Special Deck - Sales1

Question 1

Tom delivers(not a lease) Jerry a copier which Jerry may return within 30 days if he doesn’t want it. 30 days pass and Jerry still has the copier.

1. Who had title to the copier and why?
2. Under the same above conditions could there be a different holder of the title?

Answer 1

1. Tom still has title to the copier because the sale has not been made; sale must be completed before title and risk of loss pass.
2. Title could automatically pass to Jerry under the same conditions IF it is stipulated and agreed on in the contract. However, the problem doesn not mention it, therefore you assume they did not do it.

Question 2

What is another name for the Sales article of the UCC?

Answer 2

Statute of Frauds

Question 3

To be enforceable what is required under the Statute of Frauds?

Answer 3

• Applies for good over $500
• Must be in writing containing:
  
  • Quantity
  • Signture of party charged
  • Indicate existence of a contract
• Between merchants, written confirmation is sufficient
• EXCEPTIONS to writing requirement:
  
  • Oral contract for specialty goods or raw materials enforceable
  • Goods have been paid for.

Question 4

What difference in title warranty does a good faith purchaser make to the sale?

Answer 4

Unless the goods have been obtained illegally, selling to a good-faith purchaser changed a voidable title to a good title.

Question 5

What is contract rescission?

Answer 5

Places both parties in the postion they held prior to contract formation

Question 6

What is the “battle of forms”?

Answer 6

Where contract details can be altered between merchants without voiding the original contract.

Question 7

Define limits on the “battle of forms”

Answer 7

Between merchants, addtional details inlcuded in a acceptance of goods become part of the contract unless:

• Original terms prevent it
• New terms materially change offer
• Original offereor objects within reasonable period of time.

Question 8

Define a “firm offer”

Answer 8

Not available under common law, firm offer is an irrevocavle rule containg the following:

• Offeror must be a merchant
• Written form signed by merchant-offeror
• Time element automtatically involved, even if not stated: no longer than 3 months.

Question 9

Name the 5 types of shipping arrangements covered under the general rules of the UCC and detail each

Answer 9

1. FOB destination point-seller retains title and ROL until tendered at point of destination
2. FOB shipping point-buyer obtains title and ROL when goods delivered to common carrier
3. CIF Shipping point-Seller puts good in hands of carrier, obtains insurance in buyers name;title and ROL then pass to buyer. CIF stand for Cost, Insurance, Freight, and are included in price.
4. C & F - Cost and freight included in price. Title and ROL pass to buyer when tendered to carrier
5. COD - Collect on delivery - goods not deliverd unless paid for. Inspection allowed ONLY IF STATED in contract.

Question 10

If a controversy arises as to who risk is assigned to, what do the courts look to primarily?

Answer 10

Intent of parties involved in sale. Risk can be allocated by parties involved in sale: otherwise, risk is allocated acccording to guidelines of UCC

Question 11

If a seller is trying to correct non-conforming goods can he do it automatically?

Answer 11

NO. He must inform the buy of his intent, and be allowed a reasonable period of time in which to attempt it.

Question 12

In strict liability what defense would a merchant have against an accusation of tort?

Answer 12

If the plaintiff (the injured party) misused the product by using for a purpose other than what it was intended for.

Question 13

What is a warranty against infringement?

Answer 13

Warranty of title.

Question 14

How does a warranty of title protect the seller?

Answer 14

Warranty of title, or infringement, protects the seller if he is manufacturing a custom product according to specs receved from buyer. If the buyer provides specs that infringes upon another’s patent or tradmark HE, the BUYER, is liable.

Question 15

What is “basis of the bargain”? Define and discuss in detail.

Answer 15

Refers to how an express warranty is established. Any promise, oral or in writing, from the seller that relates to the goods and becomes part of the basis of the bargain creates an express warranty.

This also includes:

• advertisements
• any description of goods
• display of floor models.

No intent necessary to form on part of seller.

Seller can be merchant or non-merchant.

Question 16

If a seller discovers that a buyer on credit is insolvent does he have the right to reclaim his merchandise? What is the time limit?

Answer 16

Yes, the seller does upon making the demand of return to insolvent buyer.

Time limits:

• 10 within receipt of goods by buyer
• No limitation if buyer misrepresented solvency within 90 days of sale to seller.

Question 17

When dies risk of loss pass involving negotiable documents of title?

Answer 17

Upon delivery of the document of title

Question 18

With a document of title, what makes it negotiable? If it isn’t negotiable when does risk of loss pass?

Answer 18

It is negotiable if it has the words “bearer” or “order” on the document.

If it is non-negotiable then risk of loss passes when the warehouse is notified of transfer of the title.

Question 19

Define a bailment.

Answer 19

When the owner of personal property (bailor)delivers it to the possession of another (bailee), a bailment is created. The recipient is entrusted to return or dispose the item according to the owner’s wishes.

This is an example of how according to the UCC, one person has title to the gods (bailor), but another has the risk of loss (bailee)

Question 20

What is a warranty of fitness and how is it established?

Answer 20

Warranty of fitness means a warranty for a particular purpose, and it is established when the buy informs the seller what his particular purpose for the item is.