BTB1010 Final: Commercial-Law-Notes
Commercial*Law*
MLL215*
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MLL215*–*Commercial*Law*
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! PART*I:*AGENCY………………………………………………………..10*
!"The"nature"of"agency"
!"The"agent’s"authority"
!"The"rights"and"obligations"of"principal,"third"party"and"agent"
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! PART*II:*SALE*OF*GOODS……………………………………………29*
!"Contracts"for"the"sale"of"goods"
!"Transfer"of"property"under"the"Goods"Act"
!"Implied"terms"under"the"Goods"Act,"Trade"Practices"Act"and"Fair"Trading"Act"
!"Performance"and"remedies"
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! Part*III:*STATUTORY*UNCONSCIONABILITY…………………62*
!"Statutory"Unconscionability"
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! PART*IV:*INSURANCE………………………………………………….63*
!"The"concept"of"insurance"and"the"insurance"industry"
!"Pre"Contractual"issues:"The"contract"of"insurance"!"formation"and"pre!
contractual"misrepresentation"and"non!disclosure"
!"Post"Contractual"issue:"The"contract"of"Insurance"!"construction,"performance"
!"Insurance"intermediaries!
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Revision!Summary!Notes!
When!answering!questions,!use!the!three!step!approach.!!
1)!Always!start!answers!with!“the!first!issue!is….”.!!
2)!Once!the!issue!is!established,!you!then!find!the!apppropraite!law!!
3)!Apply!the!law!to!resolve!that!issue!
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4*Topics*
! Agency!
! Sale!of!Goods!
! Unconscionability!
! Insurance!
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1.!AGENCY!
If!an!agent!acts!within!his/her!authority,!the!agent!will!bind!the!principal!to!a!third!
party.!You!then!have!to!ask,!how!much!authority!does!the!agent!have?!
Agency!can!be!created!in!three!ways:!
1) Actual!agreement.!The!amount!of!authority!the!agent!has!is!what!is!what!is!specified!
in!that!agreement.!Plus!the!agent!has!all!that!authority!which!can!be!implied!in!that!
actual!agreement.!!
2) An!agency!can!be!created!by!estoppel!(meaning!ostensible!or!apparent).!It!is!the!
principal!who!makes!a!representation!to!a!third!party!that!A!is!his!or!her!agent.!!
Some!examples!of!representations!can!include:!
" When!the!principal!states!that!X!is!their!agent.!
" If!the!principal!arms!the!agent!with!some!form!of!indicators!that!A!is!his!agent.!
For!instance,!the!principal!may!give!the!agent!a!title!(managing!director),!give!
them!stationary,!business!cards!etc.!
It!is!not!enough!for!the!agent!to!make!the!representations,!it!must!be!the!principal.!
However,*if*the*agent*is*making*representations*to*the*third*party*and*the*principal*
knows*that*the*agent*is*making*these*representations*and*does*not*put*a*stop*to*
them.*Those*agent’s*representations*in*fact*become*the*principal’s*representations.**
Document Summary
When!does!ownership/property!in!goods!pass: irrespective!of!what!the!parties!intentions!are,!where!the!contract!is!one!for!the!sale! of! unascertained! goods,! no! ownership! will! pass! to! the! buyer! unless! and! until! the! goods!are!ascertained. ! Act: section*22!says:!when!the!goods!are!in!fact!ascertained!the!rule!is!the!property!in! those! goods! is! transferred! to! the! buyer! when! the! parties! intend,! property! or! ownership!is!to!be!transferred. !what!is!the!intention!of!the!parties, sometimes!however,!the!parties!don"t!express!an!intention!as!to!when!property!or! ownership!of!goods!is!to!pass,!nor!is!it!clear!from!the!contract!or!circumstances!of! the! case. Section* 23! sets! out! five! rules! as! to! when! property/ownership!in!goods!is!to!pass. !mustknowtheserules,especiallyrule5. * you* cannot* transfer* what* you* don"t* own". ! The! first! exception! to! this! is! found! in! s27! itself,! and! that! is! if! the! true! owner! is! precluded!from!denying!the!sellers!right!to!sell. Section!71,!which!says!a!party!can!have!an!exclusion!clause!to!wipe!out!these!implied! terms: if!the!goods!are!commercial!goods,!the!goods!act!applies. , if!the!goods!are!consumer!goods,!either!the!tpa!or!the!fta!will!apply, which!of!the!two!will!it!be?!if!the!defendant!was!a!corporation! (pty!ltd)!it!is!the!tpa! that!applied,!if!the!defendant!is!a!natural!person!the!fta!will!apply. One! party! is! to! be! suffered! from! a! special! disability,! the! other! party! of! the! contract! exploits! that! disability! by! making! a! contract! very! much! in! its! favour,!which!good!conscious!would!say!that!it!shouldn"t!be!upheld. Under! equity,! if! unconscoinability! is! proven,! the! contract! is! said! to! be! voidable,! which! means!the!innocent!party!can!rescind!the!contract. !but!that!right!can!also!be!lost. 51(a)(a)! is! a! statutory! version! of! the! armadio! principle. ! S51(a)(b)! and! s51(a)(c)! talks! about! corporations! not! acting! with! good! conscious. ! Every! contract! of! insurance! is! one! involving! utmost! good!faith!on!the!part!of!both!parties.
