Sales_Law

Question 1

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

Answer 1

Only sales of goods (tangible personal property that are movable) 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

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 period of time - 3 months max (regardless lack of consideration)
• Only merchants (deals with goods on a regular basis) 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 (SPAM)?

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. - SPAM
  
  • Oral contracts are binding for special or uniquely-made items
  • performance of contract already occured
  • admitted in court by defendant
  • merchant in goods - bound by their silence

Question 5

When does title and risk of loss transfer on a sale of goods? (5)

Answer 5

• FOB shipping point: Title transfers at point of shipment (i.e. when loaded on truck) → goods are delivered to common carrier
• FOB destination: Title and risk transfers once item is delivered/tender to the buyer → goods reach destination
• Nonconforming goods → seller would have risk of loss until nonconforming goods were accepted by buyer or cured
• risk of loss transfer from a merchant seller to a buyer → when buyer physically receipt of goods
• risk of loss transfer from a nonmerchant seller to a buyer → when tender of good

Question 6

What is a Warranty of Title?

Answer 6

• good and valid title
• free of liens or claims of 1/3 parites
• **disclaimed must be explicit in the contract **
• **implied warranty **

Question 7

What is Warranty of Merchantability?

Answer 7

• this good will do its intended purpose /ordinary use
• when seller is a merchant
• **can be disclaimed ** - use phrase as “as is” or “with all faults”
• implied warranty
• arise as a matter of the law

Question 8

What is Warranty of Fitness?

Answer 8

• when t**he buyer is relying on the seller’s judgment in selecting the product **
• the seller warrants that this good is the right choice for you based on the seller’s expert opinion
• **can be disclaimed **- use phrase as “as is” or “with all faults”
• **implied warranty **

Question 9

What is strict liability with respect to buyer protection?

Answer 9

• Protecting consumers from unsafe products
• the plaintiff must establish the following: (1) the seller was engaged in the business of selling the product, (2) the product was defective, (3) the defect was unreasonably dangerous to the plaintiff, and (4) the defect caused injury to the plaintiff. If the plaintiff can prove these elements, then the seller will be liable regardless of whether the seller was negligent or at fault for the defect.
• manufacturer/seller is liable despite lack of privity, ignorance of defect, lack of negligence, lack of due care by injured party → exception: natural disaster
• cannot be disclaimed

Question 10

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

Answer 10

• Buyer can reject some or all ore none of the shipment
• Must notify the seller
• Must give seller a chance to remedy the situation
• follow reasonable instructions from the seller in diposing the goods
• **May avoid cost incurred in relation to the rejected goods **

Question 11

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

Answer 11

• Buyer must sue to recover damages within 4 years after breach
• Party can agree for another period more than one year

Question 12

Acceptance of sales contrats

Answer 12

• **Does not have to mirror the offer **
• **major change NOT OK **
• shipping nonconforming goods constitutes an acceptance unless seller notify the buyer that the shipment was an accommodation
• merchant is bound by their silence

Question 13

out put contract

Answer 13

• supported by consideration because the seller has agreed not to sell that output to any other party
• reasonable price and quantity to be defined by output contract

Question 14

Express Warranty

Answer 14

• any statement or claims that become a basis of the bargain
• includes a description, sample or model
• **cannot be disclaimed **

Question 15

Liquidated damages

Answer 15

• enforced if not punitive
• amounts to a reasonable estimate of what the loss will be in the event of a breach of contract

Question 16

Seller remedies against the buyer upon breach (6)

Answer 16

1. stop delivery of goods
2. resell the goods
3. recover compesatory and incidental damages
4. recover the goods from the buyer upon the buyer’s insolvency
5. cancel the contract
6. cure non-confirming goods before the contract due date

NO punitive damages

Question 17

Buyer remedies breach (5)

Answer 17

1. accept all, some or none of the non-confirming goods
2. purchase subsitute goods and recover excess paid from seller
3. recover incidental and consequential damage
4. specific performances - very unique goods
5. cancel the contract
   NO punitive damages

Question 18

Common carriers liability

Answer 18

Common carriers are licensed to provide transportation for public

Liability is based on strict liability, so common carriers are liable for damage to goods being transported even if loss caused by third parties or by accidents

(1)  **_Exceptions_--common carrier NOT liable for**

• *(a)** Acts of shipper, such as improperly packing goods to be shipped
• *(b) ** Acts of God, such as earthquakes
• *(c) ** Acts of public enemies
• *(d) ** Loss because of inherent nature of goods(2) Common carriers allowed to limit liability to dollar amount specified in contract