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Summary Passing of property and risk problem question information

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Walks you through how to answer a problem question inc: applying the correct cases, distinguishing from these, providing a balanced answer for higher marks, and applying the statutes in the correct order

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  • August 9, 2023
  • 4
  • 2022/2023
  • Summary

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s.18: rules of presumed intention


Problem Question

1. GrandGear Ltd is the creator of bespoke caravans and
purchases a large number of products from a variety of
different companies in order to manufacture these
caravans. Over the last six months GrandGear Ltd has
had difficulties with a number of the contracts that it has
entered into and it seeks your advice on its rights and
liabilities in the following (separate) situations:

(i) GrandGear Ltd entered into a contract with Clarkson
Enterprises Ltd for 4,000 tyres to be shipped to its
factory in Durham. Clarkson Enterprises Ltd selected
4,000 tyres from its large stocks, packaged up these
tyres into a large shipping container which had
GrandGear Ltd’s name, address and customer number
clearly visible on the outside. However, prior to being
loaded on to the ship in Southampton in order for the
container to be shipped to Durham, Clarkson
Enterprises Ltd went into liquidation.

GENERAL ISSUE: has there been an unconditional appropriation? [has
property passed?]

START: s.16: good must be ‘ascertained’ in order for the property to transfer from the
seller to the buyer [goods must be either identified or agreed at the time the contract
was made, or by actions undertaken after the contract was entered into
- prior to goods being ascertained, there is no propriety right [remedy available for a
breach of contract would only be damages]

THINK ABOUT: if they have been separated from the general stock
(i.e., labels etc), but are still in the same place
— London Wine: segregation… [e.g., if still on S’ property, might not be considered to be
properly severed] [certificate of ownership BUT no segregation in the store]
o But, even better than London Wine, presently: separate shipping container with
the name of the company on that separate container
o Thus, case is more in line with Re Stapleton Fletcher: there was a segregation.
Justified as property having passed [reasoning in this case is unusual – doesn’t seem
to follow the previous case law, + was before the reforms were introduced – case = a
gateway to the reforms] [bit more appropriation]
— Are labels and containers relevant to appropriation? Yes – appropriation has to be
irrevocable

6

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