Sales Law

Question 2

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

Answer 2

Only sales of goods are covered under the UCC.

Question 3

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

Answer 3

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 4

What are the elements of a Firm Offer?

Answer 4

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 5

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

Answer 5

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 6

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

Answer 6

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 7

What is a Warranty of Title?

Answer 7

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

All items sold must have Warranty of Title

Can NOT be disclaimed

Question 8

What is Warranty of Merchantibility?

Answer 8

This good will do its intended purpose

Can be disclaimed

Question 9

What is Warranty of Fitness?

Answer 9

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

Can be disclaimed

Question 10

What is strict liability with respect to buyer protection?

Answer 10

Manufacturers of goods cannot disclaim that their products will be safe

Can be liable if negligent

Question 11

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

Answer 11

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 12

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

Answer 12

Buyer must sue to recover damages within 4 years.

Question 13

Qualifications of merchant firm offer

Answer 13

1. Seller must be merchant
2. In writing & signed
3. Gives assurance it will be kept open for a certain time (3 mo. max)

Question 14

What makes UCC unique

Answer 14

• only have to include quantity
• perform perfectly
• minor change = acceptance
  
  • this is a counteroffer in common law

Question 15

Exceptions to needing writing for sale of goods $500+

Answer 15

SWAP

Speciality mfg goods
Written confirmation between merchants
Admitted in court contracts
Performed contracts

Question 16

Risk of loss - no carrier, non merchant

Answer 16

Passes on tender of delivery

Question 17

Risk of loss - no carrier, merchant

Answer 17

Passes on actual delivery

Question 18

Risk of loss - carrier, shipment contract

Answer 18

Passes on delivery to carrier

Question 19

Risk of loss - carrier case, destination contract

Answer 19

Passes at destination

Question 20

Risk of loss - breach

Answer 20

Remains with seller

Question 21

Risk of loss - sale on approval

Answer 21

Seller until approval

Question 22

Risk of loss - sale or return

Answer 22

Buyer until returned