1
ENGLISH
COMMERCIAL LAW
By Dr. A.E. Platsas
School of English Law
Dr. Antonios E. Platsas
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WELCOME NOTE
Dear all,
Welcome to the module of English Commercial Law. This is a module which touches
upon the core of English private law. The module which seeks to give you advanced
knowledge on the main areas of English commercial law. We will engage ourselves
with the jewel of English commercial law, the Sale of Goods Act 1979 (as amended);
competition law, consumer law (now an autonomous offshoot of commercial law due
to the influences of European law) and e-commerce law.
English commercial law is generally perceived as one of those intellectual flagships
of English law as a whole. Do recall that the Englishman has been a trader in his
heart. Him having excelled in commerce meant that he would excel in private law.
The sophistication of his commercial laws has caused his laws to be the setting
paradigm for the laws of other jurisdictions, jurisdictions which did not have to be
connected with the old British Empire. The Scandinavians for instance would draft
much of their commercial law based on the English legal example.
Thus, the main advantage of this module is that the module will allow you to expand
on your knowledge in the leading field of commercial law.
In addition, the field of commercial law provides an excellent background for your
research. I invite you to take advantage of this fact and make the most out of this
module.
In the hope that I will immerse you in the particulars and the intricacies of what is one
of the most dynamic areas of English Law, Commercial Law, I would like to wish you
all the best in this module and your studies as a whole.
Antonios Platsas,
LLB, LLM., PhD, PG Cert, Reader in Law, FHEA, Advocate.
Dr. Antonios E. Platsas
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INDEX
PART I – SALE OF GOODS LAW
Section 1 - The Commercial Contract of Sale
Section 2 - The Duties and Responsibilities of the Parties
Section 3 - The Requirements Necessary to Enforce the Contract of Sale
Section 4 - The Competing Claims to the Ownership of Goods
Section 5 - The Remedies Available to the Seller and the Buyer
PART II – CONSUMER LAW
Section 6 - Consumer Protection
Section 7 - Consumer Credit Law and Regulation
PART III – E-COMMERCE LAW
Section 8 - Online Commerce
PART IV – COMPETITION LAW
Section 9 - Theoretical Foundations of Competition Law
Section 10 - Practical Aspects of EC/UK Competition Law
Dr. Antonios E. Platsas
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Indicative Reading List
Sale of Goods
•
•
•
•
JN Adams, Atiyah’s Sale of Goods (12th edn Pearson, Harlow 2010)
R Bradgate, Commercial Law (3rd edn Butterworths, Chippenham
2000)
E McKendrick (ed), Goode on Commercial Law (4th edn Penguin,
London 2010)
LS Sealy and RJA Hooley, Commercial Law Text, Cases and Materials
(4th edn OUP, Oxford 2009)
Consumer Law
•
•
•
M Furmston and J Chuah, Commercial and Consumer Law
(Pearson,Harlow 2010)
G Woodroffe, Consumer Law and Practice (8th edn Sweet & Maxwell,
London 2010)
JK MacLeod, The Law Relating to Consumer Sales and Financing of
Goods (2nd edn Routledge Cavendish, London 2006)
E-Commerce Law
•
•
•
P Todd, E-commerce Law (Cavendish, London 2005)
D Bainbridge, Introduction to Information Technology Law (Longman,
London 2007)
FF Wang, Law of Electronic Commercial Transactions (Routledge
Cavendish, London 2010)
Competition Law
•
•
•
R Whish, Competition Law (6th edn OUP, Oxford 2008)
M Furse, Competition Law of the EC and UK (6th edn OUP, Oxford
2008)
B Rodger and A MacCulloch, Competition Law and Policy in the EC
and UK (4th edn Routledge Cavendish, Abingdon 2008)
Dr. Antonios E. Platsas
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PART I – SALE OF GOODS
Section 1 – The Commercial Contract of Sale
Outline of this Section
1.0. – Outcome
1.1. – The Characteristics of the Contract of Sale
1.2. – The Most Important non-sale of Goods Transactions
1.3. – Activities
1.0 - Outcome
The students must show that they understand the differences between a contract of
sale regulated by the Sale of Goods Act 1979 and the non-sale of goods contract.
