Capstone

Capstone: Brightwater Cycles

Brightwater Cycles Ltd is an invented bicycle shop run by Ms Dara Quill. In March it borrowed 100,000 from Ardent Bank, which took a security interest over all its present and future stock and receivables and filed a notice in the register under the shop’s exact name. In May it bought forty electric bikes from Volt Works, an overseas maker, for 80,000, on terms that the price was due on 10 July, that risk passed on delivery and that ownership stayed with Volt Works until the price was paid. Volt Works did not register the clause anywhere. Ms Quill signed a personal guarantee of the price. Six bikes arrived with batteries that failed within an hour. Brightwater sold twenty-eight of the others, including one to a customer, Mr Ode, for 2,500. A warehouse fire in June destroyed four. Volt Works gave Brightwater an extra thirty days to pay without asking Ms Quill. In September Brightwater cannot pay anyone, and a trustee has been appointed. You are asked to advise each side. Use the six questions from Module 1 and the three tools. The facts are invented, the tools use simplified rules and the place whose law governs is left open, so state your assumptions as you go.

General education on commercial law and secured transactions, using invented businesses, people and figures. It states common principles in simplified form and does not describe any one country’s law, which differs and changes; rules on sale, security, registration and priority are strict and local. It is not legal advice. Consult a qualified lawyer in the place that matters.