a “deliverable state”, that is to say it is in a state that Bovine Co would be bound to take delivery of it under contract, a not unreasonable claim in the circumstances; we can apply Rule 1 from Section 18. Given that Rule 1 states “Where there is an unconditional contract for the sale of specific goods in a deliverable state the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery, or both, be postponed”, we can see that the property of the Fertiliser can be shown to have passed to Bovine Co at the time the contract was agreed.
Summary of Chapters
The Fertiliser: This chapter categorizes the fertiliser as specific goods and concludes that property and risk passed to the buyer at the time of the contract, making Bovine Co liable for the loss.
The Oil: This chapter identifies the oil as unascertained goods and finds that because delivery was delayed due to the buyer's fault, the risk lies with Bovine Co despite property not having passed.
The Tractor: This chapter treats the tractor as a specific good and determines that risk passed to the buyer at the time of contract, thus shielding the seller from liability for transit damage.
Keywords
Sale of Goods Act 1979, property, risk, specific goods, unascertained goods, deliverable state, contract, liability, non-acceptance, breach, bailee, frustration, transit, damage, legal consultation.
Frequently Asked Questions
What is the primary purpose of this document?
The document serves as a legal advisory essay written for Bovine Co to analyze their liability regarding three specific contracts for goods following various incidents of loss and damage.
Which legal framework is used to analyze these cases?
The analysis is strictly based on the provisions of the Sale of Goods Act 1979 and relevant common law precedents.
How is the distinction between property and risk handled?
The text explains that property refers to the absolute legal interest in goods, while risk relates to the burden of potential loss or destruction, which prima facie follows the transfer of property unless otherwise agreed or stipulated by fault.
What is the status of the fertiliser in this case?
It is classified as a specific good in a deliverable state, meaning property and risk passed to the buyer at the moment the contract was formed.
Why is the oil treated differently from the fertiliser?
The oil is classified as an unascertained good (part of a larger bulk), meaning property does not pass until the goods are ascertained; however, the buyer is held liable for deterioration due to their failure to collect on time.
What is the main finding regarding the tractor?
Since it is treated as a specific good, the risk passed to the buyer at the point of contract, meaning Bovine Co is liable for its destruction during transit.
Can Bovine Co successfully refuse to pay for the tractor?
Based on the analysis, it is unlikely; since the risk had already passed to them at the time of the contract, Slurry Co remains entitled to payment.
What is the significance of the "fault" provision in Section 20(2)?
It allows for the transfer of risk to the party at fault if delivery is delayed, which effectively holds Bovine Co responsible for the deterioration of the oil.
Under what circumstances could the contract for the fertiliser be voided?
If Bovine Co could prove the risk remained with Slurry Co at the time of the theft, Section 7 might allow for the contract to be avoided through the doctrine of frustration.
- Quote paper
- BSc Daniel Döring (Author), 2006, Invented Case - Bovine Co v Slurry Co - Law Coursework - Consultation Essay , Munich, GRIN Verlag, https://www.grin.com/document/79536
