Question

Melissa and Maui purchased a brand new house. They are both very excited about decorating the interior and the exterior of the house. Melissa plans to have everything colour coordinated. To match the navy blue wall paint, she orders navy blue ceramic vinyl floor tiles from Ceramic Tiles Fiji (CTF). Melissa placed an order for one hundred 30cm by 30cm navy blue ceramic vinyl square tiles. In order to process Melissa’s order, CTF required upfront payment of the entire contract sum of $7,000.00. Melissa attends to the payments on 3 May 2017. The terms of the agreement stipulates: “that the order will be processed within two weeks from the date of the receipt of full payment. That the tiles will be delivered within two weeks from the date of receipt of full payment. It also states that the purchaser has to exclusively engage the services of Delivery Fiji for the delivery of tiles.” Melissa feels it is quite unfair that they have to engage the services of Delivery Fiji and pay them a hefty sum of $100.00 for a very small distance. Melissa wanted to make her own arrangement for delivery at a much cheaper rate, however CTF objected to the same. On 30th May at about 9am some orders (tiles) were ready for delivery. These tiles were for three different buyers and one of them was Melissa. The other two buyers included one Smith and one Misha. The Delivery Fiji delivery truck was required to attend to the loading of the tiles at 9.30am. The tiles were packed in boxes and left at the delivery area at 9.05 am with the respective buyer’s initials and were ready to be transported to the buyers. Melissa’s navy blue tiles were packed in a navy blue box and the box was marked with letter “M” on top. There was another light blue box which had tiles for a different buyer Smith but it was unmarked. A purple box contained tiles for Misha and the box was marked with letter “M” on top. All boxes were coloured differently corresponding to the colour of the tiles in the box. Unbeknown to CTF at about 9.30 am, an intruder went into its delivery area and loaded one navy blue carton of tile and drove away. At that time the security officer of CTF who was supposed to be at the delivery area was out in the parking space attending to a relative. 20 Delivery Fiji truck reached CTF’s delivery area at 9.50am to take delivery of all tiles. The attending staff loaded the tiles in the delivery truck. They were provided with a list by CTF which had the three buyers’ addresses written in different coloured ink (light blue, navy blues and purple) corresponding to the colour of the carton of tile. Delivery Fiji mistakenly delivers the purple coloured carton to Melissa’s residence. Melissa acknowledges receipt by signing the delivery docket. The delivery docket had a clause which exempted Delivery Fiji from all forms of liabilities once the goods were safely delivered to its destination and the same was acknowledged. Melissa opened the box after two weeks when the tile layer arrived at her place to lay the tile and, to her dismay the tiles were not what she had ordered and expected it to be. It was not ceramic navy blue vinyl tiles instead it was plain light blue tiles. Melisa now wishes to return the tiles to CTF and claim her money and damages. CTF is disputing this by stating that the return of the sale period ended after 3 days from the date of delivery. Melissa further argues that they received a different order altogether and that CTF breached their agreement. CTF argues that the property and risk passed to Melissa once the tiles were packed and left at the delivery area. Melissa seeks to sue CTF and Delivery Fiji. CTF convenes a discussion with Delivery Fiji in this respect and finds out that only two boxes were loaded for delivery by them on that day. CTF carries out an investigation and the CCTV footage reveals that one box was stolen from their delivery area on 30 May at about 9.30am. Nevertheless they still insist that they are not liable to Melissa in anyway. Meanwhile Smith was declared a bankrupt on 2 May, 2017. Delivery Fiji had delivered the tiles to the address provided by CTF for Smith. Smith had made an instalment of $3,000.00 and he was supposed to pay the remaining balance of $5,000.00 to CTF upon receipt of the goods. CTF is demanding remaining payment from Smith. CTF argues that the property and the risk passed to Smith once the tiles were packed and left at the delivery area. Meanwhile Misha did not receive anything and she had paid $4,000.00 as deposit and was supposed to pay the remaining balance of $5,000.00 to CTF upon receipt of the goods.Write written submission addressing the following matters: 1. Did the property and the risk indeed pass to Melissa, Smith and Misha once the goods were left at CTF’s delivery area? 2. What remedies are available for Melissa and Misha? 3. Is Delivery Fiji liable to Melissa, Smith or Misha? 4. What remedies and defences will Delivery Fiji advance in its favour?5. What arguments will CTF advance in its favour to dispute the various allegations against them? 6. Can CTF be exempted from all liabilities or are they liable to the buyers for their loss. 7. What is Smith’s position in this respect taking into consideration his insolvency? 8. Are CTF and Delivery Fiji engaged in deceptive and misleading commercial practice?

