COMMERCIAL LAW CHAPTER 1 INTRODUCTION pAGE 11
LPC NOTES
[COMMERCIAL LAW]
(2019-2020)
,COMMERCIAL LAW CHAPTER 1 INTRODUCTION pAGE 11
LPC NOTES ON COMMERCIAL LAW.
COMMERCIAL LAW CONTENTS pAGE i
Contents
1 Introduction ....................................................................................................... 1
Introduction .................................................................................................. 2
1.1 What is commercial law? ................................................................................... 3
1.2 Learning outcomes for Commercial law ................................................................. 4
1.3 Approaching your study ..................................................................................... 5
1.4 Study skills .............................................................................................................. 8
1.5 The examination ................................................................................................ 9
Reflect and review ........................................................................................... 12
2 Agency 1 ........................................................................................................... 13
Introduction ................................................................................................ 14
2.1 What is an agency? ............................................................................................... 15
2.2 Types of agent ................................................................................................. 18
2.3 Creation of agency .......................................................................................... 20
2.4 The actual authority of the agent ...................................................................... 22
2.5 Apparent authority ........................................................................................... 24
2.6 Usual authority: Watteau v Fenwick ...................................................... 27
2.7 Ratification ...................................................................................................... 28
2.8 Agency of necessity......................................................................................... 31
2.9 Capacity ................................................................................................................ 32
Reflect and review ........................................................................................... 34
3 Agency 2 ........................................................................................................... 35
Introduction ................................................................................................ 36
3.1 Relationship with third party: disclosed agency ................................................ 37
3.2 Relationship with third party: undisclosed principal .......................................... 41
3.3 Relationship between principal and agent ........................................................ 45
Reflect and review ........................................................................................... 50
4 Sale of goods: contract, property and risk .................................................... 51
Introduction ................................................................................................ 52
4.1 The Sale of Goods Act ........................................................................................... 53
4.2 The scope of the Act ........................................................................................ 55
, 4.3 What is a contract of sale of goods? ................................................................. 55
COMMERCIAL LAW CHAPTER 1 INTRODUCTION pAGE 11
4.4 The sale contract ................................................................................................... 58
4.5 ‘Transfers or agrees to transfer the property’ ............................................... 60
4.6 Risk.............................................................................................................................. 69
4.7 Perishing of goods and frustration of contract .............................................. 70
4.8 Transfer of title ........................................................................................... 72
Reflect and review ........................................................................................... 78
pAGE ii UNIVERsity OF LONDON INTERNATIONAL PROGRAMMEs
5 Sale of goods: performance and implied terms ............................................ 79
Introduction ................................................................................................ 80
5.1 Terms ................................................................................................................................ 81
5.2 Delivery and payment ...................................................................................... 82
5.3 Implied terms as to title and quiet possession: s.12 .......................................... 85
5.4 Implied term as to description: s.13 ................................................................. 88
5.5 Implied terms as to quality: ss.14-15 ................................................................ 92
5.6 Implied term as to satisfactory quality: s.14(2) ................................................. 93
5.7 Implied term as to fitness for particular purpose: s.14(3) .................................. 99
5.8 Implied terms in sales by sample: s.15 ............................................................ 102
5.9 Limitation or exclusion of liability ............................................................... 103
Reflect and review ......................................................................................... 105
6 Sale of goods: acceptance, remedies and retention of title ....................... 107
Introduction .............................................................................................. 108
6.1 Acceptance ......................................................................................................... 109
6.2 Remedies of the buyer ................................................................................... 111
6.3 Remedies of the seller .................................................................................... 115
6.4 Retention of title by the seller ........................................................................ 119
Reflect and review ......................................................................................... 123
7 International sale contracts .......................................................................... 125
Introduction .............................................................................................. 126
7.1 Documents and contracts .............................................................................. 127
7.2 fob contracts ................................................................................................. 128
7.3 cif contracts ................................................................................................... 131
7.4 Ex-works, ex-ship and fas contracts ................................................................... 136
7.5 Electronic ‘documentation’ ............................................................................ 137
7.6 An international law of international sales?.................................................... 137
Reflect and review ......................................................................................... 139
8 Payment: documentary credits .................................................................... 141
