Commercial Law Essay Example | Topics and Well Written Essays - 2000 words - 5

Commercial Law - Essay Example If no intention is expressed, then section 18 is applicable, which provides that where there is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment or delivery or both, be postponed. Once the goods have become ascertained in this case at point of delivery, then under section 18 of the SGA, the property will not pass (subject to contrary intention in the contract) until goods are unconditionally appropriated to the contract by one party with the assent of the other. Furthermore, as highlighted in the case of Ward v Bignall4, there is a presumption that ownership passes to the buyer on delivery. The current scenario points towards a contract for ascertained goods and therefore it is likely that ownership of the property will pass on delivery based on the SGA provisions and established case law. 1b) With regard to protection against the risk of non-payment, the greatest risk to Micro Maker is if the property passes in the goods to Lacey upon delivery. As such, it would be prudent for Micro-Maker to include a retention of title clause in its agreement with Lacey in order to ensure that it can recover its goods in the event of non-payment5. Micro-Maker should also try and agree a clause whereby the risk passes to Lacey upon delivery6. This right to reservation of title has through practice been termed the â€Å"Romalpa† clause7, due to the case of Aluminium Industries v Romalpa Aluminium8, which set out guidelines regarding enforceability of reservation of title clauses: This would be the best course of action for Micro-Makers. It is further submitted that any such reservation of title clause should require Lacey to store the microwaves separately from other products and include a right of entry for