R7-M4 Contracts 3

Question 1

what is characteristics of the sales article of the UCC (article 2)?

Answer 1

• applies to all contracts for sale of goods
• imposes an obligation of good faith on both parties to a sales contract
• merchant sellers must also observe reasonable standards of fair dealing in the trade

Question 2

what are the 4 exceptions of sale of goods for $500 or more without the evidence by a writing signed by the party being sued?

Answer 2

SWAP
- Specially manufactured goods
- Written confirmations: where a merchant sends another merchant a written confirmation of a contract that is sufficient to bind the sender, it will also bind the recipient if he/she does not object within 10 days
- Admitted oral contracts
- Performed oral contracts

Question 3

what is express warranty?

Answer 3

• an express warranty will arise from:
  + any statement of fact or promise made by the seller
  + any description of the goods made by the seller
  + any sample or model shown by the seller
• any express warranty:
  + can be made by any seller (not limited to merchants)
  + may be oral or written
  + must be a part of the basis of the bargain (made at a time when it could have played some part in the buyer’s decision to buy)

Question 4

what are rules about acceptance of an offer?

Answer 4

• if you already accepted an offer but send shipment of nonconforming goods, it is a breach of contract
• if you have not already accepted an offer and send shipment of nonconforming goods, it is a counteroffer

Question 5

what requirement must be met for a writing to be an enforceable contract for sale of goods?

Answer 5

• the writing must contain a term specifying (or in terms of output of the seller or requirements of the buyer) the quantity of the goods

Question 6

what is general delivery rule of seller’s obligation to the buyer?

Answer 6

basic duty is to hold conforming goods for the buyer and give the buyer reasonable notice to enable the buyer to take delivery

Question 7

what is impossible vs impractical in performing a contract?

Answer 7

• impossible: occurs if an event takes place that makes the contract objectively impossible for any one to perform
• impractical: a contract will be discharged if it is extremely more burdensome than anticipated because of the occurrence of an unforeseen event

Question 8

what are rules of risk of loss?

Answer 8

• noncarrier cases: have duty to deliver to buyer upon
• carrier cases: either
  + a shipment contract (FOB seller’s place): risk of loss passes to the buyer when the goods are placed in the hands of a carrier
  + a destination contract (FOB buyer’s place): risk of loss passes to buyer when goods reaches the destination and seller tenders delivery
• if the seller is not a merchant, the risk of loss passes to the buyer upon tender of delivery of the goods

Question 9

what are risks in sale on approval and sale or return

Answer 9

• sale on approval (risk on seller until approval): sale is not final until the buyer gives approval (sale with trial periods)
• sale or return (risk on buyer until returned): the buyers has the title and risk of loss unless and until the goods are returned to the seller. ex: sale on consignment

Question 10

what is warranty of title?

Answer 10

• seller has good title and right to transfer that title
• no unstated liens or attachments on the goods
• cannot be disclaimed by a general disclaimer such as “as is” or “ with all faults.”
• can only be disclaimed by specific language (“I do not warrant title”) or by circumstances (judicial sale)