Govt. Regulation of Bus: UCC

Question 1

UCC Article 2

Answer 1

1. Uniform state law.

2. Governs sales of new and used goods, by merchants and non-merchants

Question 2

uniform state law

Answer 2

separately enacted in each state and varies little from state to state.

Question 3

evidence allowed under UCC Article 2

Answer 3

1. Evidence of oral or written contract.
2. course of dealing of the parties,
3. the industry standards, 4. AND the parties good faith.

Question 4

What does C.O.D. stand for?

Answer 4

cash on delivery

Question 5

What does C.O.D. (cash on delivery) mean?

Answer 5

1. It means that the buyer gives up his/her right to inspect goods before paying.
2. The buyer, however, can still sue is the goods are not per the contract.

Question 6

Can an offer can be withdrawn at any time prior to acceptance?

Answer 6

Yes, unless:

1. The offer was supported by consideration,
2. OR, the offer was made in writing by a merchant.

Question 7

Under Article 2, is a seller required to notify the buyer that it is holding goods which conform to the contract?

Answer 7

No.

Question 8

F.A.S. (free alongside ship) vessel at a named port

Answer 8

delivery term under which the seller must, at his own expense and risk, deliver the goods alongside the vessel in the manner usual in that port or on a dock designated and provided by the buyer

Question 9

Under Article 2, does a buyer have the right to demand adequate assurance of performance when it has learned of the seller’s insolvency?

Answer 9

Yes.

Question 10

Under Article 2, can a seller may retain up to $500 in liquidated damages even if the contract contains no such provision?

Answer 10

Yes.

Question 11

In the vent of a breach of contract for the sale of goods by a seller, the buyer has the right to recover the following:

Answer 11

1. contract price - market price at time delivery is due

2. Buyer not entitled to punitive damages.

Question 12

executory contract

Answer 12

promise in exchange for a promise

Question 13

When is an executory contract valid?

Answer 13

1. It is valid when all the elements of a contract have been satisfied (offer, acceptance, consideration, etc.) even though performance will occur later.
2. The fact that one of the terms is open or subject to adjustment does not render the contract unenforceable as long as the term can be determined.

Question 14

If A takes his tire and rim to B, Co. to fix it, but B fixes it and then sells it to C, then what is A’s recourse, if any?

Answer 14

1. A has recourse against B, Co, as well as against the employee who sold the tire and rim to C.
2. A cannot recover the tire and rim from C.

Question 15

firm offer under the UCC

Answer 15

makes an offer irrevocable w/out consideration for a period of up to 3 mos.

firm offer- offer by a merchant to buy or sell goods in a signed writing that by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed three months.

Question 16

Can a contract be modified w/out additional consideration?

Answer 16

Yes, as long as the modification was negotiated in good faith.

Question 17

Does a contract for custom-made goods have to be in writing to be enforceable?

Answer 17

No.

Question 18

strict liability

Answer 18

1. liability without regard to fault so that an injured party can recover even if the defendant was not negligent in any way.
2. Cases filed under strict liability will often prevail.

Question 19

UCC and risk of loss

Answer 19

The UCC provides that “the risk of loss passes to the buyer on his receipt of the goods if the seller is a merchant; otherwise the risk passes to the buyer on tender of delivery.”

Question 20

In determining which party will bear the risk of loss for goods damaged or lost while being unloaded at the buyer’’s place of business, Article 2

Answer 20

1. Relies upon the parties’ shipping terms.

2. If none, the seller bears risk of loss.

Question 21

If A pays B part of the purchase price for a good, but the good is lost before A can get it from B, who is liable for the loss?

Answer 21

A.

Question 22

If A and B enter a sales contract, and before delivery is due, A discovers B is insolvent, then…

Answer 22

A has the right to demand cash from B before shipping the goods.

Question 23

In a case of strict liability, can the mfg., wholesaler, or retailer be held liable?

Answer 23

All of the above can be held liable if if an injured party can prove that:

1. the product was defective either in design or manufacture,
2. the defect was unreasonably dangerous,
3. AND the defect was the cause of the injuries.

Question 24

Under Article 2, when can title to goods pass?

Answer 24

1. When they are identified to the contract;

2. Goods cannot be identified until they are completed.

Question 25

Title revests when…

Answer 25

goods are rejected, whether the rejection was rightful or wrongful.

Question 26

Article 2 and insurable interest

Answer 26

Once goods are identified, B can have an insurable interest in goods in A’s possession.

Question 27

If A’s goods are stolen and pawned to B, who sells the goods to C, what is A’s recourse?

Answer 27

A can recover the goods to C or recover monetary damages from B.

Question 28

warranty of merchantability

Answer 28

1. given by merchants who regularly deal in goods of the kind sold. 2. The warranty is automatic, so nothing in writing is required.
2. It is not a warranty against all defects, simply a warranty that the goods are of average quality, fit for the ordinary purposes for which such goods are used.

Question 29

Every sale of goods includes…

Answer 29

an implied warranty of title, which includes a warranty against patent (and copyright) infringement.

Question 30

Every sale of goods by a merchant includes…

Answer 30

implied warranty of merchantability plus any other express or implied warranties which arise by the contract, or are implied by the circumstances.

Question 31

express warranty

Answer 31

created by providing samples and guaranteeing that the quality of product will be similar to that of the samples

Question 32

How does the term “As Is” affect a sale of goods by a merchant?

Answer 32

1. Means that the warranty of merchantability is eliminated, but not other implied warranties.
2. The seller still warrants good title to the goods in question.
3. Does not eliminate express warranties.

Question 33

Are express and implied warranties generally cumulative?

Answer 33

Yes.

Question 34

If A gets sick after eating food served by B’s restaurant, A has grounds to recover…

Answer 34

for breach of warranty under Article 2.

Question 35

If A failed to make delivery of goods to B on the date agreed, then B has the following the rights:

Answer 35

1. The right to cancel the contract.
2. The right to recover so much of the price as has been paid.
3. The right to cover and have damages.
4. The right to specific performance if the goods are unique/custom-made and ordered.

Question 36

In a case of custom-made goods, when can A (maker) enforce a contract against B?

Answer 36

1. As long as a substantial beginning to the custom-made goods has been made.
2. If B has tendered payment to A, the contract is enforceable.
3. If B admits to ordering 1/2 of the goods, then A can only collect on 1/2 the goods.

Question 37

Is a price reduction enforceable?

Answer 37

If both parties agree to it, yes.