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Contracts > Contracts, Sales, Patents/ Copyrights > Flashcards

Contracts, Sales, Patents/ Copyrights Flashcards

0
Q

Risk of loss passes for Nonmerchant seller:

A

On Tender of Delivery

(Risk passes when pay for (tender delivery), so buyer has risk of loss even if doesn’t have physical possession/ hasn’t picked up item yet)

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1
Q

What happens when a party fails to perform something he or she is contractually
obligated to do (ie, when there’s a breach of contract):

A

Remedies (if the party has no defenses (contract enforceable))

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2
Q

When does risk of loss transfer if it’s a merchant seller?

A

On Actual Delivery

(When buyer takes physical possession of item. If paid for but hasn’t picked up from the store, the merchant still has risk of loss)

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3
Q

Free Along Side (FAS)

A

Shipment Contract –> buyer has risk of loss

FAS is a price term that requires the seller to deliver the goods alongside of a specified vessel. Risk of loss passes to buyer when seller gets goods alongside the vessel.

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4
Q

Cost, Insurance, Freight (CIF)

A

Shipment contract –> Buyer has risk of loss

CIF means the contract includes the cost of the goods, insurance, and freight. Risk of loss inviter during shipment.

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5
Q

Free on board (FOB)

A

Could be shipment or destination contract, depending on the city named after FOB.

If seller’s city: risk transfers when in seller’s city, so it’s a shipment contract and the buyer has risk of loss during shipment.

If buyer’s city: risk transfers when in buyer’s city, so it’s a destination contract and the seller has risk of loss during shipment.

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6
Q

Who has risk of loss of seller sends nonconforming goods?

A

Seller.

Risk of loss during shipment remains with the seller, regardless of the shipping terms, UNLESS buyer accepts he nonconforming goods.

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7
Q

Specific performance for

A

Items unique or land*

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8
Q

Cover

A

Buyer may “cover” (buy comparable goods and sue the seller for the difference between he contract price and the cost of cover)

(Difference between cost of original contract and cost of cover = extra amount you had to pay bc seller breached)

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9
Q

Replevin

A

When suing for goods that you believe are in the possession of another wrongfully

Want an item because it’s unique and I cannot cover (buy comparable goods and sue for the increased cost I had to pay), and can’t sue for specific performance –> it’s replevin

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10
Q

To establish a cause of action based on strict liability in tort for personal injuries resulting from using a defective product, the plaintiff must prove:

A
  • Defective
  • Dangerous
  • Dealer (was engaged in the business of selling the product)
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11
Q

Voidable title occurs when

A

Accept a bad check

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12
Q

Good faith requirement that must be met by a merchant

A

UCC imposes an obligation of good faith on both parties to a contract. For merchants, this includes the duty to observe reasonable commercial standards

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13
Q

For a rain check to meet requirements of merchant’s “firm offer”

A
  • sale of goods
  • merchant seller
  • in writing and signed by merchant
  • words of firmness (promise to keep the offer open) included in writing
  • if no time is stated, offer irrevocable for a reasonable time, up to 3 months

90 days = max time offer open

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14
Q

Output contract

A

Under the UCC, a contract to sell all of one’s output is valid even though an exact quantity is not stated in the contract

(Output or requirements contract is considered a sufficiently precise quantity)

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15
Q

Under UCC, risk of loss depends on:

A

Delivery term

Not: title/ ownership

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16
Q

What is a firm offer?

A

An offer that must remain open despite the absence of consideration

(Can only be made my merchants and must be in a signed writing)
(If doesn’t state it’s period of removability, must remain open for a reasonable time, not to exceed 3 months)

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17
Q

Warranty of title (under the UCC Sales Article)

A

Provides that the seller deliver the goods free from any lien of which the buyer lacked knowledge when the contract was made.

