Article 2 - Sales (UCC)

Question 1

AFTPDT

Answer 1

Application, Formation, Terms, Performance, Damages, Title and Risk of Loss

Question 2

Bailments

Answer 2

The transfer of personal property but not title. Article 2 does not apply to this. e.g. renting a rollaway bed for use by your visiting relatives

Question 3

Identification - (Passage of Title)

Answer 3

Before any interest in goods can pass from a seller to a buyer, the goods must be in existense and _______ to the contract.

Question 4

F.O.B - Place of Shipment

Answer 4

Title and Risk of loss pass upon delivery of conforming goods to the CARRIER

Question 5

F.A.S (free alongside vessel) - Place of Shipment

Answer 5

T&R pass upon sellers delivery of conforming goods alongside the vessel in the manner usual in that port, or on a dock designated and provided by the buyer.

Question 6

F.O.B - Place of Destination

Answer 6

Title passes upon seller’s tender of conforming goods at place of contract destination

Question 7

Non-Delivery

Answer 7

Seller is a Merchant - risk of loss passes when buyer actually has possession (sofa from furniture store)
Seller is a Nonmerchant - risk of loss passes upon sellers tender of the goods to the buyer (sofa at a garage sale)

Question 8

Breach

Answer 8

Affects risk of loss BUT not title

Question 9

Bona-Fide Purchaser (BFP)

Answer 9

Innocent third Party - Thomas steals bike, sells it to smith, smith has no knowledge thomas is not owner or that bike has been stolen, you discover smith has your bike, you are entitled to the return of your bike from smith because he has a void title from thomas but smith can legally recover from thomas

Question 10

Express Warranty

Answer 10

• Can be oral or written, can be in brochures, ads, etc, do not need words like warranty or guaranty, can be given by merhants/nonmerchants
• Affirmations of fact or Promise of performance
• A description of the goods
• Samples or models

Question 11

Implied Warranty of Title

Answer 11

Given in EVERY sale of goods by merchants and nonmerchants unless disclaimed otherwise
Content:
- Seller has a good title
- No outstanding liens, encumbrances, or security interests againstthe goods hidden
- If merhant, goodsshall be delivered free from 3rd party infringement

Question 12

Implied Warranty of Merchantability

Answer 12

Can only be made by a merchant. Must mention merchantability. can be oral or in writing.

Question 13

Implied Warranty of Fitness for a particular purpose

Answer 13

Two criteria needed:

1. Seller must expressly know the purpose of the buyers use of the goods
2. Buyer must rely on sellers selection or recommendation in making purchase

Question 14

Strict Tort Liability - The Privity Issue

Answer 14

Buying a truck from a dealership, have privity of contrat with the deale but not with the manufacturer. IF truck fails to meet requirements for warranty of merchantability, you have breach of warranty claims against both the dealer and the manufacturer

Question 15

Buyers Responsibilities

Answer 15

• Inspection - reasonable amount of time
• Right of rejection - “the perfect tender rule”
• Seller has right to cure/fix upon rejection

Question 16

Sellers Remedies (Still have the goods under the contract)

Answer 16

• Identify goods to the contrct (resell finished project)
• Withhold delivery
• Cancel and/or rescind contract
• Resell goods
• Sue for breach of contract
• Retain buyers deposit

Question 17

Sellers Remedies (Goods in Transit)

Answer 17

• Buyers insolvent - can stop shipment, or revover goods within 10 days after delivery,
• Buyer is not insolvent - Seller can stop large shipments

Question 18

Sellers Remedies (buyer has possession)

Answer 18

• May reclaim within 10 days or receipt

- can seek to recover purchase price + incidetals

Question 19

Buyers Remedies (Seller fails to deliver)

Answer 19

• Cancel/rescind with notice
• Cover (cost of cover/market price - contract price + incidental damages)
• Sue for breach of contract
• Specific performance - sue for the good
• Replevin - where cover is not available

Question 20

Buyers Remedies (tenders nonconforming goods)

Answer 20

• Cancellation
• Cover/substitute goods
• Treat as breach of contract, sue for damages
• Replevin
• Keep the goods, recover damages

Question 21

If buyer accepts nonconforming goods

Answer 21

Can pursue the following:

• Recover ordinary damages
• Recover for breach of warranty
• Deduction of damages from purchase price

Question 22

Liquidated Damages

Answer 22

Parties predetermine by agreement the amount of damages in the case of a future breach