Commercial Law I CUZL331
Section A
Answer both questions
Hudson’s car sale
A man called Hudson had a Morris Mini on hire-purchase terms from Auto Finance
Services (Hallamshire) Lrd. He has turned out to be a rogue and deceiver. He deceived a
Mr Ness into thinking that the car was clear of any hire-purchase agreement. Mr Ness
was not a dealer in cars. He was a private purchaser. The rogue, Mr Hudson, told Mr
Ness that the car had been previously on hire-purchase but that had paid up the last
instalment—£6—a few months before. He produced a receipt for £6, dated 9 May 1968,
across which was written ‘Final Payment’. He sold the car to Mr Ness and gave him a
receipt over a stamp on 29 January 1969, which read:
‘I John Hudson hereby confirm the said vehicle Morris Mini reg. number DNE 277 C is
not covered by any H.P. agreement whatsoever, and I accept the sum of £25 from Mr. T.
Ness absolute payment for the above-named vehicle.’
So Mr Ness acquired the vehicle believing it was clear of any hire-purchase. Mr Hudson
had deceived him. The receipt for £6 was not a receipt for this car at all, nor was it from
the Auto Finance Services (Hallamshire) Ltd. It was a receipt from another firm
altogether—Bowmaker Ltd—and did not mention any particular car. At any rate, it was
not this car. Mr Ness, however, believed that the car was clear. He repaired the car, did
it up, and sold it to a dealer—Mr Bell—who sold it to another dealer—Mr Barker. Then,
whilst the car was in Mr Barker’s possession, on 19 August 1969, Auto Finance Services
(Hallamshire) Ltd found out it was there. They sent men to claim it from Mr Barker,
together with this letter:
‘You have purported to acquire the above vehicle which is the property of this company
under a rental agreement with one J. Hudson of Eccles. The bearer of this letter has
instructions to collect our property forthwith, and legal proceedings will be taken against
any person attempting to prevent him from carrying out these instructions.’
So Mr Barker let the men take the car. Mr Barker then sued Mr Bell for breach of the
implied condition as to title. Mr Bell brought in Mr Ness as third party.
Q.1.
a) How relevant distinct is a hire purchase transaction? (6 marks)
b) Do you think hudson had a right to sell the car? (5 marks)
c) Do you Mr Ness acquired a better title to the car considering that he bought it
without notice of defects in title?(14 marks)
Total 25 marks
Q.2.
a) Distinguish a conditional sale and credit sale from hire purchase agreements.(3
marks)
b) ‘Give a critic on the Hire Purchase Act Cap 399 of the laws of Zambia. (12
marks)
c) You are the lawyer retained by Mr Baker, present the arguments you will advance
in his action. (10 marks)
Total 25 marks
Section B
Answer two questions
Q.3.
a) Parties to a contract of sale hardly negotiate their terms. How are buyers
protected?. (10 marks)
b) ‘ In the development of our law, two principles have striven for mastery. The first
is for the protection of property: no one can give a better title than he himself
possesses. The second is for the protection of commercial transactions: the person
who takes in good faith and for value without notice should get a good title’
Elucidate. (15 marks)
Total 25 marks
Q.4.
a) Discuss the liability of a principal against third parties. (6 marks)
b) Discuss the circumstances in which an agent may be held liable personally. (6
marks)
c) Fat Madumbo is a fuel attendant at Petroda Filing Station, owned by Nonsense
Nshangalilwa, who has been expressly forbidden from purchasing fuel in excess
of fifty million kwacha. Thief Kabwalala is an experienced driver of a fuel tanker
and usually supply Petroda filling station with fuel. Last Friday, Thief went to
Petroda Filing Station as a last point of delivery. Thief’s tank had fuel worth more
than fifty million kwacha. Thief promised Fat an extra 200 litres of fuel if she
purchased the remaining fuel and further gave her an extra K200 000 for a drink.
Since the offer was irresistible she gladly purchased the fuel which was only
worth fifty one million kwacha. It being a Friday and that she was the only one
working that day she knocked off at exactly 18hours. Fat told Cheat Wabufi her
workmate about Thief over the phone later that evening.Nonsense has discovered
from payment vouchers that Fat made purchases in excess of fifty million kwacha
and Cheat has told Nonsense about what she was told by Fat over the phone on
Friday. Before taking any action Nonsense has come to you for legal advice.
Proceed. (13 marks)
Total 25 marks
Q.5.
a) Examine the question of the price and goods and the transfer of property and risk
in sale of goods contracts. (13 marks)
b) Maiwasi made an order for the supply of four Children dresses for her girls aged 6
and 8 years from Mingozi Clothing. Maiwasi ordered two pink and two purple
dresses fit for the use of the girls. Mingozi Clothing did not have the colours
requested for by Maiwasi but demanded that she pays for the dresses whose total
cost came to K600,000. She made the payment but to her surprise Mingozi
Clothing delivered blue and yellow dresses. Maiwasi is not amused by the
development and she walks into your office for advice. Advise accordingly. (12
marks
Total 25 marks
Q.6.
a) Briefly expatiate how agency may be created and determined ( 11 marks)
b) Duties of an agent are an essential to the agency relationship. Critically discuss
the agent’s duties. (14 marks).
Total 25 marks