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

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

If value of goods sold is > $500; sales contract must be in writing

Exceptions: Merchants can enter into oral contracts for > $500 items.

Oral contracts are binding for special or uniquely-made items (i.e. custom cabinets or custom furniture that could not be sold if buyer reneged)

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

implied

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

cannot be disclaimed by a general disclaimer such as “as it”, “with all faults”, “Seller makes no warranties beyond” “i disclaim any and all warranties”

it can be disclaimed only specifically “I do not warrant title”

Question 7

What is Warranty of Merchantability?

Answer 7

This good will do its intended purpose

Arises as a matter of law when the seller ordinarily sells the goods purchased

Can be disclaimed: ‘as is’ or ‘with all faults’

Is an implied warranty, need not be in writing

Question 8

What is Warranty of Fitness?

Answer 8

This good is the right choice for you based on the seller’s expert opinion

Can be disclaimed

implied

Question 9

What is strict liability with respect to buyer protection?

Answer 9

Manufacturers of goods cannot disclaim that their products will be safe

Can be liable if negligent

Question 10

What are non-conforming goods with respect to buyer protection?

Answer 10

Buyer can reject some or all of the shipment if the seller didn’t perform as agreed and ship what was expected

Must give notice

Must give seller a chance to remedy the situation

Question 11

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

Answer 11

Buyer must sue to recover damages within 4 years.

Question 12

Sales Article under UCC: Buyer and Seller remedies

Answer 12

• anticipatory repudiation: sue or wait
• right to demand assurance if reasonable grounds exist
• duty to mitigate

*** punitive damages are NOT available

Question 13

warranties

Answer 13

in sales under UCC the seller must make a ‘perfect tender” and to fulfill this requirement the goods must conform to all warranties:

1. express warranty
2. implied warranty of title
3. implied warranty of merchantability
4. the implied warranty of fitness for a particular use

Question 14

express warranty

Answer 14

1. goods will conform to statement of fact, descriptions, samples or models
2. the express warranty is part of the basis of the bargain
3. can be made my any seller (not limited to merchants)
4. very difficult to disclaim