1.1 - The Characteristics of the Contract of Sale
The types of contracts that we will be dealing with in this course are those that
regulate the sale of goods. No formalities are required to create contracts for the
sale of goods and they may be written or oral. The governing statute will be the Sale
of Goods Act 1979 (SoGA 1979), as amended. We begin by defining the contract of
sale.
The defining characteristics of the contract of sale are contained in s 2 of the SoGA
1979. The contract of sale may be conditional, s 2(3), a future sale, s 2(5), or an
agreement to sell, s 2(6). s 2(1), delineates the following requirements:
A seller and a buyer
Both the seller and the buyer must have capacity and be committed to selling and
buying. This is evidenced by an intention to pass property under the contract.
Weiner v Harris (1910) LKB285 demonstrates the procedures the court will follow in
determining whether the parties are sellers and buyers.
The transfer or agreement to transfer property
Property is defined under s 61 as the general property in the goods and means the
transference of the absolute legal title or ownership. Contracts of sale must be
distinguished from those contracts where a lesser interest is transferred. Examples
of lesser interests are possessory interests such as bailment. See the cases of
South Australia Insurance v Randell (1869) LR3PC101 and Mercer v Craven (1994)
CLC328HL where the courts had to decide whether absolute legal title or a mere
possessory interest was transferred.
Money consideration
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Money refers to the unit of account issued for the purpose of legal tender within a
legal jurisdiction. Problems arise where goods are sold for other than money or,
where money is used in conjunction with goods such as the part exchange of a car.
See the cases of Esso Petroleum v Customs & Excise Coms (1976) 1ALLER117.
Aldridge v Johnston (1857) 7E&B885. Flynn v Mackin (1974) IR101.
A price
The price is a crucial term of the contract and failure to agree on the price may be
evidence that a contract has not been concluded. S 8(1) allows the contract to fix the
price, or left to be fixed in a manner agreed, or determined by a course of dealings
between the parties. Where none of these apply, s 8(2) requires the buyer to set a
reasonable price. S 9 determines those situations where the price is to be set by a
third party. See the cases of May v Butcher (1934) 2KBHL and Foley v Classique
Coaches (1934) 2KB1CA where the courts had to decide if the parties had actually
fixed a contract price or not.
Goods
S 5, distinguishes goods in the following way:
• Existing goods, these are goods that are in the possession of the seller at the
time of the contract.
• Future goods, those goods that have to be manufactured or acquired by the
seller pursuant to the contract.
• Specific goods, those goods that are identifiable in a complete form at the time
of the contract.
• Unascertained goods, those goods that are not specific and are sold by a
generic description.
S 61 defines the types of goods that fall within the above classifications. Recently
problems have emerged regarding the classification of computer software. See the
case of St. Albans CC v International Computers Ltd. (1996) 4ALLER481
1.2 - The Most Important non-sale of Goods
Transactions
Those contracts that do not satisfy the requirement of s 2(1) will not be classified as
sale of goods contracts. It is therefore crucial to determine the nature of the contract
because in the event of it is not a sale of goods contract then the contract will be
regulated by a different statute that may not be as advantageous as the Sale of
Goods Act 1979. The main statutes regulating non-sale of goods are the Supply of
Goods and Services Act 1982 along with the Supply of Goods (Implied Terms) Act
1973.
The most important non-sale of goods transactions are the following:
Hire Purchase
The object of a hire purchase is to supply goods on credit terms coupled with a
security for the supplier. The legal form of a hire purchase agreement is of a hiring or
bailment of the goods by their owner (bailor) to the hirer (bailee) with the hirer being
granted an option to purchase the goods at the end of the hire period. See the case
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of Helby v Matthews where the court was faced with the task of determining whether
a hire purchase agreement existed or not.
Work and Materials
As has been mentioned, the object of the contract of sale is the transfer of property
from the seller to the buyer. The object of a contract of work and materials is the
performance of a service for the customer. The distinction between the two becomes
blurred in instances of those contracts where both goods and services are
transferred. See how the courts have resolved distinctions such as this in the
following cases: Clay v Yates, Lee v. Griffin, Robinson v Graves, Hyundai Heavy
Industries v Papadopoulos, Beta Computer systems v Adobe.
