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    • adh747
    • By adh747 28th Aug 16, 6:05 PM
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    adh747
    Goods Sold on to Third Party After Payment
    • #1
    • 28th Aug 16, 6:05 PM
    Goods Sold on to Third Party After Payment 28th Aug 16 at 6:05 PM
    I need some thoughts on the following scenario which happened recently.

    Goods were ordered and paid for from a Company in the UK via a BACS payment on the 1st July. We asked if the goods could be held for a couple of weeks until they were needed on site. This was agreed on the phone and followed up by me in an email.
    Subsequently a delivery date was arranged on the phone for the goods to be delivered on the 1st August. The goods never turned up and the company was contacted to find out where they were. Initially it seemed like a delivery problem until later in the day when the company confirmed they had despatched the goods to another customer. The company now had nil stock and wouldn't have any for several weeks. Due to this error we had costs paid out to contractors who were due to start work on site the next day.
    Due to the nature of the goods ordered we had no alternative but to order from an alternative supplier who had stock. However this cost an additional £500.
    The original company refused to accept a breach of contract and resulting consequential costs. They did refund the original contract amount though. I am now using the moneyclaimonline system to try and recoup costs.
    Anyone provide additional guidance on where we stand legally. I have been advised that as the goods were paid for then to sell these to another party is illegal and misappropriation of goods.
Page 1
    • mije1983
    • By mije1983 28th Aug 16, 6:39 PM
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    mije1983
    • #2
    • 28th Aug 16, 6:39 PM
    • #2
    • 28th Aug 16, 6:39 PM
    As it's a b2b deal, you'd need to see what your original contract with them stated regarding a breach from either party and what, if any, costs would be borne. It's not as straight forward as a consumer transaction.
    Last edited by mije1983; 28-08-2016 at 6:41 PM.

    • adh747
    • By adh747 28th Aug 16, 6:40 PM
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    adh747
    • #3
    • 28th Aug 16, 6:40 PM
    • #3
    • 28th Aug 16, 6:40 PM
    As it's a b2b deal, you'd need to see what your original contract with them stated regarding a breach from either party. It's not as straight forward as a consumer transaction.
    Originally posted by mije1983
    Sorry not sure I understand. When you say b2b do you mean a business to business deal? If so, it wasn't. I'm a consumer and was purchasing the goods for personal use on a building project.
    • mije1983
    • By mije1983 28th Aug 16, 6:42 PM
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    mije1983
    • #4
    • 28th Aug 16, 6:42 PM
    • #4
    • 28th Aug 16, 6:42 PM
    Sorry not sure I understand. When you say b2b do you mean a business to business deal? If so, it wasn't. I'm a consumer and was purchasing the goods for personal use on a building project.
    Originally posted by adh747
    Ah ok, apologies then. Teach me to skim read!

    • unholyangel
    • By unholyangel 28th Aug 16, 7:04 PM
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    unholyangel
    • #5
    • 28th Aug 16, 7:04 PM
    • #5
    • 28th Aug 16, 7:04 PM
    Sorry not sure I understand. When you say b2b do you mean a business to business deal? If so, it wasn't. I'm a consumer and was purchasing the goods for personal use on a building project.
    Originally posted by adh747
    I need to ask you to clarify this. Purchasing the goods for personal use on a building project doesn't necessarily mean its a consumer sale. The consumer rights act defines what a consumer is and it says:

    "(3)“Consumer” means an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession."

    So, are you a competent DIY'er or a skilled tradesman doing work on your own property?
    Money doesn't solve poverty.....it creates it.
    • adh747
    • By adh747 28th Aug 16, 7:07 PM
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    adh747
    • #6
    • 28th Aug 16, 7:07 PM
    • #6
    • 28th Aug 16, 7:07 PM
    I need to ask you to clarify this. Purchasing the goods for personal use on a building project doesn't necessarily mean its a consumer sale. The consumer rights act defines what a consumer is and it says:

    "(3)“Consumer” means an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession."

    So, are you a competent DIY'er or a skilled tradesman doing work on your own property?
    Originally posted by unholyangel
    I'm a DIY'er working on my own property. It is wholly outside my normal job.
    • unholyangel
    • By unholyangel 28th Aug 16, 7:22 PM
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    unholyangel
    • #7
    • 28th Aug 16, 7:22 PM
    • #7
    • 28th Aug 16, 7:22 PM
    I'm a DIY'er working on my own property. It is wholly outside my normal job.
    Originally posted by adh747
    Thanks for that. Were you given any T&C's from them at all? Particularly looking for if they exclude consequential loss & also if they state when acceptance takes place. Or when transfer of ownership/title takes place?
    Money doesn't solve poverty.....it creates it.
    • adh747
    • By adh747 28th Aug 16, 7:24 PM
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    adh747
    • #8
    • 28th Aug 16, 7:24 PM
    • #8
    • 28th Aug 16, 7:24 PM
    Thanks for that. Were you given any T&C's from them at all? Particularly looking for if they exclude consequential loss & also if they state when acceptance takes place. Or when transfer of ownership/title takes place?
    Originally posted by unholyangel
    No T&Cs at all provided. We were emailed an invoice for payment with a description of the goods and total price including VAT & delivery. This was paid in full but no terms & conditions ever received either before or after the transaction.
    • bris
    • By bris 28th Aug 16, 8:07 PM
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    bris
    • #9
    • 28th Aug 16, 8:07 PM
    • #9
    • 28th Aug 16, 8:07 PM
    Sounds like loss of bargain but to claim you need to follow the correct procedures which includes giving them a chance to put it right and mitigating your losses, you need to be able to prove you did this.
    • adh747
    • By adh747 28th Aug 16, 8:28 PM
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    adh747
    Thanks for reply.

