20. Cheques and miscellaneous payment instruments

This chapter focuses on the use of cheques and similar instruments as a mode of payment in commercial transactions, and discusses the relation between them and bills of exchange (of which they are a specialised type). Cheques are intended as instruments which will immediately be paid, whereas bills of exchange are typically drawn payable at a future date and used as a credit instrument. Unlike bills of exchange, cheques are not, and are not intended to be, accepted by the bank on which they are drawn. This chapter first explains what a cheque is, and discusses the likely future of the institution, before discussing promissory notes, banker’s drafts, and travellers’ cheques.

15. International sales

This chapter examines the rules of English law governing international commercial sales, a subject of disproportionate importance because of the surprisingly large proportion of international trade carried on under contracts governed by English law by choice of the parties. Contracts of this type expose the parties to greater risks than purely domestic sales. The chapter gives detailed coverage of typical export transactions and INCOTERMS, both marine and non-marine, including FOB contracts, FAS contracts, CIF contracts and variants of the CIF contract, and DAP contracts as well as FCA, CIP, and similar contracts. Likely future developments are also mentioned.

9. Passing of the property in the goods as between seller and buyer

This chapter examines the concept of the passing of the property in goods as between seller and buyer which has significance for many purposes in law. It discusses why the matter is important, before going on to cover the rules for determining when the property passes as it is plainly a matter of the greatest importance to identify the point at which it occurs. The chapter goes on to discuss the statutory provisions relating to perishing of specific goods, how the passing of property is related to acceptance or rejection of goods, the risk involved in the passing of property, and the frustration of sale of goods contracts.

6. Relations with third parties

This chapter examines how contracts made by the agent affect the legal relations of the principal with regard to third parties. When considering the rights and liability arising under a contract made by an agent, it is important to draw the distinction between whether the agent was acting for a disclosed or undisclosed principal, the latter being an important feature of English agency law largely unknown to civil lawyers. This chapter discusses generally the relations between principal and third party, and between agent and third party, in the context of both disclosed and undisclosed agency.

28. Insolvency

This chapter deals with insolvency and the principles of insolvency law. It begins with a brief historical background. It then considers the basic objectives of insolvency law as it relates to the bankruptcy of individuals and to corporate insolvency. In particular, it highlights the importance of the pari passu principle to ensure that all creditors participate on an equal footing in the estate in question. The chapter goes on to discuss the various definitions of insolvency before concluding with an overview of insolvency procedures for both individual insolvency and corporate insolvency.

25. Possessory security

This chapter deals with possessory security. It begins with a discussion of a pledge (which normally secures repayment of a debt but, in principle, there is no reason why it should not secure performance by the pledgor of some other obligation), before considering the concepts of delivery and re-delivery of possession. It also examines re-pledge by the pledgee, realisation, and statutory control before turning to liens. In particular, it explains how a lien arises and how it is enforced, terminated, and registered. Finally, it looks at the proposed legal reform with respect to possessory security.

19. Bills of exchange

This chapter focuses on bills of exchange, especially in the context of international trade. It first provides an overview of how bills of exchange are used as a method of payment before discussing the relevant provisions of the Bills of Exchange Act 1882. It then considers the definition of a bill of exchange, how a bill of exchange is transferred, and persons entitled to the benefit of the obligation on the bill. It also examines the general principles governing liability on the bill of exchange as well as the enforcement and discharge of the bill. Finally, it looks at mistaken payment, focusing on cases where the payment was received in good faith and in ignorance of the mistake.

11. Seller’s obligations as to quality

This chapter considers the seller’s obligations as to the characteristics and quality of goods sold. The main concentration is on the implied terms under ss 13–15 of the Sale of Goods Act 1979 requiring goods to correspond with their description, to be fit for purpose and of satisfactory quality, and to match any sample provided. But considerable stress is also laid on the vital practice of commercial parties to draft their own bespoke terms and oust those otherwise implied. The chapter also covers the contractual liability applying between seller and buyer.

5. Creation of agency, and the authority of the agent

This chapter focuses on the creation of the principal–agent relationship and the authority of the agency and the four ways of creating it: through an express or implied agreement between the principal and the agent; under the doctrine of apparent authority; by operation of law; and through ratification of an unauthorised agent’s acts by the principal. Agency arising out of agreement will always be consensual, but it need not be contractual. After explaining how the agency relationship is created, the chapter examines the authority of the agent such as actual authority, apparent authority, and usual authority.

3. Bailment

This chapter deals with bailment, defined as a transaction under which a bailee lawfully receives possession of goods from a bailor for some purpose. Examples of bailment from commercial law include warehousing, carriage, the deposit of property to have work done on it, leasing, and pledge. A buyer under a sale or return transaction is, pending acceptance or rejection, a bailee of the goods. After explaining what a bailment is, the chapter considers types of bailment and three requirements for a bailment: transfer of possession; ownership remaining in the bailor, or at least not passing to the bailee; and consent by the bailee. It then examines the bailee’s liability and the burden of proof with respect to bailment before concluding with an analysis of bailment involving third parties, focusing in particular on sub-bailment.