79018 Advanced Commercial Law
Assignment
On 2 March 2019 Candy, a director of We-Build-It Pty Ltd (WBI) visited Boris, a supplier of steel products at his factory in Lidcome, New South Wales. She was accompanied by her husband Denis, a structural engineer, who works for another company. Candy tells Boris that Denis will be in charge of negotiations for the purchase of building materials and she then leaves Boris and Denis together in the factory and departs for another meeting. Under the Constitution of WBI, any one director is granted authority to sign contracts on behalf of the company for amounts of up to $100,000.
After inspecting some samples in Boris’s stock yard, Denis signs an order form on behalf of WBI for $54,000 worth of steel products, telling Boris that the material will be used for building houses in various parts of the state.
The steel is to be used to build a house in Cooma. Boris has still not been paid for the steel. Unfortunately, it has been discovered that the steel is brittle at very low temperatures, such as those experienced in the Cooma winter and is liable to failure without warning. It would have been suitable for use in a warmer part of the state.
The home owner is threatening legal action against WBI (having paid in full for the house) and the parties are asking you for advice about their rights and liabilities arising out of these facts. Advise the parties.
Answer this question with reference to SOGA and not the ACL. You do not need to address whether the steel products are personal or real property. Assume it is personal property for the purpose of this question. You do not need to address the remedy sections in the SOGA. The focus here should be on implied terms in the SOGA along with transfer of title.
You MUST answer ONLY two of the following.
1.Agency
Tony is a bricklaying subcontractor working with his team on a building site for National Constructions. He and his team are the only ones on the site. The National Constructions supervisor is on another site for the day. A delivery truck from Timber West arrives with a load of timber and the driver asks Tony to sign for it: Tony signs. The next day the supervisor returns to the site. He says that there has been a mistake and that National Constructions did not order the timber. He rings Timber West to ask them to pick up the timber. Timber West way that as far as they are concerned National Constructions have signed for the timber and will have to pay for it.
Advise whether National Constructions must pay for the timber using the principles of agency to determine whether agency exists here.
2.Bankruptcy
Summarise the various options that are available to someone who is in financial difficulty and can not pay their debts as they fall due. What are the advantages and disadvantages of each option.
3.Personal Property
Medical Treatment Limited has acquired a new piece of skin treatment machinery. It is worth $10,000,000 and is state of the art in treatment of skin cancer treatment. It weighs two tonnes. To be effective it must be securely fastened to a metal frame and then bolted into a concrete slab. If it moves at all during operation it will not be effective in its treatment of the patient.
Explain whether this piece of machinery is personal property or not. In your discussion you should refer to at least two law cases that deal with this type of question.
4.Bailment
Sue leaves a box of personal belongings in her office at the end of a lease. She rings the new occupiers and tells them that she will collect the box within a couple of weeks and that it contains her personal belongings. They agree that she can leave the box there as long as it is not in the way of staff. The box has disappeared and Sue wants to know about her chances of recovering damages for breach of bailment against the occupiers of the office. She did not tell them that there was a small bag containing some valuable jewellery in the box.
Answer this question using the law of bailment. Ignore the possible application of the Australian Consumer Law.
