Chapter 11 - Sales Contracts Flashcards
How does an offer in a sales contract differ from an offer in a Common Law contract?
Offers in sales contracts can have vague terms (based on standard trade practice or past experience)
What is a firm offer and what are the conditions for it?
A firm offer is an offer that cannot be revoked even if no consideration was provided by the offeree
SUM
Signed promise in writing
Up to three months (enforceable for three months)
Merchant (must be made by a merchant in goods)
What are some minor variations allowed in acceptance of an original offer?
Change in payment
Change in warranty (minor changes only)
What is a special condition about consideration for a sales contract?
Sales contracts do NOT require additional consideration to make changes to a contract if it is a good faith price increase
If a buyer picks up goods from the seller when is the risk of loss transferred?
If seller is a merchant, then it is when the goods are received by the buyer
If seller is a non-merchant, then it is when the goods are tendered (attempted to transfer) to the buyer
What are two principles for risk of transfer that override all other issues?
Neither title nor risk can pass on goods until the goods exist
Once they exist, they must also be identified in the contract
What are two types of conditional sales?
- Sale on approval: Contract that permits the buyer to get the goods and decide on purchasing them later. Title and risk of loss transfer as soon as the goods are accepted explicitly, or the time has elapsed.
- Sale or return: Contract where buyer is buying goods for resale and is given the right to cancel the sale if they cannot sell them to others
What is an express warranty?
Statements or claims that become a “basis of the bargain.” This would include a description, sample, or model.
CANNOT be disclaimed
What is an implied warranty of title and infringement?
Seller warrants good title, no liens or encumbrances, transfer doesn’t violate law or infringe on rights of third parties, etc
Automatically exists in all sales. If there is a disclaimer it must be explicit in the contract.
What is an implied warranty of merchantibiity?
Seller claims goods are fit for normal uses and they can perform under claims or descriptions on packaging.
Warranty is only for goods sold by a merchant. Can be disclaimed.
What is an implied warranty of fitness for particular or ordinary purpose?
Seller promises goods will meet the specific needs of the buyer.
Only implied when buyer relies on seller’s judgement. Can be disclaimed.
What defense is not allowed under the product liability law?
Cannot use the privity defense
What must the plantiff prove in a negligence case for product liability?
Absence of due care by defendant
Defect of product caused by carelessness
Damages to plantiff resulting from defect
What must plantiffs prove under the strict liability law?
A defect or unreasonable danger in the product
Damages caused by this danger
Danger existed when the product left the defendant’s control
Defendant is in the business of selling the product
