When Mrs Wood fell ill with gastroenteritis on her all-inclusive holiday and the hotel food was found to be the cause, the holiday company argued before the court that she only had a licence to consume the food and that title in it never passed to her.
The point was whether the implied term under the Sale of Goods legislation – that the food must be of satisfactory quality – applied. It only applied if there was a contract for the sale of goods; and for that to be the case, title to the food must pass.
The Court of Appeal found that there was nothing in the contract to stop title passing. The contract was a contract for the sale of goods. The implied term applied – and had been broken.
Contract terms can control when title passes. It can be a very useful tool in some insolvency situations allowing a supplier to take back goods when the supplier has not been paid, though it does not work in all cases.
It’s important to keep the terms of your contracts under review to make sure they put you in the position you want.
Greenwoods’ Corporate & Commercial and IP teams prepare Essentials to provide you with a summary of recent developments in company and intellectual property law that are likely to have an impact on your business. To talk through any legal issues that arise call David Woods by email or telephone on 01733 887793.