Introduction .............................................................................................. 142
8.1 Documentary bill (bill of exchange) ............................................................... 143
8.2 Documentary credit ....................................................................................... 144
8.3 Strict compliance ........................................................................................... 149
8.4 Autonomy of the credit .............................................................................. 152
8.5 Contractual rights and obligations ................................................................. 155
Reflect and review ......................................................................................... 158
Feedback to activities ......................................................................................... 159
Chapter 2 ..................................................................................................................... 161
Chapter 3 ..................................................................................................................... 163
Chapter 4 ..................................................................................................................... 164
Chapter 5 ..................................................................................................................... 167
Chapter 6 ..................................................................................................................... 169
, Chapter 7 ..................................................................................................................... 171
COMMERCIAL LAW CHAPTER 1 INTRODUCTION pAGE 11
Chapter 8 ..................................................................................................................... 172
Introduction
Contents
Introduction ........................................................................................................ 2
1.1 What is commercial law? ............................................................................... 3
1.2 Learning outcomes for Commercial law ........................................................... 4
1.3 Approaching your study ................................................................................. 5
1.4 Study skills .......................................................................................................... 8
1.5 The examination ............................................................................................ 9
Reflect and review ................................................................................................... 12
AGE 2 UNIVERsity OF LONDON INTERNATIONAL PROGRAMMEs
Introduction
This subject guide provides a structure for your study of commercial law. It gives an
overview of the various topics of which this course is comprised and is a guide to
the essential and further reading materials. It is not a substitute for those reading
materials. You should work through each chapter and the associated readings and you
should undertake the activities as a means of deepening your understanding of the
subject. At the end of each chapter, you should pause to consider whether you have
achieved the learning outcomes.
While commercial law is based in contract law, it also includes elements of tort,
equity and property law. The resources on which a commercial lawyer draws include
legislation, cases and international agreements. This course, therefore, builds on
knowledge acquired through your study of law and it develops your skills of analysis
and synthesis.
You should use a notebook or ring binder as you study this course. This should be
used for recording answers to activities and making working notes. It is not the same
as your Skills portfolio, which should contain the evidence that you are acquiring
learning and legal skills. See 1.3.3 for more details.
LPC NOTES
[COMMERCIAL LAW]
(2019-2020)
,COMMERCIAL LAW CHAPTER 1 INTRODUCTION pAGE 11
LPC NOTES ON COMMERCIAL LAW.
COMMERCIAL LAW CONTENTS pAGE i
Contents
1 Introduction ....................................................................................................... 1
Introduction .................................................................................................. 2
1.1 What is commercial law? ................................................................................... 3
1.2 Learning outcomes for Commercial law ................................................................. 4
1.3 Approaching your study ..................................................................................... 5
1.4 Study skills .............................................................................................................. 8
1.5 The examination ................................................................................................ 9
Reflect and review ........................................................................................... 12
2 Agency 1 ........................................................................................................... 13
Introduction ................................................................................................ 14
2.1 What is an agency? ............................................................................................... 15
2.2 Types of agent ................................................................................................. 18
2.3 Creation of agency .......................................................................................... 20
2.4 The actual authority of the agent ...................................................................... 22
2.5 Apparent authority ........................................................................................... 24
2.6 Usual authority: Watteau v Fenwick ...................................................... 27
2.7 Ratification ...................................................................................................... 28
2.8 Agency of necessity......................................................................................... 31
2.9 Capacity ................................................................................................................ 32
Reflect and review ........................................................................................... 34
3 Agency 2 ........................................................................................................... 35
Introduction ................................................................................................ 36
3.1 Relationship with third party: disclosed agency ................................................ 37
3.2 Relationship with third party: undisclosed principal .......................................... 41
3.3 Relationship between principal and agent ........................................................ 45
Reflect and review ........................................................................................... 50
4 Sale of goods: contract, property and risk .................................................... 51
Introduction ................................................................................................ 52
4.1 The Sale of Goods Act ........................................................................................... 53
4.2 The scope of the Act ........................................................................................ 55
, 4.3 What is a contract of sale of goods? ................................................................. 55
COMMERCIAL LAW CHAPTER 1 INTRODUCTION pAGE 11
4.4 The sale contract ................................................................................................... 58
