Write a critical analysis of the case of Rowland

Write a critical analysis of the instance of Rowland v Divall ( a instance appertaining to the Gross saless of Goods Act ) ( 2500 words )

Rowland V Divall( 1923 ) was a seminal instance in the country of the sale of goods, and in peculiar in the country of redresss for the purchaser. The facts of the instance must briefly be outlined in order to measure the facets of it. The instance was concerned with the sale by the suspect to the complainant of a auto. The complainant was a car-dealer. As such, the complainant later sold the auto on to R in July 1922 ( holding purchased it from the suspect in May of that twelvemonth ) . in September, the constabulary took ownership of the auto on the footing that it had been stolen belongings before even go throughing to the suspect. The complainant so brought an action against the suspect to retrieve the money he had paid for the auto. It was held that the suspect was in breach of the status to be implied under subdivision 12 ( 1 ) of theSaleof Goods Act 1893into contracts for the sale of goods that stated that the marketer had the right to sell the goods to the purchaser. On this footing, the complainant was entitled to win, despite the fact that the complainant had had ownership of the auto for over two months ( between May when he purchased it from the suspect and July when he sold it on to R ) . Furthermore, it was found that it did non count that the complainant was unable to return the auto to the suspect because the suspect had no right to the ownership of the auto.

The cardinal component of the facts of the instance, so, that allowed the complainant to win in retrieving the value of the consideration he had paid for the auto, related to the 19th centurySaleof Goods Act 1893. the relevant subdivision of that Act survived, significantly, to do it into the 20th century replacement to this Act, theSaleof Goods Act 1979. Section 12 ( 1 ) of that Act implied a term into all contracts for the sale of goods that stated the marketer had good rubric to the goods which were being sold. This is, of class, an indispensable protection for purchasers of goods. It is self-evidently a reasonable province of the jurisprudence to protect purchasers in this regard, as it encourages assurance that after one has purchased goods, events such as those outlined in this instance will non later occur. It instils a degree of assurance which is indispensable to underline effectual trade.

Part of the significance of Rowland v Divall, nevertheless, was exactly that it clarified this legal place, as this was the first clip a instance of this nature had come to the higher tribunals. In the words of Bankes LJ, “whatever uncertainty there may hold been as to the legal place of a individual in the place of the complainant in this instance was settled by the passing of the Sale of Goods Act 1893…” Bankes LJ besides made a mention to the fact that the implied term of the contract was to be considered a term unless and until something happened to alter that status into a guarantee. This is important because of the different redresss available for breach of contract and breach of guarantee. Briefly, had the tribunal found that something had occurred to do the implied term go a guarantee, it is improbable that the complainant would hold been able to retrieve the full value of the consideration without returning the auto.

How would a status such as the implied term under subdivision 12 ( 1 ) of the Act be changed into a guarantee? This is described in subdivision 53 of the same Act, and attending was drawn to it by Bankes LJ. The subdivision provides that “Where there is a breach of guarantee by the marketer, o where the purchaser elects, or is compelled to handle any breach of a status on the portion of a marketer as a breach of guarantee, the purchaser is non by ground merely of such breach of guarantee entitled to reject the goods ; but he may … ( B ) maintain an action against the marketer for amendss for breach of warranty.” The significance of this to the present instance is that the defendant’s statement entailed, in portion, proposing that the purchaser should be forced to handle the status as a guarantee because he had used the auto in the two month period between May and July.

This statement was based on assorted common jurisprudence governments, including the instance ofTaylor V Hare( 1805 ) , in which the complainant was seeking to retrieve the money he had paid for the usage of a patent on evidences of entire failure of consideration ( which was besides the instance inRowland V Divall) . In the earlier instance, the patent in inquiry was null, and as such the complainant obtained no benefit under it. Significantly, though, the tribunal in that instance stated that in instances pf purchase of a patent, the rule of caution buyer applied, and at that place was therefore no defense mechanism to the purchaser. This was because the seller did non justify the patent, taking the tribunal to see the seller and the complainant as “joint adventurers in relation to the patent” ( quoted by Bankes LJ ) . As such, harmonizing to the justice in that instance, Heath J ( and once more quoted by Bankes LJ ) , “there ne’er has been a instance, and at that place ne’er will be, in which a complainant, holding received benefit from a thing which has afterwards been recovered from him, has been allowed to keep an action for the consideration originally paid.” In that instance, it was found that there was non a entire failure of consideration ; instead the complainant had received some benefit, and some portion of what he had bargained for.

