Arthur, the manager of Lookout Cars Ltd, asks his young assistant, Terry, to look after the business while he is away on holiday. It is an eventful week for Terry.
(a) Early Monday morning Terry sells a second-hand Escort to Doris. The car had been advertised in the local press as follows:
93 (N) Ford Escort 45,000 miles. Blue £1,500
Doris returns on Wednesday to tell Terry that the Escort's clock has been turned back and that it has actually done 90,000 miles.
(b) On Tuesday, Terry finalises a part-exchange deal with Mr Walker. Unknown to either of them, Mrs Walker was involved, earlier in the day, in a serious car crash while driving the old car. The car is a 'write-off'.
(c) On Wednesday, a man calls into the showrooms introducing himself, falsely, as James Dean MP. He agrees to buy a new Orion car, but when he pulls out a cheque book, Terry says that he is reluctant to accept a cheque. The man then produces a pass to the House of Commons as proof of his iden- tity. Terry accepts the cheque and the man drives off in the car. Terry has just learned from the bank that the cheque has been dishonoured. The man sold the car to Pete, a university student.
(d) On Thursday, Daisy, Lookout Ltd's secretary, puts a number of letters in front of Terry for his sig- nature. Terry is busy talking to the workshop manager at the time and signs his name without reading each one. He has now discovered that one of the letters was an undertaking to act as a guarantor for a £5,000 loan to Daisy by the Midshires Bank plc.
Explain to Terry the legal position in each situation.