Commercial Law: Analysis of Sale of Goods and Misrepresentation Issues

This report provides a comprehensive analysis of a commercial law case concerning the sale of a rugby ball, focusing on the application of the Sale of Goods Act 1979 and the Misrepresentation Act 1967. The case involves a seller (Warren) who is defrauded by a buyer (Bill) misrepresenting his identity and failing to pay for the ball. The report examines the legal principles of contract formation, the rights of an unpaid seller, and the concept of title to goods. It further discusses the implications of misrepresentation and how it affects the transfer of ownership. The analysis includes relevant case law, such as Car & Universal Finance v Caldwell and Shogun Finance Ltd v Hudson, to support the arguments. The report concludes that Warren has grounds to recover the ball from the current possessor (Dickie) due to the fraudulent nature of the initial transaction and the misrepresentation involved. The report also outlines the potential liabilities of Bill and the remedies available to both Warren and Dickie under commercial law.

Commercial Law

Table of Contents
Introduction......................................................................................................................................1
Issue.................................................................................................................................................1
Rule..................................................................................................................................................2
Application.......................................................................................................................................3
Conclusion.......................................................................................................................................4
References........................................................................................................................................5

Introduction
Contracts are made by providing explicit terms in the agreement made between the
parties which specifies the terms that are mentioned and agreed either in oral or in written form.
Commercial law was formed by passing the amalgamating Sale of Goods Act 1979 and the
second step that helped it in coming to force is statutory implied terms regarding the quality and
fitness for the supply of goods as well as contract of sale. Here case of Warren has been seen
where he has lost his ball due to the misrepresentation of party to the contract and know he wants
his ball back or at least the consideration for the ball that he had sold. The provisions of sale of
goods act would be introduced which will help him getting the consideration or the ball back to
him.
Issue
In the present case, it is given that a person named Warren is a keen follower of rugby
and a Wales supporter. He owns a rugby ball which is signed by first team to win a “Grand slam”
in 1908. The ball is now worth around £10,000. He advertised for the ball in rugby times and
found a person interested to buy the ball. He was offered £8,000 by a person pretending to be
Gareth Hayward. The buyer requested that ball to be first sent to him so that he can verify about
the sign being original or not 1. Further the seller received a letter containing expression of
receiving the ball as well as consideration in form of cheque. After he got to know that the
cheque was dishonoured. On knowing this he tried to get in contact with Gareth, the buyer, he
got to know that no person named live on that address.
Finally, Bill met a person named Robin and made a shady agreement with him to sell the
ball at a price of £2,000 in cash which Bill accepts.
Few days later Robin visits Dickie at Dickie's shop who used to sell sporting
memorabilia. Dickie find it as impressive and buys it for £2,500 which is settled by a cheque
which was honoured later on.
Warren got to know that the ball is in the possession of Dickie, now Warren wishes to
recover the ball.
1 Baase, Sara. A gift of fire (Pearson Education Limited 2012).
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Rule
A contract of sale of goods is an agreement through which the seller sells or agrees to sell
the property in possession to him/her to the buyer for a consideration which is called as price.
Sale is supposed to take place when an agreement of sale of property in goods is transferred from
seller to the buyer.
The following conditions are essential for contract of sale to take place which includes,
the conditions as to title, sale must be as per the description of the good provided to the person, if
the buyer demands for sample then if possible the sale must be done through sample.
It is the implied terms of the contract that where there is a contract of sale applies seller
has a right to sell the goods and in case of future agreement of sell he will have such right at the
time when the possession has to be later on passed 2.
Under the sale of goods act, the unpaid seller is defined as the condition where whole of
the price of the goods has not been paid or tendered. The rights that are available to the unpaid
seller is that Warren can ask for a lien on the goods or the right to retain the possession on the
goods. Where the buyer of the goods further sells the goods and the unpaid seller right of lien or
stoppage in transit is not affected by any sale 3. The sale of goods act 1979 provides the seller
the remedy to take action for the price unpaid to him, where under the contract of sale the
property in goods has passed to the buyer and he intentionally has neglected or has refused to
pay for goods purchased then the seller can demand an action against the buyer.
Where the goods are sold by the person who is not the owner of the goods then the buyer
of the goods also does not have a better title than what the seller had. The goods so stolen reverts
to the person who was the owner of the goods, whether by sale in market. Where the goods have
been obtained by fraud or other wrongful means not amounting to theft, the possession in such
goods shall revert to the person who was the actual owner of the goods. This is given in the case
of section 27 which deals with the sale by a person who is not the owner.
Section 27 (1) of sale of good act specifies that,Where goods have been stolen and the
offender is prosecuted to conviction, the property in the goods so stolen reverts in the person
2 Benacchio, Gian Antonio. The harmonization of civil and commercial law in Europe
(Central European University Press 2015).
3 Duffy, John, and Richard Hynes. "Statutory Domain and the Commercial Law of
Intellectual Property." (Va. L. Rev. 102 2016)
2