This, so, was the difference between this earlier instance andRowland V Divall. In the latter, in the position of Bankes LJ, the complainant received nil, and no portion of what he had bargained for. This was held despite the fact that the auto in inquiry had physically been handed over to the complainant, because the suspect had non had the power to make so. It was this consideration that led Bankes LJ to ignore the defendant’s statement that the complainant had made usage of the auto in the intervening period. On this footing, it was held that the territory justice had been incorrect to propose that the complainant should action in amendss.

What is so important about this instance? The judgement of the tribunal has been controversial in the old ages since its bringing, and at that place hold even been moves to change the jurisprudence in this country statutorily. The instance remains good jurisprudence, nevertheless, and has non yet been superceded. Possibly the chief issue of contention with respect to the judgement lies in relation to the modern construct of unfair enrichment, and the relationship of this with the buyer’s right to recovery. The trouble is evident if one considers the purchaser ( the complainant in the present instance ) is able to retrieve the full monetary value paid irrespective of any extra intervening benefit received by the purchaser. This appears to propose that the complainant, but acquiring back the full monetary value he paid for the auto is being unjustly enriched at the disbursal of the marketer.

The tribunal, inRowland V Divall, approached this job as follows. Section 12 of the Act was analysed in a manner that was expressed by Scrutton LJ as holding the undermentioned consequence: “When one time one gets a status, and that status is broken, the contract can be rescinded, and with the recission of the contract, one can demand the return of the purchase money.” The significance of this is that the Sale of Goods Act 1893 ( and its subsequent passage ) altered the old state of affairs at common jurisprudence. This was that the seller did non justify to hold good rubric to the goods which he purported to sell, except in particular instances. The Act, nevertheless, in the words of Scrutton LJ “re-enacted the regulation as a status and non as a warranty.” Again, in the present case, harmonizing to the Sale of Goods Act 1893, it was a status of the contract for the sale of the auto that the marketer ( the suspect ) had the right to sell the auto. It was this of import differentiation, so, of the term as a status instead than a guarantee, that allowed the complainant efficaciously to revoke the contract and retrieve the full sum of the consideration paid.

To clear up, so, a breach of a status in a contract for the sale of goods will normally, under normal fortunes, entitle the guiltless purchaser ( or so a marketer if relevant ) , to disown the contract and seek to retrieve amendss. Harmonizing to subdivision 12 ( 1 ) of the Sale of Goods Act, and under the rule established in the current instance, there is besides a farther option where the marketer has failed to go through good rubric to the goods onto the purchaser ( because the marketer did non hold good rubric in the first topographic point ) . This option allows the guiltless party to retrieve the full value of the goods ( that is, the sum of the consideration paid ) , as being paid on a entire failure of consideration ( that is, there was no return consideration traveling from the marketer to the purchaser ) . Furthermore, and most significantly, the purchaser has benefited from free usage of the goods in inquiry during the intervening period, until such clip as he has discovered the seller’s breach of subdivision 12 ( 1 ) . The possible for contention in relation to this is obvious, as has been mentioned, and relates to the philosophy of unfair enrichment.

There is a farther interesting issue to see in this context, and that is the consequence of subdivision 54 of the Sale of Goods Act which states that “nothing in this Act shall impact the rights of the purchaser to retrieve money paid where the consideration for the payment of it has failed.” This clearly applied to the present instance, although it did non have in any of their Lordships’ judgements. The possible for maltreatment of the rule in this subdivision, as applied byRowland V Divall, is exemplified by the subsequent instance ofButterworth v Kingsway Motors Ltd( 1954 ) . This instance concerned an person who had allow a auto from a hire purchase company, and erroneously thought she had a right to sell the auto to a purchaser, every bit long as she continued to do the hire purchase episode payments. The complainant in the instance was a subsequent purchaser of the vehicle in inquiry, and used the auto for a period transcending a twelvemonth. After this clip, the complainant received a presentment from the company demanding bringing up of the vehicle. The complainant so sued to retrieve the full purchase monetary value of the auto from the suspect, which he was able to make. As the market monetary value of the auto was now merely ?800, the complainant made a net income. Again, one can see how the rule established inRowland V Divall, applied purely, can take to what may be seen as unfair enrichment.