Exchange and Barter
Where the consideration for a contract is not money the contract will be referred to as
either an exchange or barter. In the context of consumer contracts goods are often
supplied in conjunction with marketing promotions such as coupons or vouchers.
The courts in these instances will look to the intention of the parties; see the cases of
Esso Petroleum v Customs and Excise, Chappell & Co. v Nestle Ltd.
Hire and Bailment
A bailment and hire contract is characterised by a possessory interest in the goods
as opposed to a legal interest. In this capacity no ownership in the goods is
transferred. See the following cases where the courts have had to determine whether
the interest transferred was a possessory interest or whether the property in the
goods had been transferred: Clough v Martin, Leigh & Sullivan v Aliakmon Shipping,
Lilley v Doubleday.
1.3 - Activities
Reading
• Bradgate, Commercial Law (3rd Edition Butterworths), Chapters 7, 8, 19.
• PJ Omar, ‘Contracts for the sale of goods - French and British approaches’
ICCLR 1998, 9(5), 141-145 (WestLaw)
Abstract: Although this module does not concern itself with French law, this
article explains in a simple way important areas in the Sales of Goods Act
1979. By comparing the Act with French law, an understanding through
example can be found.
Activity Number 1
“A contract is a contract, and in application there is no difference between a contract
to build a house and a contract to sell a television”. Discuss this statement in light of
the form in which contracts are classified in English law.
Activity Number 2
Identify the legal nature of the following contracts:
NOTE: These questions raise issues of quality and the passing of risk. You are not
required to discuss these issues.
1. Mike takes his watch in for a service. The jeweller performs the service and
invoices Mike for the removal of rust from inside the watch, replacing a new
battery, replacing a new watch face, and for the replacing of worn links in the
Dr. Antonios E. Platsas
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watchstrap. The links prove to be defective and the watch falls of Mike's wrist
smashing to the ground.
2. Judy purchases a satellite TV dish from Jake a local dealer. The dish is priced
at £99 but the dealer advertises that for an extra £30 they will install the dish.
Judy agrees to pay £129 and have the dish installed by Jake. Judy pays the
full price in the store and the dish is delivered later that day. The next day
Jake declares insolvency and is now unable to install the dish.
3. Bill decides to build his own "Super" computer that would exceed the
capabilities of any commercially obtainable computer. This would involve
buying a kit from the manufacturer that contains the body, motherboard, CPU,
hard drive, and memory. Additions such as a modem, DVD and CD-Writer
would have to be bought separately. Bill asks his friend Steve to build this
computer for him and to find the appropriate additions. Steve agrees to build
the computer and purchases a second hand computer from Janet for £450.
The second hand computer contains the required DVD, Modem and CDWriter. Steve completes the "Super" computer and charges Bill £2,500. The
computer proves defective due to defects in the DVD and modem.
Would your analysis be different if:
• Steve paid for the kit and charged Bill £5,000 for the finished computer?
• Steve found the second hand computer, but Bill had gone with him and he paid
Janet for the computer?
Activity Number 3
Explain the manner in which the SoGA has classified the manufacture and use of
computer
software.
Dr. Antonios E. Platsas
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Section 2 - What the Duties are Between the
Parties Engaged in the Contract of Sale
2.0 - Outcome
Students must be able to categorise the duties imposed on the seller and the
buyer by the Sale of Goods Act 1979.
2.1 - Introduction
We will now establish what the duties are between the parties engaged in the
contract of sale are.
The duties of the parties are regulated by SoGa 1979 ss 27 & 28. It is the
duty of the seller to deliver the goods and of the buyer to accept and pay for
the goods in accordance with the terms of the contract. The duties of delivery
and acceptance are concurrent conditions, that is to say that the seller must
be willing to give up possession in exchange for the price and the buyer must
be willing to pay the price in exchange for the goods.
2.2 - Duties of the Seller
The duties of the seller fall under the headings of delivery and condition of the
goods.
Delivery
Under s 27 delivery requires the voluntary transfer of possession from one
person to another in accordance with the terms of the contract. In Four Points
Garage v Carter (1985) 3 All ER 12 the court held that the transfer of
possession may be satisfied symbolically through the delivery of documents
of title or to an agent.