who was the owner of the goods, or his personal representative, notwithstanding any
intermediate dealing with them.
Also section 27(2), defines that notwithstanding any enactment to the contrary, where
goods have been obtained by fraud or other wrongful means not amounting to theft, the property
in such goods shall not revert in the person who was the owner of the goods, or his personal
representative, by reason only of the conviction of the offender.
The present case scenario is also related with the fact of Misrepresentation Act 1967,
damages for misrepresentation includes that where a person has entered into a contract after a
misrepresentation has been made to him by any other person and as a result of this he has
suffered loss, then the person making the misrepresentation would be liable to damages, the
misrepresented party would be given the time to prove the facts that he believed were true.
Application
As given in the present case, it is shown that Warren has sold the ball to bill who
misrepresented himself as Gareth Hayward which is one of the descendant of signatories who
signed the ball 4. He further got to know that the address and the contact number that has been
given was also wrong and belonged to some other individual. After taking the help of British
Rugby Union association, they identified that the final owner of ball was Dickie who has started
his business of selling sports material and had a very less experience in the field of selling the
used goods or the second hand goods.
In this case, the rules of sales of goods act 1979 applies as where there is a contract of
sale made between the parties and the seller and the buyer had accepted for the same. The price
and the consideration for the goods has also been defined in the contract of sale. But the buyer
has not been able to pay the price to the seller and has misrepresented Warren 5. As the seller has
re-sale the good to another buyer and was not having a good possession so he would the buyer
would also have the same title of goods as the subsequent seller had. The first seller has the full
right to use the condition of lien of the goods and to obtain the goods from the final buyer. It is
also given in the sale of goods act that person who has purchased the goods from the person who
4 Gillespie, John. Transplanting Commercial Law Reform: developing a'rule of law'in
Vietnam (Routledge 2017)
5 Hanrahan, Pamela, Ian Ramsay, and Geofrey Stapledon. "Commercial applications of
company law." (2013).
3

is already misrepresenting would be liable to return the goods to actual seller being on the
approval of first seller.
As it was decided in the case of Car & Universal Finance v Caldwell [1965] 1 QB 525
it was decided that Caldwell sold his car to Norris. The cheque was dishonoured when it was
presented the next day. Subsequently Norris sold the car to X who sold it to Y who sold it to Z
who sold it to the plaintiffs. In inter pleader proceedings one of the issues to be tried was whether
the defendant’s conduct and representations amounted to a rescission of the contract of sale. As it
had been avoided before the sale to the third party, no title was passed to them and the owner
could reclaim the car or the difference money.
Also in the case of Shogun Finance Ltd v Hudson [2003] UKHL 62 It was decided by
the court that under section 21(1) of the Sale of Goods Act 1979, the title of the vehicle Is with
Shogun’s as there had been no consideration on Shogun’s part for the vehicle, as the vehicle was
subject to the terms of the hire purchase agreement. Hence, Hudson could not have acquired a
title from the fraudster as he never owned the vehicle. Therefore, as there was no agreement or
hire purchase between Shogun and the fraudster, the fraudster could not have passed a possessive
title to Hudson, as he never had one. Hudson was required to return the car to Shogun.
Conclusion
From the above report it has been analysed that, Warren can demand for his ball from
Dickie as he has obtained the ball under misrepresentation from the Gareth. As Bill has
misrepresented Warren and has not paid the actual amount to Warren. Bill was in practice of
cheating people and was doing frauds since long. He also entered into a shady contract with
Robin who further sold the ball to Dickie6. As the contract was already made through
misrepresentation of the fact and was also done as a shady contract. So Warren has an option to
demand for getting the ball back from Dickie. Whereas Dickie has the right to sue Robin for
doing fraud to him and can demand the compensation from him for the money paid to Warren.
Also Bill would be liable under civil prosecution and would also be liable to pay the
compensation to Warren and Dickie.
6 Shilliam, Robbie. "Forget English freedom, remember Atlantic Slavery: Common law,
commercial law and the significance of slavery for classical political economy." (New Political
Economy 17.5 2012): 591-609.
4

References
Books and Journal
Baase, Sara. A gift of fire (Pearson Education Limited 2012).
Benacchio, Gian Antonio.The harmonization of civil and commercial law in Europe (Central
European University Press 2015).
Duffy, John F., and Richard Hynes. "Statutory Domain and the Commercial Law of Intellectual
Property." (Va. L. Rev. 102 2016)
Gillespie, John. Transplanting Commercial Law Reform: developing a'rule of law'in Vietnam
(Routledge 2017)
Hanrahan, Pamela F., Ian Ramsay, and Geofrey P. Stapledon. "Commercial applications of
company law." (2013).
Shilliam, Robbie. "Forget English freedom, remember Atlantic Slavery: Common law,
commercial law and the significance of slavery for classical political economy." (New
Political Economy 17.5 2012): 591-609.
Whaley, Douglas J., and Stephen M. McJohn. Problems and materials on commercial law.
(Wolters Kluwer Law & Business 2016).
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