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

The implied warrantly, that the seller has good title, and the right to transfer the title

Can only disclaim by specifically stating the seller does not warrant title.

Question 7

What is Warranty of Merchantability?

Answer 7

The warranty that the good is appropriately fit for ordinary purposes.

Can be disclaimed, with stmt’s such as “as is”, “with all faults”

Question 8

What is Warranty of Fitness?

Answer 8

Buyer relies on the seller to select a good that is appropriate for the buyer’s specific purpose.

Can be disclaimed, “as is”, “with all faults”

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.