Place
The SoGa 1979 s 29(2) requires the place of delivery to be determined by the
contract or if not, it will be the seller's place of business. The exception to this
would be if the goods are specific goods, then the place of delivery will be
where the goods are situated.
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Time
The SoGa 1979 s 29(5) & 29(3) requires the goods to be delivered at the time
stipulated by the contract of sale, or, if not, within a reasonable time. What is
a reasonable time will be determined as a question of fact. These sections
must be read in accordance with SoGa 1979 s 10(2) which requires a
determination as to whether time is of the essence or not. See the cases of
British & Common Holdings v Quandrex Holdings (1989) 3 All ER 492, and,
Bunge Corporation v Tradax SA (1981) 2 All ER 513 for a discussion of
instances where the time of delivery may or may not be of the essence.
Amount
The contract of sale will fix the amount of goods to be delivered and failure to
comply with that term will result in an unenforceable contract. SOGA s 30,
lays down a detailed set of rules defining the buyers rights where the seller
delivers more or less than the agreed quantity of goods. In essence, if the
incorrect amount is delivered the buyer may reject the whole contract amount
subject to the applicable limitations under SoGa s 30(2A), & s 30(2B). These
sections prohibit a buyer dealing as a non consumer from rejecting goods
where the shortfall is so slight that it would be unreasonable to do so.
Condition of the Goods
The seller is under a duty to supply goods in accordance with the implied
terms as to the condition of the goods under the SoGa 1979. The implied
terms are contained in SoGa ss 12-15. The implied terms are the most
important source of redress for the buyer if the goods are defective in any
way.
Goods must correspond with their description
SoGa s 13, implies a condition that where the goods are sold by description
they will correspond with that description once they are in the possession of
the buyer. The following requirements must be satisfied:
a. Was the sale by description? See Varley v Whipp (1900) 1 QB 513, Grant v
Australian Knitting Mills (1936) AC 85
b. What was the description by which the goods were sold? See Beale v Taylor
(1967) 3 All ER 253
c. Did the description influence the buyer? See Harlington & Leinster v Christopher
Hull (1991) 1 QB 564
d. Did the description identify the commercial characteristics of the goods sold? See
Ashington Piggeries v Christopher Hill (1973) AC 441
e. Did the description identify the goods to be supplied rather than an item or location
of the goods? See Reardon Smith v Hansen-Tagen (1976) 3 All ER 570
f. Did the goods correspond to all aspects of the detail by which they were
described? See Arcos v Ronaasen (1933) AC 470 HL
Dr. Antonios E. Platsas
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Satisfactory quality
SoGa s 14(2) implies a condition that where goods are sold in the course of a
business, the goods supplied will be of satisfactory quality. The meaning of "in
the course of a business" has been given a broad interpretation, See
Stevenson v Rogers (1999) QB 1028.
SoGa s 14(2A) creates an objective standard of satisfactory quality taking into
account the description of the goods, the price and any other relevant factors.
See Thain v Annieland Trade Centre (1997) SLT 102, Allbright & Wilson UK
Ltd v Biachem Ltd (2000) All ER 530, Rogers v Parish (1987) QB 1933,
Bartlett v Sidney Marcus Ltd (1965) 2 All ER 753.
SoGa s 14(2B) creates a checklist relevant to the quality of the goods:

Fitness for all purposes for which the goods are commonly supplied. See
Kendall v Lillico (1969) 2 AC 31, Aswan Engineering v Lupdine Ltd (1987) 1
All ER 135.

Appearance and finish, freedom from minor defects. This section attempts to
strike a balance between defects that render the goods unusable and defects
that are only minor and do not affect the usability of the goods. See Rogers v
Parish Ltd (1987) 2 All ER 232, Shine v General Guarantee Corp (1988) 2 All
ER 911, Bernstein v Pamson Motors (1987) 2 All ER 220, Millars of Falkirk v
Turpie (1976) SLT 66.

Durability and safety. Durability requires that at the time risk is transferred the
goods should not deteriorate more rapidly than can reasonably be expected.
Safety requires goods of satisfactory quality to be safe for use. See Thain v
Anniesland Trade Centre (1990) SLT 102.
Liability under SoGa s 14(2) is strict but under s 14(C), there are two
exceptions:
a. Where the defects are specifically drawn to the attention of the buyer.
b. Where the buyer examines goods before the contract is made and this reveals
certain defects.
