Maverick Ltd is a supplier of leisure boats both to the retail trade and to the public.

On Monday, Cruise Ltd, one of Maverick Ltd's regular suppliers, agreed to supply Maverick Ltd with 15 carbon fibre racing kayaks on their normal credit terms. It was agreed that Cruise Ltd would deliver the kayaks to Maverick Ltd's premises the next day on board Cruise Ltd's own delivery lorry and that property in the kayaks would pass only when the goods were delivered to Maverick Ltd's premises.

On Tuesday morning, Maverick Ltd duly received an e-mail from Cruise Ltd confirming that exactly 15 carbon fibre racing kayaks, duly packaged and labelled for Maverick Ltd, were now in transit to Mavericks Ltd's premises. 'Cruise' brand racing kayaks are currently in high demand and so later on Tuesday Maverick Ltd agreed to sell to Viper Ltd, a leisure boat retailer, "the 15 Cruise brand carbon fibre racing kayaks today being delivered to Maverick Ltd by Cruise Ltd," having already confirmed to Viper Ltd that such kayaks were in transit.

When Cruise Ltd's lorry later arrived at Maverick Ltd's premises it was found to contain just 12 carbon fibre racing kayaks. It has now been established that the missing three kayaks were stolen from the lorry when the driver stopped for a rest break on the way to Maverick Ltd. Maverick Ltd has accepted delivery of the remaining 12 kayaks but now wishes to sell these to another retailer who is willing to pay a higher price than Viper Ltd. Viper Ltd is still insisting upon delivery.

Ten weeks ago, Maverick Ltd bought a second-hand delivery lorry from Tom for £15,000. The lorry proved to be expensive to run and so, four weeks after buying it, Maverick Ltd sold it to Charlie for £14,500. Charlie is a regular customer of Maverick Ltd and so was allowed to pay for the lorry by cheque. Maverick Ltd has now been informed by its bank that Charlie's cheque has been dishonoured. Maverick Ltd has also now discovered that Tom did not own the lorry when he sold it. Tom had taken the lorry on hire-purchase from Iceman Finance Ltd and had paid only three of the 36 instalments payable before disappearing.

Upon discovering that the cheque had been dishonoured, Maverick Ltd demanded the return of the lorry from Charlie. Charlie explained that he had severe financial difficulties and could not afford to pay for the lorry. Despite this, Charlie then proceeded to sell the lorry to Topgun Ltd, a haulage company. The sale was, very unusually, concluded in the car park of a motorway service station with Topgun Ltd paying in cash and taking immediate delivery. Topgun Ltd has used the lorry extensively in the last few weeks.

Maverick Ltd's sales representative recently visited the business premises of Penny who owns an outdoor leisure business. Penny had explained in advance of the visit that she would be out of the country but that her new manager, Amelia, would be in charge of the business.

Amelia asked Maverick's sales representative whether Maverick Ltd would be able to supply three sailing dinghies to Penny's business at a discounted price. Maverick Ltd's sales representative was very surprised to be asked this as Penny had recently made it clear to Maverick Ltd that in future she would be focusing her business upon kayaks and canoes. When Maverick Ltd's sale representative explained this to Amelia, Amelia confirmed that Penny had personally approved the purchase of the three sailing dinghies and so the sale then went ahead. In fact, Amelia had completely misunderstood Penny's instructions because Penny had clearly told Amelia not to purchase any more sailing dinghies even if they were available at a discounted price.

The three sailing dinghies have now been delivered by Maverick Ltd but Penny is refusing to be bound by the purchase. Maverick Ltd was able to discount the price of the sailing dinghies because they were end of season models and so their resale price has now dropped even further.

Twelve months ago, Maverick Ltd purchased five professional racing canoes from Wolfman Ltd for £3,000 each. The canoes were made from a special composite material designed to significantly improve their agility. Wolfman Ltd was therefore aware that Maverick Ltd intended to resell the canoes for professional use, although Wolfman Ltd was also clear that Maverick Ltd had no particular customers in mind when purchasing them. In fact, Maverick Ltd retained the professional racing canoes for six months before finally selling them to Hangman Ltd, a company which hires out canoes to both professional and amateur canoeists, although Hangman Ltd had made it clear that it wanted these canoes for professional use. Hangman Ltd then reported that due to a defect in the material used to construct the canoes they lacked the speed required for professional use. This defect could not have been detected in advance. As a result, the five canoes are together worth just £7,500.

However, Hangman Ltd is keen to remain on good terms with Maverick Ltd. They are therefore happy to hire out the canoes solely for amateur use and have confirmed that they will not be bringing any claims against Maverick Ltd. Maverick Ltd is nevertheless demanding compensation from Wolfman Ltd.

 Advise Maverick Ltd and Topgun Ltd as to their respective rights and liabilities in the above circumstances. (PLEASE NOTE THAT YOU ARE NOT REQUIRED TO ADVISE MAVERICK LTD IN RESPECT OF ITS CLAIM AGAINST CRUISE LTD).
- this is for commercial law (UK)