Part 3Business transactions
328
1 Consider whether the following statements are true
or false:
(a)If a manufacturer gives a guarantee with his
goods, he will be bound to the end-user to meet
the terms of the guarantee – True/False?
(b)The statutory implied conditions of satisfactory
quality and fitness for purpose only apply to
sales to consumers – True/False?
(c)If a seller is unsure about his title to goods, he
can transfer limited title to the buyer and will not
be in breach of s 12 of the Sale of Goods Act
1979 – True/False?
(d)The implied terms in ss 12–15, Sale of Goods
Act cannot be excluded in any business or
consumer contract – True/False?
2 Greenacres, a firm of estate agents, decides to give
its image a face-lift by refurbishing its reception
area. Greenacres places the contract with a local
company, Office Style Ltd, which agrees to supply
the following items:
(a)six easy chairs and matching coffee table
selected from Office Style’s existing stock by
Greenacres’ senior partner;
(b)a new carpet which has to be ordered direct
from the manufacturer;
(c)a set of free-standing display units, already in
stock, which Office Style agrees to adapt to hold
the particulars of houses for sale.
The night before the refitting is due to take
place, Office Style’s warehouse, containing all
the items for the Greenacres job, is completely
destroyed by fire.
Advise Greenacres.
3 Luigi owns an Italian restaurant. He has experienced
a few problems with recent deliveries from his
suppliers and he seeks your advice.
(a)He orders 500 tins of Italian tomatoes. The
supplier delivers 400 tins of Italian tomatoes
and 100 tins of Greek tomatoes.
(b)He orders 10 kg of parmesan cheese, but the
supplier delivers only 2 kg.
(c)He orders 50 kg of spaghetti. The supplier
delivers 100 kg.
(d)He has a regular order with a local baker for 100
bread rolls to be delivered by 11 am every day.
On one occasion the rolls do not arrive until 2 pm.
4 Jim agrees to supply 300 turkeys to a London
butcher’s shop during a three-week period prior to
Christmas. What are Jim’s remedies in each of the
following situations?
(a)The butcher rings up at the end of November
to cancel the order because he has found a
cheaper supplier.
(b)While the second consignment of 100 turkeys is
being transported by rail to London, Jim hears
from a neighbouring farmer that the butcher is
having difficulty paying his debts.5 Fred recently obtained a 24-inch remote control
colour TV set. What are Fred’s rights and the source
of these rights in the following circumstances?
(a)Just as he is sitting down to watch ‘Match of the
Day’, there is a flash and a puff of smoke from
the back of the TV and the screen goes blank.
Fred bought the set new from a local department
store. He paid for it in cash.
(b)Fred obtained the TV from his brother-in-law,
Tom, by swapping his music centre. Fred was
assured by Tom that it was a colour TV, but so
far he has only got a black-and-white picture.
(c)Fred is an American football enthusiast. He told
the salesman at TV World Ltd, a local electrical
shop, that he wanted a TV that would receive
Channel 4 broadcasts because of his interest in
American football. Fred, who is buying the TV
on HP, has now discovered that he cannot get
Channel 4 with this particular model.
(d)The remote control unit refuses to work. Fred
acquired the TV on hire from a local TV rental firm.6 Mr and Mrs Carter decide to install double-glazing
in their house. They get three firms to provide
‘estimates’ for the job, the cheapest (£4,000) being
submitted by Kozee Ltd, which they ask to do the
work. The Carters sign a contract, but the document
does not mention the price payable for the work or
how long it will take to complete. The workmen start
the job in July, but the work proceeds in fits and
starts and is finished finally in December. The
Carters are very unhappy with the workmanship; the
house is still very draughty and there has been no
noticeable saving in their fuel bills. They have now
received a bill from Kozee Ltd for £9,000 and they
seek your advice.Self-test questions/activities