The crucial point here is that there is no obligation on the buyer to inspect,
even if the seller creates the opportunity for inspection.
Fitness for purpose
SoGa s 14(3), where the buyer makes known to the seller any purpose for
which the goods are to be used, then the goods supplied under the contract
must be reasonably fit for that purpose. Again, the meaning of "in the course
of a business" has been given a broad interpretation, see Stevenson v Rogers
(1999) QB 1028.
Two requirements must be satisfied:
Dr. Antonios E. Platsas
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a) The particular purpose must be made known to the seller and, if it is a
special purpose, that purpose must be specifically stated. See Kendall &
Sons v Lillico & Sons Ltd (1969) 2 AC 31, Ashington Piggeries Ltd v
Christopher Hill (1972) AC 441, Slater v Finning (1997) AC 473.
b) The buyer must rely on the seller in circumstances where it would be
reasonable for the buyer to rely on the judgement of the seller. See Wren v
Holt (1903) 1 KB 610 CA, R& B Customs Brokers v United D.T. (1988) 1 ALL
ER 847, Aswan Engineering v Lupine (1987) 1 All ER 135.
Pass good title
SoGa 1979 s 12(1), imposes a duty on the seller in a contract for the sale of
goods to transfer to the buyer an absolute legal interest in the goods. Failure
to transfer an absolute legal interest will allow the buyer to reject the goods
and terminate the contract. See Niblett v Confectioners Materials Co Ltd
(1921) 3 KB 387, Rowland v Divall (1932) 2 KB 500, Barber v NSW Bank Ltd
(1996) 1 All ER 906.
In addition under SoGa s 12(2), there are two implied warranties:
a. The goods must be free of any charges and encumbrances.
b. The buyer must be allowed quite possession of the goods. See, Microbeads v
Vinhurst Road Markings (1975) 1 All ER 529.
Sale by sample
SoGa s 15, requires goods sold by sample to be free of any defects and also
for the sample to correspond with the bulk of the goods. See Drummond
(James) & Sons v EH Van Ingen & CO LTD (1887) 12 APP CAS 284, Godley
v Perry (1960) 1 WLR 9.
2.3 - Duties of the Buyer
Acceptance of the goods
SoGa 1979 s 27 requires the buyer to accept the goods and not wrongfully
reject the goods. This must be read in conjunction with SoGa 1979 s 37 that
apportions liability on the buyer for refusing or, being negligent in not taking
delivery of the goods after the seller has requested him to do so.
The meaning and application of acceptance under the act will be discussed
later under the buyer's remedies.
Payment for the goods
The duty to pay the price is fundamental to the contract of sale and under
SoGa s 8(2) the price may be fixed by the contract, or, by a manner to be
agreed in accordance with the contract or, by a prior course of dealings.
Dr. Antonios E. Platsas
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Failing this a reasonable price will be implied dependant on the circumstances
of the case. In connection with the buyer's duty to pay for the goods under
SoGa s 27 reference must be made to the Late Payment of Commercial
Debts (Interest) Act 1998.
Mention must be made to the possibility of excluding liability for breach of any
of the duties imposed on the seller and buyer. The ability to limit or restrict
liability in a sale of goods contract is regulated primarily by the Unfair
Contracts Terms Act 1977, ss 6 & 7. This act states that the duty to pass
good title under Sec. 12 cannot be limited or excluded under any
circumstances. In relation to ss 13, 14 & 15, these terms cannot be excluded
or limited where the buyer deals as a consumer. In instances where the
buyer is not dealing as a consumer these terms can only be excluded if they
satisfy the test of reasonableness. See George Mitchell v Finney Lock Seeds,
AEG (UK) Ltd v Logic Resource Ltd (1996) CLC 265 and Unfair Terms in
Consumer Regulations Act 1999.
2.4 - Activities
Reading

Bradgate’s Commercial Law (3rd edn, Butterworths 2000), Chapters
9,10,11,14 or

Adams and MacQueen’s Atiyah’s Sale of Goods (12th edn, Longman 2010),
Chapters 8-18 or

MacKendrick’s Goode on Commercial Law (4th edn, Penguin 2010), Chapters
10, 11, 13 and 15.