These Questions relates to Law of Commerce.

Answer 1

1. The property and the risk never passed to Melissa, Smith and Misha once the goods were left at CTF’s delivery area. The reason being the customers of CTF are not permitted to use their own delivery means and are bound by the terms of agreement to get goods delivered by Delivery Fiji their partner. Hence Delivery Fiji should be considered as a part of CTF for addressing this scenario and hence the property and risk can never be passed to customers once goods are left at CTF's delivery area in such an agreement.

2.

Melissa Case – CTF did not pass on Melissa’s product to Delivery Fiji and hence CTF’s claim that they delivered Melissa’s product is wrong. Delivery Fiji did not deliver the product to the right destination and hence did not fulfil the clause of the delivery docket. Had this product been delivered to Misha, Delivery Fiji’s claim would have been valid since they would have delivered right product to right party. But it is not so in the case of Melissa and hence the clause of delivery docket does not hold good.

CTF did not complete the terms of agreement since wrong product was delivered by CTF and its sole delivery partner and hence the tiles lying with Melissa is a property of CTF and CTF is yet to satisfy the terms of agreement with Melissa.

Misha Case – Misha did not receive any delivery and though her package was loaded by CTF, it was not delivered to her by Delivery Fiji. Since Delivery Fiji is the only delivery partner of CTF and it is a binding clause applied by CTF in its sale agreement, it is the primary responsibility of CTF to have the product delivered to the buyer. There might be dispute between CTF and Fiji with respect to this delivery but for Misha, this is a clear case of non fulfilment of sale agreement, since Delivery partner is engaged by CTF and not Misha.

3. Delivery Fiji is liable to Melissa. For Misha no delivery was made and hence still CTF is liable to the same. However Delivery Fiji will be answerable to CTF for inconsistent delivery to all three parties.

4. Delivery Fiji will say that it received only two parcels instead of three. Further Delivery Fiji will say that they have delivered products to the customers in order as provided to them by CTF. Further Delivery Fiji has acknowledgement frim Melissa.

5. CTF will place the arguments that al the three parcels with correct initials and colour coded boxes were placed in the delivery area for all the three parties. Further CTF will tell that they have had the product delivered to Melissa and Smith at the address provided and three days have passed since then. Melissa has also acknowledged the product delivered to her.

6. CTF is very much liable to the buyers for their loss. CTF liability could have been said to be passed to Delivery Fiji had the security guard been present and handed over all three boxes correctly to Delivery personnel in presence. Also packaages were left unattended at 9.05am, though the delivery time was 9.30 am. And further by nature of agreement with customers that only Delivery Fiji is to be used as the delivery partner, CTF is primarily responsible for delivery of right product to its customers. Customers are bound by one single contract with CTF and delivery FIJI is a party to that contract. Delivery

7. Smith has not acknowledged the product and the point the product was delivered the address was not his or was probably under seizure and hence he is in a strong position considering his insolvency. But the fact that the same was not informed to CTF for cancellation of order or change in address, could well go against him.

8. The arrangement can be very well said as a deceptive and misleading commercial practice. By the terms of agreement, the buyers are not allowed to engage their own delivery partner and hence delivery Fiji can be said to be a party appointed by CTF for delivery of product and hence Delivery Fiji is merely a representative of CTF and not a separate party to the contract. The CTF risk and liability for delivery of product should not be said to be completed only when the goods are dumped into their delivery area, rather it should be when the right goods are delivered to customers place as per terms of agreement.