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Principles of Business Law

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Principles of Business Law
Case 1.
Introduction: Maria saw the John’s announcement about the selling of 1999 Bedford van and became the potential buyer. After making a thorough inspection and test drive, she entered into a contract to buy John’s property.
Situation 1. Issue: Maria found out that the vehicle was made from two different models of Bedford van and that the car is in dangerous condition.
Principle: According to the Sale of Goods Act, the principle of the Implied term of corresponding with the description can be applied. The Transfer of Risk principle is also can be involved. It states that the risk of the goods remain with the seller until the ownership passes to the buyer.
Application: In the announcement the owner of the car John mentioned, that it was 1999 Bedford van. If at the moment of the purchase the buyer was in the good faith and john didn’t explain the real condition of the van, it means that he breached the principle of Implied term, because the description of the car and its condition do not correspond to each other. Maria is able to sue John. However John can use the principle of Transfer of Risk to make defence and say that the risk transferred to Maria with the transfer of ownership. Moreover, the buyer was allowed to make thorough inspection and test drive, before entering the contract.
Situation 2. Issue: Maria noticed that the clutch in the van was defective. The owner offered to fix it by himself or drop the price for $75. They agreed with price reduction. Later Maria was told that repair of the clutch would cost ~$150.
Principle: In this situation the Estoppel principle can be involved. This principle is applied to estop one party from making a certain claim, if its prior actions are inconsistent with a claim, and if another party relied

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