Ch.21: Transfer of Title and Risk of Loss Flashcards
Identification
Designation of specific goods as goods to which the contract of sale refers.
Fungible
The equivalent of any other unit.
Security interest
Interest in personal property or fixtures that insurance payment or performance of an obligation.
Insurable interest
Interest in property that may be insured against loss
Lien
A non-consensual claim against property
Passage of title
Title passes when the parties intended to pass; when the parties do not specifically agree, the Code provides rules to determine when title passes.
Physical movement of the goods
When delivery is to be made by moving the goods, title passes at the time and place that the seller completes his performance with reference to delivery.
Shipment contract
Seller is required to deliver the goods to a carrier for delivery to buyer.
Destination contract
Seller is required to tender delivery of the goods at a particular destination.
Tender
Seller offers conforming goods to buyer and gives buyer noticed that the kids are available.
Power to transfer title
The purchaser of goods obtains such title as his transferor either has or had the power to transfer; however, to encourage and make secure a good faith acquisitions of goods, it is necessary to protect certain third parties under certain circumstances.
Good faith purchaser
Buyer who acts honestly, gives value, and takes the goods without notice or knowledge of any defect in the title of his transferor.
Void title
No title can be transferred
Voidable title
The good faith purchaser acquires good title
Good faith
Honesty in fact and observance of reasonable commercial standards of fair dealing.
Entrustment of goods to a merchant
Buyers in the ordinary course of business acquire a good title when buying from Merchant.
Buyer in ordinary course of business
Person who buys an ordinary course of business, in good faith, and without knowledge that the sale to him is in violation of anyone’s ownership rights.
Entrusting
Transfer of possession of goods.
Risk of loss
Allocation of loss between seller and buyer when the goods have been damaged, destroyed, or lost.
Breach by the seller
If the seller ships to the buyer goods that do not conform to the contract, the risk of loss remains on the seller until the buyer has excepted the goods or until the seller has remedied the defect.
Breach by the buyer
The seller may treat the risk of loss is resting on the buyer for a commercially reasonable time to the extent of any deficiency in the seller’s effective insurance coverage.
Agreement by the parties
The parties may by agreement allocate the risk of loss
Sale on approval
Transfer of possession without title to buyer for trial period.
Sale or return
Sale for which buyer has option to return goods to seller.
Consignment
Delivery of possession of personal property to an agent for sale.
Contract involving carriers
In shipment contracts, the seller bears the risk of loss and expense until the goods are delivered to the carrier for shipment; and destination contracts, the seller bears the risk of loss and expense until tender of the goods at a particular destination.
All other sales
For Merchant seller, risk of loss passes to buyer on the buyer’s receipt of the goods; for non-merchant seller, risk of loss passes to buyer upon tender of goods.
Bulk sale
Transfer of a major part of a merchant’s inventory made not in the ordinary course of the seller’s business.