This ulterior instance illustrates whyRowland V Divallwas, and is considered unsatisfactory. The successful complainant in Butterworth enjoyed the usage of the auto for a twelvemonth, and upon repossessing the purchase monetary value, made a net income. Atiyah has suggested some further exemplifying illustrations of the rule being carried through logically to unsatisfactory decisions. As Griffifths points out, the job stems from the fact that the rule in the instance applies even where the purchaser in fact has the usage and enjoyment of the goods free from the claims of 3rd parties ; that is, where the purchaser is the apparent proprietor and owner of the goods in inquiry ( Griffifths, p49 ) .

How has this contention been addressed? Assorted observers have progressively suggested that the really rule of the instance is incorrect. Griffifths provinces that “the purchaser should non be allowed to claim the monetary value [ of the goods in inquiry ] unless a 3rd party has in fact made an inauspicious claim against him and even so consideration should be taken off the sum of existent uninterrupted enjoyment of the goods which he has had” ( Griffifths, p49 ) . This, so, suggests that some allowance should be made for the fact that the purchaser has enjoyed the benefit of the goods in the period until find of the seller’s breach of subdivision 12 ( 1 ) . In the present instance, so, instead than retrieve the whole purchase monetary value as the complainant did, some tax write-off would hold been made for the two months of apparent ownership which the complainant enjoyed. This would besiege the sensed possible job of unfair enrichment on the portion of the purchaser at the disbursal of the marketer.

In 1966, the Law Reform Commission produced its 12ThursdayReport. In this, it recommended along these lines. A purchaser should non, it suggested, be able to retrieve the purchase monetary value of the goods in full, without any allowance for the intervening use the purchaser has made of the goods. Subsequently, the Law Commission considered the issue in its 1975 Working Paper, and once more in a study entitled ‘Sale and Supply of Goods’ . In the latter of these, the Law Commission reached the decision that although this job of unfair enrichment doubtless remained, any possible alteration that could be made along the lines suggested would non better the state of affairs. As the study said, “the job in English jurisprudence of the true proprietor being able to convey an action in transition, claiming the full value of the goods, against either the marketer or the purchaser, adds an excess bed of complexness to even the simplest solution” ( p57 ) . It was as a consequence of this sensed complexness that the Law Commission decided to go forth the country of jurisprudence unchanged.

The instance ofRowland V Divall, so, was both important and controversial. It put the theoretical consequence of subdivision 12 ( 1 ) and 54 of the Sale of Goods Act into pattern, and the consequence was that the purchaser was able to retrieve the full purchase monetary value of the auto. As Atiyah and others have illustrated, this rule, taken farther, can take to absurd consequences. An illustration of such a consequence was provided by the instance ofButterworth v Kingsway Motors Ltd( 1954 ) , in which the purchaser had usage of the auto for over a twelvemonth. despite the contention, nevertheless, the instance has survived assorted efforts to reform the jurisprudence in the country in order to turn to the possible job of unfair enrichment, and remains good jurisprudence today.

Bibliography

Legislative acts

Sale of Goods Act 1893

Sale of Goods Act 1979

Cases

Butterworth v Kingsway Motors Ltd [ 1954 ] 1 WLR 1286

Rowland V Divall [ 1923 ] 2 KB 500

Taylor V Hare ( 1805 ) 127 ER 461

Secondary beginnings

Atiyah, P.S. ( 2005 )TheSaleof Goods, 11ThursdayEdition ( Harlow: Longman )

Griffifths, M. ( 2005 )Commercial Law, 4ThursdayEdition ( London: Old Bailey )

Guest, A.G. ( Ed ) ( 1992 )Benjamin’s Sale of Goods, 4ThursdayEdition ( London: Sweet & A ; Maxwell )

Law Commission ( 1975 ) Working Paper No 65

Law Commission ( 1987 )Saleand Supply of Goods( Law Comm No 160, Cmnd 137 )

Law Reform Commission 12ThursdayReport ( 1966 ) Cmnd Reports 2958