    We attempted as much mitigation as we could under the circumstances. We attempted to explain the situation we were in and asked the company to source the goods from elsewhere given the circumstances. They refused citing cost. We asked if they wanted to use an ADR but they ignored this request. We attempted to source the goods elsewhere with the minimum of extra cost and managed to negotiate a discount with the only supplier who had stock. In addition we minimised the costs incurred on us by third parties by informing them as soon as possible. However given that we weren't informed of the non delivery until the afternoon of the agreed delivery date, this was not great.

    It's a matter of fact that we paid for the goods in full and the company had the goods at time of payment and also at the time of confirming the delivery date. The company then went on to sell these goods at another customer. I can't see how this is legal as the goods transferred to us at time of payment. To sell those goods on is surely misappropriation of goods.

    Can you explain the definition of loss of bargain. I haven't come across this before. I've been reading the Consumer Rights Act but didn't find a reference to this term.
    • steampowered
    • By steampowered 28th Aug 16, 10:21 PM
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    steampowered
    Needing to delay the contractors isn't "consequential loss" within the legal meaning of the term. Its a direct loss perfectly foreseeable from their failure to deliver, particularly as you told the seller when the goods should be on site.

    Obviously read any T&Cs you are given, but it sounds to me like you should probably issue a money claim for breach of contract claiming all of the losses you have suffered.

    The way to proceed would be to write the business a formal 'letter before action' setting out that they have breached their contract, explaining what loss you have suffered as a result and ask them to make it write. Give them a 14 day deadline to respond saying that a money claim will be issued if you do not receive an acceptable response within that timeframe (14 days is the period suggested in the court's Civil Procedure Rules).

    It's a matter of fact that we paid for the goods in full and the company had the goods at time of payment and also at the time of confirming the delivery date. The company then went on to sell these goods at another customer. I can't see how this is legal as the goods transferred to us at time of payment. To sell those goods on is surely misappropriation of goods.
    If the goods were your property, and they were then sold to a third party without your permission, you could sue the seller for 'conversion' of your property.

    Conversion would get you the amount paid by the other customer to the seller plus costs. But you can't get damages for conversion AND damages for a breach of contract. So in this case it sounds like you are better off just claiming breach of contract.
    • adh747
    • By adh747 28th Aug 16, 10:51 PM
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    adh747
    Thanks for the information.

    I'll go with your advice and see what transpires. I wasn't aware of 'conversion' but that's what effectively took place. However I think breach of contract is the more appropriate claim.

    I'll keep the thread updated with progress.

    Many Thanks.
    • unholyangel
    • By unholyangel 28th Aug 16, 10:57 PM
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    unholyangel
    Thanks for reply.

    We attempted as much mitigation as we could under the circumstances. We attempted to explain the situation we were in and asked the company to source the goods from elsewhere given the circumstances. They refused citing cost. We asked if they wanted to use an ADR but they ignored this request. We attempted to source the goods elsewhere with the minimum of extra cost and managed to negotiate a discount with the only supplier who had stock. In addition we minimised the costs incurred on us by third parties by informing them as soon as possible. However given that we weren't informed of the non delivery until the afternoon of the agreed delivery date, this was not great.

    It's a matter of fact that we paid for the goods in full and the company had the goods at time of payment and also at the time of confirming the delivery date. The company then went on to sell these goods at another customer. I can't see how this is legal as the goods transferred to us at time of payment. To sell those goods on is surely misappropriation of goods.

    Can you explain the definition of loss of bargain. I haven't come across this before. I've been reading the Consumer Rights Act but didn't find a reference to this term.
    Originally posted by adh747

    You said there was no T&C's provided for the contract. Property passes when it is intended to pass (if there are no t&cs on the matter) - which is basically dependent on if/when the goods became ascertained. This is relevant to the old SoGA though - the new CRA doesn't have any sections covering transfer of ownership.