In addition please read the following:

Ian Brown, ‘The scope of section 12 of the Sale of Goods Act’ LQR
1992, 108(Apr), 221-223 (Westlaw)
Abstract: s 12 Implied terms about title, etc.

Paul Robson & John N Adams, ‘Consumer sales’ JBL 1990, Sep, 433-437
(WestLaw)
Abstract: s 13 Sale by description.
Activity Number 1
Dimsight went to Optic, an optician, to purchase a new pair of spectacles. There was
a special promotion allowing anyone who bought any pair of spectacles for more than
£100 to get a second pair for free.
Dr. Antonios E. Platsas
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Dimsight bought one pair of spectacles for £110 and so was able to take
advantage of the special offer. When choosing the second free pair of
spectacles he asked for shatter proof plastic lenses. Dimsight was a regular
squash player and he intended to use the second pair for spectacles for
playing squash but did not tell Optic his reason for ordering them. Optic did
not himself make spectacles of this kind, but supplied the lens prescription to
Toughlens, a specialist manufacturer who manufactured the spectacles to the
prescription and then sent them to Optic who fitted them to Dimsight in
accordance with his usual practice. Before Dimsight ordered, Optic had
shown him the Toughlens brochure, which described their lenses as "ideal for
all kinds of sport". That statement is true to the extent that in the present state
of lens technology there is no better lenses and, provided the lenses are well
fitted to a rigid frame, they will withstand considerable pressure, but they will
shatter on a very hard impact. In fact the pair supplied to Optic had lenses
badly fitted to a rigid frame, this was not uncommon due to the present state
of the spectacle making industry. The bad fit was not readily discernable,
even to an expert, but it stressed the lenses so as to weaken them
considerably.
One day Dimsight was struck in the eye by a ball while playing squash. The
lens of his spectacles shattered and his eye was badly injured. An expert has
examined the remains of the spectacles and established that they were
weaker than they should have been because of the bad fitting, but he is not
prepared to say that they would have shattered anyway given the speed of
the ball and the force of the impact.
Advise Dimsight.
Activity Number 2
Victor operates a small independent dairy but has decided to cease business
frustrated at the increasing amount of EU regulations. He owns a Bedford
van, which he has used to make deliveries of milk and dairy produce, and
asks Simon, who sells light commercial vehicles, to sell it for him.
Paul has recently started a business manufacturing his own brand "Mister
Cream" ice cream and wants to purchase a van for use as an ice cream van.
He asks Arthur, a mechanic, to look out for a suitable van for him.
Arthur sees the Bedford van at Simon's premises but does not realise that it
belongs to Victor. He explains to Simon that he is interested in the van for
use as an ice cream van. Simon replies that he is "no expert" on ice cream
but advises that the Bedford has previously been used to carry dairy produce
and that he thinks it should be suitable. Arthur makes a cursory examination
of the van, which includes examining the engine, starting it up and driving it
around the block (a distance of about half a mile) and then agrees to buy it.
Simon asks him to sign a contract for the van, and produces a printed form
headed "Simon's Vehicle Sales: Vehicle Sale Contract "Arthur signs the form
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as "buyer" without reading it. He pays for the van with cash, withdrawn from
the bank by Paul for that purpose.
For the first month Paul uses the van for general purposes while he is setting up his
business. He does not use it to deliver ice cream during that time. The first time he
uses it on his ice cream round the engine over heats and seizes. Moreover he
discovers that the refrigeration plant, although suitable for keeping milk, cheese and
yoghurt chilled, is inadequate for keeping ice cream frozen and all of his stock of ice
cream melts. He is advised that the van will need expensive repairs to enable it to be
used on the road as a delivery van but cannot be used as an ice cream van without
replacement of the refrigeration unit and extensive modification. However, when he
complains to Simon, Simon denies all liability, claiming that Victor was the seller of
the van, that in any case he sold it to Arthur, and drawing Paul's attention to a clause
in the contract, signed by Arthur which states that:
“No warranty of quality or fitness for any purpose is given. Simon's Vehicle Sales
accept no liability for any defect in any vehicle supplied.”
Advise Paul.
Dr. Antonios E. Platsas