6.2 PERFORMANCE, DISCHARGE, AND BREACH Flashcards
UNDER UCC WHAT ARE THE BUYERS RIGHTS AND REQUIREMENTS IN DETERMINING PERFORMACE AND BREACH?
SEE SCREENSHOT
WHAT ARE THE UNIVERSALLY APPLICABLE DISCHARGE RULES FOR CONTRACTS?
THE OBLIGATIONS OF A CONTRACT CONTINUE UNLESS AND UNTIL THE EVENT OR STEPS TAKEN WORK TO PROVIDE A DISCHARGE OF PERFORMANCE.
WHAT DOES THE TITLE OF GOODS AND RISK OF LOSS REFER TO?
TITLE OF GOODS REFER TO LEGAL OWNERSHIP AND DETERMINES WHO RECORDS THE GOODS AS ITEMS IN THEIR FINANCIAL RECORDS BEFORE OR AT YEAR-END AND WHICH CREDITORS OF WHICH PARTY WILL HAVE RIGHTS TO REPOSSESS THE GOODS.
RISK OF LOSS DEALS WITH WHICH PARTY WILL BEAR THE RISK OF LOSS OF GOODS ARE DAMAGED OR LOST.
BEFORE ANY INTEREST IN GOODS CAN PASS FROM A SELLER TO A BUYER, THE GOODS MUST BE IN EXISTENCE AND IDENTIFIED TO THE CONTRACT.
WHAT ARE THE RULES FOR RISK OF LOSS IDENTIFICATION?
SEE SCREENSHOT
FOB DESTINATION - THE SELLER IS LIABLE UNTIL BUYER RECEIVES THE GOODS AT THE BUYERS SPECIFIED DESTINATION (IE DESTINATION CONTRACT)
*IN A DESTINATION CONTRACT, IF THE BUYER RIGHTFULLY REJECTS ACCEPTED GOODS (NONCONFORMING), THEN THE TITLE TO THOSE GOODS REVERT BACK TO SELLER,
UNDER UCC RULES THE BUYER IS OBLIGATED TO FOLLOW ANY REASONABLE INSTRUCTIONS RECEIVED FROM THE SELLER WITH RESPECT TO THE GOODS (SUCH AS SEND THE NON-CONFORMING GOODS BACK)
FOB SHIPPING - THE BUYER IS LIABLE IN TRANSIT (IE SHIPMENT CONTRACT)
FYI SHIPPING TERMS DETERMINE WHO BEARS THE RISK OF LOSS DURING TRANSIT
*LEGAL TITLE PASSES FROM THE SELLER TO THE BUYER WHEN THE GOODS ARE DELIVERED TO THE THIRD-PARTY TRANSPORTATION CARRIER, USUALLY AT THE SELLER’S LOADING DOCK. (FOR FOB SHIPPING)
IN SHIPPING CONTRACT IF GOODS ARE NONCONFORMING THEN THE TITLE AND RISK OF LOSS STAYS WITH THE SELLER UNTIL THE GOODS ARE ACCEPTED OR CURED.
WHAT IS A SALE OR RETURN CONTRACT?
THE BUYER/MERCHANT IS ACQUIRING THE GOODS FOR RESALE AND IS GIVEN THE RIGHT TO CANCEL THE CONTRACT IF IT IS UNABLE TO RESELL THE GOODS.
TITLE AND RISK OF LOSS REST WITH THE BUYER UNTIL THE GOODS ARE RETURNED TO THE SELLER.
WHAT IS A SALE-ON-APPROVAL CONTRACT?
“CONDITIONAL SALE”
“TRY BEFORE YOU BUY”
PERMITS THE BUYER TO OBTAIN THE GOODS FOR USE AND MAKE A DECISION AS TO WHETHER OR NOT TO PURCHASE THEM.
TITLE ANS RISK OF LOSS REMAIN WITH THE SELLER UNTIL THE GOODS HAVE BEEN ACCEPTED BY THE BUYER OR THE APPROVAL PERIOD HAS ELAPSED
WHAT ARE CORPORATION PROMOTERS?
A PROMOTER IS THE PERSON WHO TAKES THE INITIATIVE TO CREATE OR ORGANIZE A BUSINESS. UNLESS A NOVATION OCCURS WHERE THE PROMOTER IS SUBSTITUTED, A PROMOTER IS LIABLE FOR PREINCORPORATION CONTRACTS ECT - A CORPORATION IS NOT IN EXISTENCE DURING THIS PERIOD THEREFORE AGENCY LAW WILL NOT PROTECT THE PROMOTER.
6.2 WHAT ARE THE RULES FOR NONSHIPMENT CONTRACTS WITH REGARDS TO PASSAGE OF TITLE AND RISK OF LOSS?
YOU ESSENTIALLY HAVE A TITLE NOT REQUIRING A DELIVERY, THE TITLE IS PASSED TO THE BUYER UPON RECEIPT (NICE AND SIMPLE)
WITH REGARDS TO RISK OF LOSS SINCE THEIR IS NO TRANSIT, THE RISK OF LOSS IS TRANSFERRED TO THE BUYER WHEN THE BUYER ACTUALLY GETS POSSESSION OF THE GOOD.
WHEN CAN “PIERCING THE CORPORATE VEIL OCCUR?
WHAT IS THE DOCTRINE OF SUBSTANTIAL PERFORMANCE?