4.5 ‘Transfers or agrees to transfer the property’ ............................................... 60
4.6 Risk.............................................................................................................................. 69
4.7 Perishing of goods and frustration of contract .............................................. 70
4.8 Transfer of title ........................................................................................... 72
Reflect and review ........................................................................................... 78
pAGE ii UNIVERsity OF LONDON INTERNATIONAL PROGRAMMEs
5 Sale of goods: performance and implied terms ............................................ 79
Introduction ................................................................................................ 80
5.1 Terms ................................................................................................................................ 81
5.2 Delivery and payment ...................................................................................... 82
5.3 Implied terms as to title and quiet possession: s.12 .......................................... 85
5.4 Implied term as to description: s.13 ................................................................. 88
5.5 Implied terms as to quality: ss.14-15 ................................................................ 92
5.6 Implied term as to satisfactory quality: s.14(2) ................................................. 93
5.7 Implied term as to fitness for particular purpose: s.14(3) .................................. 99
5.8 Implied terms in sales by sample: s.15 ............................................................ 102
5.9 Limitation or exclusion of liability ............................................................... 103
Reflect and review ......................................................................................... 105
6 Sale of goods: acceptance, remedies and retention of title ....................... 107
Introduction .............................................................................................. 108
6.1 Acceptance ......................................................................................................... 109
6.2 Remedies of the buyer ................................................................................... 111
6.3 Remedies of the seller .................................................................................... 115
6.4 Retention of title by the seller ........................................................................ 119
Reflect and review ......................................................................................... 123
7 International sale contracts .......................................................................... 125
Introduction .............................................................................................. 126
7.1 Documents and contracts .............................................................................. 127
7.2 fob contracts ................................................................................................. 128
7.3 cif contracts ................................................................................................... 131
7.4 Ex-works, ex-ship and fas contracts ................................................................... 136
7.5 Electronic ‘documentation’ ............................................................................ 137
7.6 An international law of international sales?.................................................... 137
Reflect and review ......................................................................................... 139
8 Payment: documentary credits .................................................................... 141
Introduction .............................................................................................. 142
8.1 Documentary bill (bill of exchange) ............................................................... 143
8.2 Documentary credit ....................................................................................... 144
8.3 Strict compliance ........................................................................................... 149
8.4 Autonomy of the credit .............................................................................. 152
8.5 Contractual rights and obligations ................................................................. 155
Reflect and review ......................................................................................... 158
Feedback to activities ......................................................................................... 159
Chapter 2 ..................................................................................................................... 161
Chapter 3 ..................................................................................................................... 163
Chapter 4 ..................................................................................................................... 164
Chapter 5 ..................................................................................................................... 167
Chapter 6 ..................................................................................................................... 169
, Chapter 7 ..................................................................................................................... 171
COMMERCIAL LAW CHAPTER 1 INTRODUCTION pAGE 11
Chapter 8 ..................................................................................................................... 172
Introduction
Contents
Introduction ........................................................................................................ 2
1.1 What is commercial law? ............................................................................... 3
1.2 Learning outcomes for Commercial law ........................................................... 4
1.3 Approaching your study ................................................................................. 5
1.4 Study skills .......................................................................................................... 8
1.5 The examination ............................................................................................ 9
Reflect and review ................................................................................................... 12
AGE 2 UNIVERsity OF LONDON INTERNATIONAL PROGRAMMEs
Introduction
This subject guide provides a structure for your study of commercial law. It gives an
overview of the various topics of which this course is comprised and is a guide to
the essential and further reading materials. It is not a substitute for those reading
materials. You should work through each chapter and the associated readings and you
should undertake the activities as a means of deepening your understanding of the
subject. At the end of each chapter, you should pause to consider whether you have
achieved the learning outcomes.
While commercial law is based in contract law, it also includes elements of tort,
equity and property law. The resources on which a commercial lawyer draws include
legislation, cases and international agreements. This course, therefore, builds on
knowledge acquired through your study of law and it develops your skills of analysis
and synthesis.
You should use a notebook or ring binder as you study this course. This should be
used for recording answers to activities and making working notes. It is not the same
as your Skills portfolio, which should contain the evidence that you are acquiring
learning and legal skills. See 1.3.3 for more details.
