27. Insurance

This chapter deals with insurance and the principles of insurance law. Contracts of insurance may be subdivided into two categories: indemnity insurance and contingency insurance. Under a contract of insurance, the event insured against is interpreted to be uncertain, either in the sense that it may or may not occur, or that the time of the occurrence is uncertain. This chapter first explains how insurance works, with a particular focus on insurable interest, the statutes that govern insurance contracts, and the power of the Financial Conduct Authority to authorise persons wishing to conduct business as insurers. It then considers how an insurance contract is formed and goes on to describe the content and interpretation of the contract. It also discusses the liability and rights of the insurer before concluding with an analysis of marine insurance and insurance claims.

24. Introduction

This chapter serves as an introduction to commercial credit and security. Credit plays an important role in the world of commerce. In the sale of goods, for example, the seller may have to borrow money from a bank so that he can obtain the buyer's order and supply the goods as required. The bank loan is a form of credit. This chapter first considers the definition of credit before discussing two forms of credit: loan credit and sale credit. It then examines the relevant provisions of the Consumer Credit Act 1974, the nature and purpose of security, real security and security interest, and quasi-security. It also describes the three stages involved in the process of creating an effective security interest: attachment, perfection, and priorities. Finally, it analyses the agreement to give security over future property and the proposed reform of the applicable law.

23. Receivables financing

This chapter focuses on the use of receivables for financing purposes. The term ‘receivable’ is a commercial expression referring to money that is receivable in the performance and discharge of a legal obligation. The terms ‘receivables’ and ‘book debts’ are often used interchangeably. However, ‘receivables’ is more broad than ‘book debts’: it includes book debts but is not limited to them. This chapter first considers the definition of ‘receivables financing’ before discussing financing by sale, either through factoring or block discounting. It then examines financing by secured transactions, along with other doctrines affecting assigned receivables such as the rule in Dearle v Hall. It also considers proposals to reform the law governing receivables and concludes with an analysis of international factoring.

17. Payment cards

This chapter focuses on the use of payment cards in commercial transactions. Contactless cards are becoming increasing popular and account for 49 per cent of all cards in issue. Contactless payment is made through the tap of a card on (or by waiving it over) a reader, without requiring a personal identification number or signature. With the increased availability of mobile payment technology, contactless payments are likely to shift from cards to smartphones. This chapter begins with a discussion of the main types of payment card in general circulation in the UK, including credit (and charge) cards, debit cards, and ATM cards. It then considers contractual networks and the regulation of contractual relationships, along with liability for unauthorised transactions under the Consumer Credit Act 1974 (CCA) and Payment Services Regulations 2009. It also describes connected lender liability under CCA.

15. International sales

This chapter examines the rules of English law governing international sales as they affect buyer and seller. There is more than one way in which a sale of goods contract may have an international element. For example, the seller and buyer may be in different jurisdictions, or the contract of sale may contemplate that the goods are to be carried from one country to another. A surprisingly large proportion of international trade is carried on under contracts governed by English law by choice of the parties. This chapter begins with a discussion of typical export transactions under INCOTERMS 2010, a set of international rules for the interpretation of trade terms promulgated by the International Chamber of Commerce. It then considers sales via sea carriage, along with other contracts involving international sales. It also analyses payment in international sales transactions and concludes with an overview of future prospects for international sales.

10. Transfer of title

This chapter examines the transfer of title from the seller to the buyer. It first provides an overview of the rule nemo dat quod non habet (‘no-one can transfer what he does not himself have’) before discussing various exceptions to the rule, including estoppel, sale under the Factors Act 1889, sale under a voidable title, sale by seller continuing in possession, and sale by buyer in possession. Other exceptions to the nemo dat rule include sale by unpaid seller under s 48 of the Sale of Goods Act 1979, private purchase of motor vehicle held on hire-purchase, and sale under general power of sale or court order.

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 the goods as between seller and buyer. Where the contract is an agreement to sell, and the property remains with the seller: the contract is still executory; the buyer has only rights in personam against the seller; the buyer's remedy against the seller, if he is in breach of contract, is for damages for non-delivery; the seller's remedy against the buyer, if he is in breach, is for damages for non-acceptance — the seller continues to be responsible for the goods (storage charges, disposing of them if perishable, etc). This chapter discusses the rules for determining when the property passes, 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 frustration of sale of goods contracts.

8. Introduction and definitions

This chapter serves as an introduction to the English law governing sale of goods, along with relevant definitions. Prior to 1893, the domestic sales law was almost entirely based on case law. There were a few statutory provisions, the two most important being the Factors Acts and s 17 of the Statute of Frauds 1677. In 1888 Sir Mackenzie Chalmers was commissioned to draft the bill that became the Sale of Goods Act 1893. This chapter discusses the relevant provisions of the Sale of Goods Act 1893 in relation to the general law, as well as its application to contracts for the sale of all types of goods. It also considers some key definitions relating to sale of goods and how sale of goods differs from other transactions such as barter or exchange, bailment, agency, and hire-purchase. Finally, it explains how a contract of sale is formed.

28. Insolvency

This chapter deals with insolvency and the principles of insolvency law. It begins with a brief historical background on the evolution of insolvency law, from the Bankruptcy Acts of 1883 and 1914 to the Insolvency Act 1986 and its amended versions, along with the Cross-Border Insolvency Regulations 2006. 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, as illustrated by the case British Eagle International Airlines Ltd v Cie Nationale Air France (1975). 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.

21. The financing of international trade

This chapter examines the methods used to finance international trade. There are a variety of ways to pay for goods sold under an international sales contract. The method chosen for any particular transaction will depend in large part on the seller's confidence in the integrity and solvency of the overseas buyer, as well as on the bargaining strengths of the respective parties. A new payment method called the Bank Payment Obligation (BPO) makes it possible for the seller to mitigate the risks of non-payment and insolvency associated with open account transactions. This chapter discusses documentary bills, documentary credits, standby credits, performance bonds, and guarantees. It also considers other financing methods such as forfaiting and financial leasing before concluding with an overview of export credit guarantees.