Cambridge BA: Sale of Goods Exam Paper

Artisan Furniture Ltd manufactures bespoke dining tables. In January, they entered into a contract with Luxe Restaurant Group to supply 50 oak dining tables by 31st March for £75,000. The contract specified 'Grade A English Oak, minimum 40mm thickness, hand-finished to restaurant standard.' In February, due to supply chain disruptions, Artisan could only source Grade B oak at 35mm thickness. Without consulting Luxe, they proceeded with manufacturing, believing the difference was minimal and would not affect functionality. On 25th March, Artisan delivered the tables. Luxe's manager immediately noticed the inferior wood quality and thinner construction. Three tables collapsed within the first week of use, injuring customers. Luxe rejected all tables on 2nd April and demanded refund of their £20,000 deposit, plus £30,000 in lost profits from restaurant closure during refitting with alternative furniture. Meanwhile, Artisan had incurred £45,000 in manufacturing costs and cannot easily resell the bespoke items. Luxe also seeks £15,000 in medical compensation paid to injured customers. Artisan argues the goods were fit for purpose as dining tables and any rejection after March 31st was too late. Advise both parties on their rights and remedies under the Sale of Goods Act 1979.

"The Sale of Goods Act 1979's implied terms represent an optimal balance between protecting consumers and preserving commercial flexibility." Critically evaluate this statement with reference to sections 13, 14, and 15 of the Act.

TechCorp, a software company, agreed to sell 100 specialized servers to DataCenter Inc. for £500,000, with delivery by instalments over six months. The contract specified 'Model X500 servers with 64GB RAM and proprietary cooling systems.' The first delivery of 20 servers arrived on schedule but contained Model X400s with 32GB RAM, though they included the specified cooling systems. DataCenter's IT director, knowing their immediate need was only for 16GB RAM minimum, accepted delivery and installed the servers, which performed adequately for two months. The second delivery was delayed by three weeks due to TechCorp's supply issues, containing correct X500 models but without cooling systems. DataCenter rejected this shipment immediately. TechCorp claimed they could install cooling systems within one week and argued DataCenter had waived their right to demand exact specifications by accepting the first delivery. The third delivery never occurred as TechCorp entered administration. DataCenter seeks to recover £150,000 paid as deposit, £200,000 for replacement servers purchased at premium prices due to urgency, and £75,000 in lost profits from delayed data centre expansion. DataCenter also wants to return the 20 X400 servers and recover their £100,000 value. TechCorp argues the first delivery was accepted and DataCenter cannot reject goods that performed adequately. Advise the parties on liability and remedies under the Sale of Goods Act 1979 and common law.

"The concept of 'acceptance' under section 35 of the Sale of Goods Act 1979 operates unfairly against buyers, particularly in complex commercial transactions." Discuss.