Terms of the K Flashcards
Unconscionability - two kinds
1) Procedural = unfair conduct in the formation of the K
Ex: During the contracting process there was fine print, misrepresentation or unequal bargaining power
2) Substantive = unfairness in the terms of the resulting bargain
Ex: Reasonable person would find that the contractual terms produce an unexpected and unfair result
Unconscionability - Waivers
+ What is in the waiver should be clear & obvious to all parties regardless of education/experience otherwise it may be found unconscionable
+ Green Tree Serving v. Duncan - An arbitration clause may render a mobile-home contract unenforceable if it allows the lender to seek judicial remedies for enforcement and foreclosure but requires the homeowner to waive her rights to judicial remedies
Unconscionability - When a court finds UNC it can
+ refuse to enforce K, enforce K but remove the offending clause, or limit applicability of the clause to avoid unconscionable result
+ Parties have an opp’t to present evidence to the commercial setting & purpose and effect to help court make the determination
Identification of Goods - general favor is towards
General favor toward early identification
Identification of Goods - In the absence of an explicit agreement identification occurs:
+ If goods already existing & identified –> when the K is made
+ Future goods (other than crops or unborn young to be born within 12 months) —> When goods are shipped, marked or otherwise designated by the seller as goods to which the K refers
+ Special Future Goods (crops or unborn young to be born within 12 months) —> When crops planted, once crops grow, young are conceived if they are to be birth within 12 months after contracting, or sale of crops to be harvested within 12 months or within the next normal harvest reason whichever is longer
Risk of Loss - General rules
+ If seller is a merchant the risk of loss passes to the buyer upon receipt of goods
+ If seller is a non-merchant the risk passes to buyer upon tender of delivery
Risk of Loss - when title to goods can’t pass
Title to goods cannot pass prior to identification to the contract
Risk of Loss - C&F defin & what it means for the seller
+ C&F = price includes cost & freight to destination
+ C&F means the seller at his own expense and risk:
a) Puts good into possession of carrier & obtains a negotiable bill of lading covering entire transport
b) Load the goods & obtain receipt showing the freight has been paid/provided for
c) Obtain insurance to cover the goods & provide payment to buyer for the loss
d) Prepare invoice of the goods/any documents required to effect shipment/comply with the K
e) Forward/tender with commercial promptness all documents required to perfect buyers rights
Risk of Loss - CIF meaning & obligations
Term C.I.F. imposes the same obligations as C&F except obligation as to insurance
Delivery Terms - two types of Ks
Shipment K = Seller gives goods to carrier then buyer assumes risk of loss
Destination K = Parties agree the goods must be delivered by carrier before the risk passes from seller to buyer
Delivery Terms - Shipment K
Defin = Seller gives goods to carrier then buyer assumes risk of loss
+ Presumption under A2 is that a K is a shipment K
+ IF K is silent then a shipment K is enforced
+ Risk of loss does not shift from the seller to the buyer upon delivery of the goods to the carrier if the seller fails to promptly notify the buyer of the shipment - whether notice is prompt is a case-by-case basis
+ CIF & CF always mean a shipment K
Delivery Terms - Destination K
Parties agree the goods must be delivered by carrier before the risk passes from seller to buyer
