Keenan and Riches’BUSINESS LAW

Payment

The price is such a fundamental part of the transaction

that it will normally be fixed by the contract. However,

it may be ascertained by the course of dealing between

the parties or the contract may provide a mechanism for

determining the price, such as by arbitration. The par-

ties may make their own agreement as to the time of

payment. The seller may insist on payment in advance of

delivery or he may be prepared to extend a period of

credit. In the absence of such express agreement, pay-

ment is due when the goods are delivered.

Remedies

Seller’s remedies

Two sets of remedies are open to the seller. He can pur-

sue personal remedies against the buyer himself and real

remedies against the goods.

Personal remedies

The seller can sue the buyer for the contract price or for

damages for non-acceptance.

1 Action for the price (s 49).The seller can bring an

action for the contract price in two situations: where the

property in the goods has passed to the buyer or where

the buyer has failed to pay by a specified date, irrespect-

ive of whether ownership has passed to the buyer.

2 Damages for non-acceptance (s 50).If the property

in the goods has not passed and the buyer will not accept

Part 3Business transactions

318

Cleggv Olle Andersson (t/a Nordic

Marine)(2003)

Clegg agreed to buy a new yacht with a shoal draught keel

‘in accordance with the manufacturer’s standard speci-

fications’ from Andersson. The manufacturer delivered

the yacht to Andersson on 25 July 2000 and Andersson

in turn delivered it to Clegg on 12 August 2000.

Andersson realised that the keel was heavier than the

manufacturer’s specifications and informed Clegg when

the yacht was delivered. The parties then entered into

negotiations but then on 6 March 2001 Clegg’s solicitors

wrote to Andersson stating that Clegg was rejecting the

yacht and claiming a refund of the purchase price. The

Court of Appeal held that the yacht was not of satisfact-

ory quality because the keel was overweight. Andersson

was in breach of condition under s 14(2) of the Sale of

Goods Act. Clegg had not indicated to Andersson that

he had accepted the contract nor had he done anything

in relation to the yacht which would be deemed incon-

sistent with Andersson’s ownership. In deciding whether

acceptance had taken place after the lapse of a reason-

able period of time, account could be taken of the time

required to modify or repair goods. Clegg had requested

information in August and September 2000 but did not

receive a response until 15 February 2001. The three-

week period which then elapsed before Clegg rejected

the yacht on 6 March 2001 did not exceed a reason-

able time under s 35(4) and Clegg was therefore entitled

to reject the yacht. The court stated that Bernsteinv

Pamsons Motors (Golders Green) Ltd(1986) no longer

represented the law after the enactment of the Sale and

Supply of Goods Act 1994.

s 35 a buyer has the right to reject goods up to the point

when the goods are accepted. A buyer is not deemed to

accept goods merely because he has agreed to a repair.

The harrow was a complex piece of machinery and the

appellants were entitled to the information they re-

quested so they could make an informed choice about

whether to accept or reject the repaired equipment. The

majority of the House of Lords based their decision not

on the original contract of sale but on the agreement that

the suppliers would try to effect a repair of the harrow.

Depending on the circumstances, this agreement might

be subject to an implied term that if asked the suppliers

would tell the appellants what was wrong with the har-

row and what they had done to put it right. As the sup-

pliers had refused to provide this information, they were

in breach of contract.

J & H Ritchie Ltdv Lloyd Ltd(2007)

The appellant farmers purchased a combination seed

drill and power harrow from the respondent suppliers of

agricultural machinery. After a few days’ use, one of the

appellants’ directors noticed that the harrow was vibrat-

ing badly. By agreement the harrow was taken back to

the suppliers, where on inspection it was found to be

missing two bearings. The suppliers repaired the harrow

and informed the appellants that it had been repaired to

‘factory gate specification’ and was ready for collection.

Despite requests by the appellants, the suppliers refused

to say what had been done to the harrow or to provide

an engineer’s report. The appellants decided to reject

the equipment and brought an action to recover the pur-

chase price of the harrow. The House of Lords held that

the appellants were entitled to reject the harrow. Under