Module 7: Sales

Question 1

Merchant

Answer 1

Buyers and sellers can both be deemed merchants if they do this as a customary activity (business-to-business relationships) versus consumers

Question 2

Uniform Commercial Code Article 2

Answer 2

governs sales of goods, incorporated in state law

Question 3

UCC Contract Offers

Answer 3

option contracts: written offer from merchant cannot be revoked for time specified or reasonable time (unlike a regular contract that can be revoked before acceptance)

Question 4

UCC Perfect Tender Rule

Answer 4

Perfect Tender Rule: no substantial performance - for goods merchants, must provide exactly what’s specified on the contract

Question 5

UCC Perfect Tender Rule Exception

Answer 5

installment contracts give opportunity to cure shortages or issues in a future installment

Question 6

UCC: Seller’s Right to Cure

Answer 6

Seller allowed to cure any product deficiency by providing replacement goods, as long as its before the promised delivery date - after delivery date only possible w/ price break

Question 7

UCC: Buyer’s Ability to Revoke Acceptance

Answer 7

Buyer can revoke acceptance if goods are non-conforming, affecting value and it’s difficult to discover they were defective initially; Can be revoked if seller does not send promised conforming goods to replace defective goods; Notice of revocation must be within reasonable time and condition of goods can’t be altered

Question 8

UCC Contract Modification

Answer 8

UCC contracts can be modified in good faith without consideration (payment for changes) as along as both parties agree

Question 9

UCC and Statute of Frauds

Answer 9

even though contracts for sale of goods over $500 must be in writing unless the goods have been delivered and accepted, will be considered a contract

Question 10

Express Warranty

Answer 10

specified time frame for certain wear and tear repairs

Question 11

Implied warranty of merchantability

Answer 11

every item sold carries an implied warranty that products should work at time of purchase

Question 12

Implied warranty of fitness for a particular purpose

Answer 12

certain specified qualities that were advertised should be satisfied (a parka that’s not defective but doesn’t hold up to advertised temperature or weatherproofing)

Question 13

Sales: Expectation damages

Answer 13

Party is entitled to the benefit for what they contracted for

Question 14

Buyer’s damages

Answer 14

Expectation damages, right to cover by purchasing a substitute (difference b/w what you paid for the substitute); additional damages for being out of goods/time