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Extra resources for Commercial Lawcards 6 e: Seventh Edition
D) If any part payment and the proceeds of resale are together less than the original purchase price agreed by the buyer, the buyer is liable to the seller for the shortfall (in example 4, £1,000) – though the seller will be an unsecured creditor as to this shortfall. You should now be confident that you would be able to tick all of the boxes on the checklist at the beginning of this chapter. To check your knowledge of Passing of property and risk why not visit the companion website and take the Multiple Choice Question test.
The court disagreed. Relevance If, unknown to the parties, there is actually no subject matter because it has perished prior to the contract, there can be no contract. This case inspired s 6. EVENTS BEFORE THE CONTRACT IS MADE: s 6 MISTAKE In the case of a contract for the sale of specific goods, if the goods have, unknown to the seller, perished before the contract is made, the contract is void (s 6). This is no more than what the rule would be at common law. Because the contract is concerned with the sale of something which, unknown to the parties, does not exist, it is a contract about nothing.
37 14:15:11:03:08 Page 37 Black 3272CVC Page 38 Black 3272CVC CONTRACT TERMS AS TO TITLE IMPLIED WARRANTIES – s 12 OF THE SALE OF GOODS ACT 1979 There are also two implied warranties in s 12 that: ■ the goods are free from encumbrances not disclosed or known to the buyer before the contract is made; and ■ the buyer will enjoy quiet possession of the goods, apart from disturbance by virtue of any charge or encumbrance disclosed or known to the buyer when the contract was made. If one of these terms is broken, the buyer may not reject the goods but may sue for damages.