    This page explains it a bit:

    Under Rule 5 there are two main criteria to be assessed. The first is wherever there is unconditional appropriation. In other words, the goods in question have to be irrevocable earmarked and attached to the relevant contract. This means that there exists irrevocable identification of the goods which is beyond the power for the seller to substitute goods as seen in Carlos Federspiel & Co SA v Charles Twigg & Co Ltd. In Carlos Federspiel, the seller agreed to sell some bicycles to the buyer. The seller packed the bicycles and agreed to a ‘free on board'. The seller then went into liquidation. The buyers argued that the bicycles were theirs but the courts held that merely segregating the goods was not a sufficient unconditional appropriation. The second criterion is whether the appropriation was afforded with the proper assent from a party to the contract. In this case there is an unconditional appropriation because when the buyer accepts delivery it is considered assent and there actually was delivery in this case.
    The difference in ascertained goods can probably be exampled best by cars. Go to a dealers forecourt and enter into a contract to buy a black audi with registration xyz and thats a contract for specific goods so providing its not a conditional contract, property would pass when the contract is made.

    In comparison, you go to a dealers and order from a brochure, a car made to your specifications and its not a contract for specific goods (there are terms defining what the goods should be, but theres no car you can identify at the moment of entering into the contract as being the car you are buying), in those circumstances property likely wouldnt pass until delivery was made.


    Perhaps you might be best getting a free half hour initial consultation with a solicitor to see what losses they think you have a claim for?
    Money doesn't solve poverty.....it creates it.
    • adh747
    • By adh747 28th Aug 16, 11:06 PM
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    adh747
    Perhaps you might be best getting a free half hour initial consultation with a solicitor to see what losses they think you have a claim for?
    Originally posted by unholyangel
    I've already had several phone calls with legal advice provided by my house insurance and also my professional Union membership. I've been told as I had no choice but to purchase from an alternative supplier, due to the circumstances, I can claim the extra costs above what I had paid for the original order. The other incurred costs should also be claimable but it may be argued that these could have been avoided, although I'm not sure how.

    I'm trying to gain as much advice as possible before doing anything so I can make an informed decision. Anytime anything goes to court, the outcome is never guaranteed.
    • unholyangel
    • By unholyangel 28th Aug 16, 11:41 PM
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    unholyangel
    I've already had several phone calls with legal advice provided by my house insurance and also my professional Union membership. I've been told as I had no choice but to purchase from an alternative supplier, due to the circumstances, I can claim the extra costs above what I had paid for the original order. The other incurred costs should also be claimable but it may be argued that these could have been avoided, although I'm not sure how.

    I'm trying to gain as much advice as possible before doing anything so I can make an informed decision. Anytime anything goes to court, the outcome is never guaranteed.
    Originally posted by adh747
    I was more just pointing out property passing is a moot point in the circumstances. If you were chasing for specific performance/delivery of the goods then it might be more important but in a claim for damages, its negligible as it doesn't affect what damages you can claim or whether you have a claim for damages.

    However, on the plus side, it would be for the retailer to show you could have taken reasonable steps to mitigate your loss but didnt, (or that you took unreasonable steps and allowed your losses to mount up).
    Basically even if you took unreasonable steps/failed to take reasonable steps, it wouldn't result in your claim being dismissed, just you would be awarded damages on the basis of you having taken those reasonable steps.

    Have you put a total value on your claim yet? Have you sent a letter before action to the retailer yet?
    Money doesn't solve poverty.....it creates it.
    • adh747
    • By adh747 29th Aug 16, 8:11 AM
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    adh747
    Yes pre action letter sent and total claim calculated. Company has refused any responsibility and ignored request for mediation.
    • adh747
    • By adh747 20th Mar 17, 1:30 PM
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    adh747
    Update
    Hi All,

    Thought I'd update everyone on what transpired with regards to this dispute.

    I filed a County Court Claim through Moneyclaimonline against the company (Eco Systems Distribution Ltd). The company filed a defence and the case went to a hearing on the 1st March 2017. The judge ruled in our favour with regards to the selling of goods we had paid for to another party. The company was ordered to pay the difference between what the goods cost us from another supplier and what we had paid them. In addition our costs of taking the action was refunded including the costs of attending court. The judge didn't however find in our favour with regards to consequential loss. However we received back the bulk of our extra costs and it was satisfying to see the company finally face the penalty of breach of contract. Quite amazing that they fought this so hard and will have ended up paying out significantly more than they would have done had they negotiated with us to start with. They refused to compromise during mediation. In addition three of the company employees including their Director turned up for the hearing which incurred hotel costs for the night as they had a long journey from their offices in Sussex!

    It was a very interesting process and even though we had a strong case for awarding consequential losses the judge on the day felt we hadn't made 'time of the essence' when arranging delivery of the goods. She therefore could not award these costs in her opinion.

    Anyway the company have now paid up and I would encourage anyone in similar circumstances to take similar action provided you have strong evidence. Thankfully we had records of calls made and even one call which was recorded on a car dashcam. This provided sufficient evidence of a confirmed delivery date which the company had constantly denied.

    Hope the above update is useful
    • Fosterdog
    • By Fosterdog 20th Mar 17, 2:07 PM
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    Fosterdog
    Thanks for coming back and letting us know how you got on and well done on winning "most of" your claim. Hopefully the company will be a bit more careful with how they handle already paid for goods in the future and now know that they may well be liable for additional costs if they fail to take reasonable care.
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