Sales and Secured Transactions Flashcards
WHAT is the “implied warranty of fitness?”
WHEN a buyer relies on a seller’s skill in selecting goods purchased
WHAT is an “implied warranty of merchantability?”
WHEN a seller ordinarily sells the goods purchased
i.e. In a sale of goods by a merchant who ordinarily sells goods of that kind, UCC imposes an implied warranty of merchantability requiring that the goods be fit for the ordinary purposes
WHAT are the seller’s obligations to a buyer, under UCC Article 2?
(1) To hold conforming goods; and
(2) To give the buyer whatever notification is reasonably necessary to enable the buyer to take delivery
WHEN would Article 9 of the UCC on secured transactions govern a lease?
WHEN a lease (intended for security) provides the lessee the option to become an owner of the property for a nominal consideration
key wording is when a lease is “deemed to be one intended for security”
WHO between a buyer and seller bear the risk of loss during a shipment (with terms “FOB place of shipment”)?
THE Buyer
Why? - Because Expenses and Risk after delivery to the carrier are borne by the buyer in a shipment contract
WHEN does a security interest attach to consumer goods?
WHEN a debtor acquires rights in them within 10 days after the secured party gives value
WHAT action, under Sales Article of the UCC would release a buyer from its obligations under a sales contract?
THE refusal of a seller to give written assurance of performance when reasonably demanded by the buyer
WHAT does the classification of goods depend on?
WHO holds the property and the use to which it is put
i.e. Inventory consists of goods, other than farm products, that (1) are held for sale or lease or to be provided under a contract for service
WHAT makes an express warranty?
ANY affirmation of fact or promise made by the seller to the buyer that relates to the goods (i.e. by any description of the goods or by any sample or model)
E.g. A seller providing a description of goods as part of the basis of a bargain
