Question
Please help me answer the following Commercial Law problem question. I need to apply UK legislation/ Case law only. Astro Ltd is a supplier of
Please help me answer the following Commercial Law problem question. I need to apply UK legislation/ Case law only.
Astro Ltd is a supplier of leisure boats both to the retail trade and to the public. On Monday, Beta Ltd, one of Astro Ltd's regular suppliers, agreed to supply Astro Ltd with 15 carbon fibre racing kayaks on their normal credit terms. It was agreed that Beta Ltd would deliver the kayaks to Astro Ltd's premises the next day on board Beta Ltd's own delivery lorry and that property in the kayaks would pass only when the goods were delivered to Astro Ltd's premises. On Tuesday morning, Astro Ltd duly received an e-mail from Beta Ltd confirming that exactly 15 carbon fibre racing kayaks, duly packaged and labelled for Astro Ltd, were now in transit to Mavericks Ltd's premises. 'Beta' brand racing kayaks are currently in high demand and so later on Tuesday Astro Ltd agreed to sell to Copper Ltd, a leisure boat retailer, "the 15 Beta brand carbon fibre racing kayaks today being delivered to Astro Ltd by Beta Ltd," having already confirmed to Copper Ltd that such kayaks were in transit. When Beta Ltd's lorry later arrived at Astro 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 Astro Ltd. Astro 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 Copper Ltd. Copper Ltd is still insisting upon delivery. Astro Ltd had just one 'Jester' brand sailing dinghy left in stock. Delia, who owns a local sailing themed caf business, visited Astro Ltd's premises in order to inspect the Jester sailing dinghy. Delia intended to use the dinghy partly in order to promote her caf business and partly for her own private use. Delia's business is not a limited company. Delia agreed to purchase the Jester sailing dinghy and, as part of the deal, Astro Ltd agreed to fully dismantle the dinghy, in accordance with its intended design, in order to enable Delia to collect it in her van. Collection was arranged for the following week with payment to be made on delivery. Unfortunately, prior to collection of the Jester sailing dinghy, vandals broke into Astro Ltd's premises and badly damaged it. Astro Ltd had not yet dismantled the dinghy. Ten weeks ago, Astro Ltd bought a second-hand delivery lorry from Ewan for 15,000. The lorry proved to be expensive to run and so, four weeks after buying it, Astro Ltd sold it to Frank for 14,500. Frank is a regular customer of Astro Ltd and so was allowed to pay for the lorry by cheque. Astro Ltd has now been informed by its bank that Frank's cheque has been dishonoured. Astro Ltd has also now discovered that Ewan did not own the lorry when he sold it. Ewan had taken the lorry on hire-purchase from Goolish Finance Ltd, and had paid only three of the 36 instalments payable before disappearing. Upon discovering that the cheque had been dishonoured, Astro Ltd demanded the return of the lorry from Frank. Frank explained that he had severe financial difficulties and could not afford to pay for the lorry. Despite this, Frank then proceeded to sell the lorry to Hart Ltd, a haulage company. The sale was, very unusually, concluded in the car park of a motorway service station with Hart Ltd paying in cash and taking immediate delivery. Hart Ltd has used the lorry extensively in the last few weeks. Astro Ltd's sales representative recently visited the business premises of Isla who owns an outdoor leisure business. Isla had explained in advance of the visit that she would be out of the country but that her new manager, Jacky, would be in charge of the business.
Jacky asked Astro's sales representative whether Astro Ltd would be able to supply three sailing dinghies to Isla's business at a discounted price. Astro Ltd's sales representative was very surprised to be asked this as Isla had recently made it clear to Astro Ltd that in future she would be focusing her business upon kayaks and canoes. When Astro Ltd's sale representative explained this to Jacky, Jacky confirmed that Isla had personally approved the purchase of the three sailing dinghies and so the sale then went ahead. In fact, Jacky had completely misunderstood Isla's instructions because Isla had clearly told Jacky 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 Astro Ltd but Isla is refusing to be bound by the purchase. Astro 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, Astro Ltd purchased five professional racing canoes from Kingston Ltd for 3,000 each. The canoes were made from a special composite material designed to significantly improve their agility. Kingston Ltd was therefore aware that Astro Ltd intended to resell the canoes for professional use, although Kingston Ltd was also clear that Astro Ltd had no particular customers in mind when purchasing them. In fact, Astro Ltd retained the professional racing canoes for six months before finally selling them to Lampel Ltd, a company which hires out canoes to both professional and amateur canoeists, although Lampel Ltd had made it clear that it wanted these canoes for professional use. Lampel 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, Lampel Ltd is keen to remain on good terms with Astro 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 Astro Ltd. Astro Ltd is nevertheless demanding compensation from Kingston Ltd.
Advise Astro Ltd and Hart Ltd as to their respective rights and liabilities in the above circumstances. (Please note that you are not required to advise Astro Ltd in respect of its claim against Beta Ltd).
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