Practice questions 221(h) What would the legal position be if Bertha took delivery of the potatoes and immediately
discovered that they were rotten?
(i) In what circumstances could Susan sue Bertha for the £180 of the price which had not
yet been paid?
( j) Is Susan an unpaid seller?
(k) Would Susan have a right to a lien? If Susan did have a right to a lien, what would this
right amount to?
(l) In what circumstances would Susan have a right to stop the goods in transit? How would
she do this and what would the effect of doing it be?
(m) In what circumstances would Susan have the right to resell the potatoes to a different
buyer?
(n) If Susan delivered the potatoes to Bertha, what would be the effect of a reservation of
title clause in the contract?3 Work out who will own the goods in the following examples:
(i) A has agreed that B can borrow his bicycle while A goes on a month’s holiday. Without
permission or authority, B sells the bicycle to C, who believes that B is the owner of
the bicycle. A did not know B well and made no attempt to check whether or not he was
honest.
(ii) D buys a car from a garage, deliberately paying with a bad cheque. The following day the
garage owner discovers that the cheque has bounced and tells the police and the AA to
look out for the car. One week later D sells the car to E, an innocent purchaser who pays
a reasonable price for the car.
(iii) F has taken a car on hire-purchase from a finance company. F sells the car to G, a dealer
in cars who does not know that the car is the subject of a hire-purchase agreement.
G sells the car to H, another dealer in cars. I, a carpenter, buys the car from H in good
faith and then sells it on to J.
(iv) An art dealer who often sells paintings on behalf of clients is asked to renovate a paint-
ing by K, so that K can sell it at auction. L visits the art dealer’s shop while the art dealer
is having his lunch and the art dealer’s shop assistant sells the painting to L.
(v) N visits an art dealer’s shop and examines a painting for some considerable time. Later
N phones the shop and makes a definite agreement to buy the painting for £2,000. The
dealer is to deliver the painting to N’s house the following day. Later, by mistake, a shop
assistant sells the same painting to O, who takes it away.
(vi) P buys a machine from Q for £4,000. Ownership is not to pass to P until the full price has
been paid. P takes possession of the machine and, without Q’s permission or knowledge,
sells the machine to R. P has now become insolvent.4 Explain the circumstances in which a person who does not own goods can nevertheless pass
ownership of those goods to a third party.