(Can be disclaimed by specific language or circumstance(judicial sale))

*auto arises in every sale of goods (need not be in writing, seller need not be a merchant)

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18
Q

Action for strict product liability

A
  • sold the product in a defective condition
  • seller in the business of selling goods dealer
  • dangerous - defect caused the plaintiff’s injury
  • (product expected to and did reach consumer without substantial change)
  • injured person need NOT be in privity**
  • seller’s actions / intent do NOT matter*** (seller need not have failed to exercise due care; liability is strict and imposed on even a careful seller)
  • *strict products liability extends to all foreseeable users ( privity not required)
  • seller need NOT have been aware of the defect
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19
Q

Most important in determining who bears risk of loss in sale of goods contract:

A

Contract’s shipping terms

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20
Q

FOB place of shipment contract, risk of loss passes to buyer when the goods are:

A

Delivered to the carrier **

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21
Q

On anticipatory breach of contract (or repudiation), the nonbreaching party may:

A
  • demand assurances of performance
  • cancel the contract

*no right to punitive damages under contract law in general

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22
Q

Seller’s obligation to buyer (unless otherwise agreed to) is to:

A

Hold conforming goods and give buyer whatever notification is reasonably necessary to enable the buyer to take delivery

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23
Q

Liquidated Damages

A

An injured party can’t necessarily collect any amount of liquidated damages specified in a contract: must not be penalty and must be reasonable amount.

*seller may retain up to $500 of the buyer’s deposit on the buyer’s breach (even if no provision for liquidated damages in the contract)

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24
Q

Rights available to seller when a buyer materially breaches sales contract include:

A
  • right to cancel the contract

- right to recover damages

25
Q

Sales Article imposes what duty on all parties?

A

Duty of good faith

GR: warranties may be disclaimed

26
Q

Warranty of merchantability can be disclaimed:

A
  • specifically,
    Or
  • by words such as “as is” or “with all faults”
27
Q

Does an action for strict product liability require a showing of negligence?

A

No. The product must have been unreasonably dangerous when it left the seller’s hands.

28
Q

In a noncarrier case, risk of loss passes from a merchant seller:

A

On actual delivery of the goods into the buyer’s possession

29
Q

Tender of delivery at merchant’s place of business pass risk of loss?

A

No. Passes title/ ownership, but not risk of loss transfer because if seller is a merchant, risk of loss passes to the buyer only when buyer takes possession.

30
Q

Failure to give adequate assurance when reasonably demanded is a form of:

A

Anticipatory repudiation.
It constitutes a breach and discharges the buyer (release buyer from all its obligations).

(If goods destroyed after risk of loss passes to buyer– buyer not discharged bc buyer is obligated to pay for the goods since the buyer had the risk).

(If delivery terms are impracticable, the buyer must accept delivery by some other reasonable means)

31
Q

If buyer repudiates:

A

Seller had the right to hold the buyer to the contract (sue for breach); the buyer is not discharged unless the seller cancels the contract. If the buyer retracts the repudiation in a timely fashion, the contract is treated as if there were no repudiation and the buyer remains fully liable.

32
Q

COD

A

Cash on Demand

Buyer has reasonable amount of time after delivery in which to inspect the goods and reject them if they are nonconforming

  • in COD contract, buyer has NO right to inspect goods before delivery, as there is a duty to pay cash on delivery

GR for sales contracts: payment and possession are concurrent conditions; generally no right to possession before payment

*COD: requires payment on delivery

33
Q

Every sale includes a warranty that the seller has title unless:

A

The warranty is specifically disclaimed
or
The facts give the buyer notice that there is no such warranty (ie, judicial sale).

The warranty is NOT disclaimed by -general- disclaimers such as a statemt disclaiming “any and all warranties”

34
Q

Legal remedies available to buyer when seller fails to transfer and deliver goods identified in a contract:

A
  • recover the identified goods (capture) *when buyer has paid part of the purchase price, the buyer may take possession of the goods rough replevin**)
  • suit for specific performance (when substitute goods cannot be purchased bc unique items)
  • purchase substitute goods (cover)
35
Q

Replevin

A

Lawsuit that enables a person to get back personal property taken wrongfully, and get compensation for resulting losses

Replevir
Plevir= to pledge
Replegiare= to redeem a hing taken by another

36
Q

Article 2 under UCC

A

Sales Article

37
Q

Sales Article under UCC may not involve what type of property?

