Sales Law

Question 1

What sales are covered under the Uniform Commercial Code (UCC)?

Answer 1

Only sales of goods are covered under the UCC.

Question 2

What elements are needed for a sale covered under the Uniform Commercial Code (UCC)?

Answer 2

Offer - You offer to sell something at a price
Acceptance - the other party accepts
Consideration - Something of value has been exchanged for the goods
Note: The UCC only covers sales of goods.

Question 3

What are the elements of a Firm Offer?

Answer 3

You offer to sell something at a price and keep that offer open for a set period of time (cannot be revoked)
Offer must be in writing
3 months max
Only merchants can make firm offers

Must be in writing and signed

Question 4

Under what situations are sales of goods covered by the Statute of Frauds? What are the exceptions?

Answer 4

“GROSS” - covered by the Statute of Frauds
Gross worth $500 or more
Real Estate Sales
Over one year required to perform contract
Suretyship
Statements in consideration of marriage

Exceptions are “SPAM”
Specifically mfg good at request of buyer
Performance of contract already has occurred
Admitted in court by defendant
Merchants in goods not objecting to written confirm w/in 10 days is treated as if they signed it

Question 5

When does title and risk of loss transfer on a sale of goods?

Answer 5

If terms are:
FOB shipping point: Title transfers at point of shipment (i.e. when loaded on truck)

FOB destination: Title and risk transfers once item is delivered

Question 6

What is a Warranty of Title?

Answer 6

The seller has the right to sell the good and no one else can stake claim to that good

Question 7

What is Warranty of Merchantability?

Answer 7

The seller promises that the goods are fit for their normal uses and that they perform in accordance with any claims or deductions on their packaging.

Merchant can disclaim this warranty

Question 8

What is Warranty of Fitness?

Answer 8

Seller promises that the goods will meet the specific needs of the buyer.

Can be disclaimed

Question 9

What is the statute of limitations with respect to buyer protection?

Answer 9

Buyer must sue to recover damages within 4 years.

Question 10

Product Liability Law

Answer 10

UUC permits claims when a user of a product suffers an injury or illness in connection with it.

Defendant is not required to use the privity defense (don’t have to have purchased it from the defendant) so a manufacturer can be held liable.

Question 11

Breach of Warranty, in such cases what does a plantiff have to demonstrate?

Answer 11

• An express or implied warranty that wasn’t effectively disclaimed
• An injury or illness that resulted from the breach

Question 12

Strict Liability Law cases, what must a plantiff prove?

Answer 12

• Defect or unreasonable danger in the product
• Damages caused by this danger
• Danger existed when the product left the defendent’s control
• Defendent is in the business of selling the product

NOTE: No need to prove that the defendent caused the danger.

Question 13

What are “seller’s remedies” when the buyer is not performing duties stated in a contract?

Answer 13

• Right to resell the goods
• Right to stop the carrier from delivering goods
• Cancel the contract
• Recover damgaes (not punitive damages)

Question 14

What are “buyer’s remedies” when the seller is not performing duties stated in a contract?

Answer 14

• Accept all, some, or none of the goods
• Purchase substitute goods and recover the excess paid from the seller
• Recover damages (not punitive damages)
• Rescission of contract

Question 15

In and implied warranty, the statute of limitations begins when?

Answer 15

When delivery of the defective goods is tendered

Question 16

What is the difference in the terms of an offer between the UCC and Common Law?

Answer 16

Sales Contracts governed by the UCC can have vague terms, unlike the Common Law requirement for contracts of real property or services.

Under UCC, only the type and quantity of goods needs to be explicit.

Question 17

What are two types of sale contracts where there are vague terms in the contract?

Answer 17

Output Contract - buyer agrees to purchase as much as the seller is able to produce in a period of time

Requirements Contract- seller agrees to supply all needs of the buyer of a specified product for a period of time

Question 18

What is the difference in acceptance of a contract between the UCC and Common Law?

Answer 18

Under Common Law, a contract can be revoked at any time prior to acceptance.
Under UCC, a contract can have a firm offer which cannot be revoked if certain conditions are satisfied.

The UCC allows minor changes to term of a contract when buyer accepts the contract, unlike Common Law

Question 19

What are the differences in accepting a contract between merchants and non-merchants

Answer 19

A merchant is bound by silence, a non-merchant is not - it is assumed the offeror has a agreed to changes in terms if they don’t object, it is not assumed for non-merchants.

Question 20

When does title and risk transfer if the customer picks up the goods, and no delivery?

Answer 20

Title passes when contract is formed

Risk of loss occurs when goods received by buyer

Question 21

What are express warranties and implied warranties?

Answer 21

Express warranties - refer to specific promises and claims about the goods made by the seller (reason why the buyer made the purchase usually)

Implied warranties- refer to promises that are present without any specific statements by the seller

Question 22

What must a plantiff prove in a negligence product liability case?

Answer 22

Absence of Due Care
Defect in the product caused by carelessness
Damages to the plantiff resulting from defect.