Commercial Transactions



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Commercial Transactions

  • This presentation and Copyright therein is the property of Maureen Noonan and is prepared for the benefit of students enrolled in the Commercial Transactions course conducted by the Law Extension Committee and is available for their individual study. Any other use or reproduction, including reproduction by those students for sale without consent is prohibited.

Expectations?

  • After study of this module, students should be able to
  • Have a clear understanding of what “possession” is, and when it is relevant in our course and to outcomes.
  • Resolve problems featuring bailment by:
    • Understanding what Bailment is
    • Distinguishing it from other arrangements e.g. sale, licence.
    • Working out the extent of duties of Bailor and Bailee in various situations.
    • Analysing interaction with contract-contractual bailment, (especially limitation/exclusion clauses and comparing remedies available)-and with Statute.
    • Identifying the existence of any sub bailment and issues arising. E.g. are terms of sub-bailment binding on Bailor?

Possession

  • Elements of possession? Intention to exclude others, control, exclusivity.
  • Distinguish from ownership or other rights

Relevance of possession

  • Evidence of ownership-conclusive in absence of evidence to the contrary
  • Finders Keepers-possession can ripen into ownership
  • Gifts-evidence of delivery?
  • Trespass, Conversion, Detinue-interference with possession
  • Bailment-gives rise to duties of care
  • Contractual arrangements e.g. hiring, leases
  • Security over personal property-pledges, liens in possession
  • Statutory interpretation e.g. s.28(2) SOGA and definition of “delivery” in s. 5 discussed in Gamer’s Motor Centre (Newcastle) P/L v. Natwest Wholesale Australia P/L (1987) 163 CLR 236.
  • Concept of Delivery

Issues relating to Possession

  • Actual and constructive possession
  • Can we possess an intangible item of personal property, or is possession a relationship between a person and a thing only? Can we merely control intangibles? Consider information….are we only in possession of it? E.g. confidential information…or, do we own it?...has it become part of our store of knowledge free of any restrictions?

Possession

  • We will focus on tangibles for the time being.

Bailment

  • “Bailment is one of the commonest transactions of everyday life. Its breadth and diversity are enormous. And yet it is unknown to nonlawyers, and often neglected by lawyers ….”
  • Palmer on Bailment (Sweet & Maxwell)

BAILMENT

  • BAILMENT
  • A BAILMENT IS FORMED
  • BY DELIVERY
  • OF PERSONAL PROPERTY
  • WITHOUT TRANSFER TITLE
  • BY BAILOR
  • TO BAILEE
  • USUALLY UNDER AGREEMENT
  • (NOT NECESSARILY CONTRACT)
  • FOR PARTICULAR PURPOSE
  • GIVING RISE TO DUTY OF CARE
  • UPON COMPLETION PURPOSE
  • BAILEE IS OBLIGED
  • TO RETURN BAILED PROPERTY
  • (OR DEAL WITH IT AS DIRECTED)

BAILMENT

  • BAILMENT
  • CLASSIFICATIONS
  • Lord Holt in Coggs v. Bernard (1703) 2 Ld Raym909;
  • 92 ER 107
  • 1. The deposit of goods for gratuitous safekeeping by the bailee.
  • 2. The delivery of goods to a bailee for work to be done on the goods for the benefit of the bailor without reward.
  • 3. The delivery of goods by way of gratuitous loan for use by the bailee.
  • 4. The deposit of goods for safekeeping for reward.
  • 5. The delivery of goods to have something done to them for reward.
  • 6. The delivery of goods for use by the bailee for reward (hiring).
  • 7. The delivery of chattels to be held as security for a loan.

BAILMENT

  • BAILMENT
  • DOMESTIC EXAMPLES
  • DRY CLEANING
  • CAR REPAIRS
  • USING A SUPERMARKET TROLLEY
  • LENDING A FRIEND SOMETHING
  • YOUR CAR / A BICYCLE / COAT / JEWELLERY / GARDENING TOOLS
  • HIRING A CAR/SKIS/BOAT/JETSKI

BAILMENT

  • BAILMENT
  • COMMERCIAL EXAMPLES
  • Contracts for HIRE
  • FLOORPLAN ARRANGEMENTS with Dealers
  • Sales with title Retention Clauses where delivery made/possession given to buyer.
  • TAXI operation
  • Couriers, CARGO SHIPMENT
  • STORAGE/WAREHOUSE Arrangements

BAILMENT

  • BAILMENT
  • DISTINGUISH BAILMENT
  • FROM
  • CONTRACT
  • Consideration
  • Involuntary possession
  • LICENCE
  • Who has possession? Control? Actual v. constructive?
  • Ashby v. Tolhurst
  • Council of the City of Sydney v. West
  • Walton Stores v. Sydney City Council
  • GIFT

Contract and Bailment as separate arrangements

  • Brambles Security Services Ltd v. Bi-Lo P/L
  • (1992) Aust Torts Report
  • Contract between Bi Lo store and security company, which had arranged, (with knowledge of Bi-Lo) to have some collections made by Brambles.
  • Brambles collected money but failed to carry cash safely to owners bank or in accordance with instructions.
  • Brambles liable to Bi Lo in bailment, not contract. Contract was with the other security company.
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