A

Real property**

38
Q

Under Article 2 an offer can be accepted by:

A
  • an offer to ship, or
  • prompt shipment

Shipment of nonconforming goods constitutes both an acceptance and a breach, unless notice is sent prior to shipping that the goods are only an accommodation.

39
Q

Shipment of nonconforming goods accompanied by a notice of accommodation:

A

Is a counteroffer

If nonconforming goods shipped without notice, not a counteroffer. It would then be an acceptance and a breach.

40
Q

Which warranty are not always a result of a sale:

A

Implied warranty of fitness for a particular purpose

Arises only when the buyer relies on the seller to choose goods suitable for the buyer’s purposes (not occur if the customer is not relying on the seller to choose suitable goods, but instead specified the goods he wanted).

41
Q

Under the UCC, title to goods passes when:

A

Agreed upon by the parties

** if not agreed upon, title generally passes when goods are delivered

42
Q

Before a buyer can have an interest in goods:

A

Goods must be identified to the contract

43
Q

Fair Use Doctrine

A

Limitation of rights of copyright holder (allows use of copyrighted work without the owner’s permission for purposes of:

  • criticizing, comments
  • news reporting
  • teaching
44
Q

Copyrights

A

Author’s life + 70 years

45
Q

Who owns copyright?

A

Generally creator (unless employee or work for hire); transfer must be in writing

46
Q

Copyright infringement

A

No fair use; only must prove ownership and violation of rights

*civil and criminal penalties

47
Q

To be a patent, what 3 characteristics must the invention, process, or idea have?

A
  • novel
  • useful
  • nonobvious

Patents include: computer programs (not “source code” that’s copyright)

48
Q

Patents give rights for how many years?

A

20 years

49
Q

Remedies for patents infringement

A

**no criminal (unlike copyright)

50
Q

Is lack of knowledge a defense for patent and copyright infringement?

A

No. Don’t have to prove fault to take legal action against someone for infringing.

51
Q

Copyright law protects works:

A

In a tangible medium

Not: process, design, invention –> those are patents

52
Q

Copyright examples

A
  • source code
  • sculpture
  • choreography
53
Q

Fair Use

A

The right of persons who do not own the copyright to use parts of the protected work without the owner’s permission for purposes of teaching, criticism, news reporting.

54
Q

Who has the risk of loss when seller ships nonconforming goods under FOB seller’s shipping dock contract?

A

If seller ships nonconforming goods, risk of loss remains on the seller *regardless of the shipping terms. (Under UCC the seller must make perfect tender).

Risk of loss for ALL the goods stays with seller in this situation, even if some of the goods are conforming.

55
Q

What happens if seller ships nonconforming goods FOB- seller’s shipping dock and the goods are destroyed during shipment?

A

The contract is voidable because the goods are nonconforming**

When goods do not conform to the contract for any reason, the buyer may reject all, some, or none of the goods

56
Q

If no specific delivery date stated, goods must be delivered:

A

Within a reasonable time

57
Q

Destruction of goods while in transit:

A

NOT make contract void.

*will cause one party to bear the risk of loss

58
Q

Shipment of nonconforming goods is:

A

Breach of contract (both an acceptance and a breach)

*breach of contract does NOT depend on buyer’s rejection; seller breached contract as soon as seller shipped nonconforming goods.**

59
Q

Notice of accommodation of nonconforming goods if already accepted:

A

Acceptance and breach of contract. It’s only a counteroffer if seller already accepted the contract prior to shipment

60
Q

Title passes when:

A

Seller completes his delivery requirements

For nonconforming goods, title remains with buyer until he rejects the goods (with nonconforming goods the rule is different for risk of loss –> in shipment contract involving nonconforming goods, risk of loss remains with seller regardless of the shipping term.

*passage of title does NOT depend on buyer’s right of inspection.

61
Q

4 elements required to prove common law ordinary negligence

A
  • duty of care
  • breach of duty
  • damages
  • causation

Contracts (4 decks)

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