UCC Flashcards
Good must be identifiable
before any interest can pass from seller to buyer; therefore risk of loss has not passed yet
Goods that are in existence before the contract is entered into
are identified when contract is formed.
Fungible goods
goods that cannot be identified due to homogeneous qualities or that are mixed together that they can’t be distinguished by individual units.
Future goods
goods to be manufactured: goods are identified when shipped, marked or otherwise designated for the buyer.
once goods are in existence and identfied
title and risk of loss can pass at the time parties expressly agree
Delivery Terms
FOB- place of shipment- title and ROL pass upon delivery of conforming good to the carrier
FAS- free alongside vessel
Passage of title
Determine whether contract is a delivery or nonshippment contract
- in absense of seller’s place of business
Non delivery/shipment contracts
passage of title
determine whether there is a document of title involved with goods and the contract
if NONE, title passes at moment the contract is made. (identification and title passage occur at the same time)
-if there is a document of title and its non negotiable then title passes to buyer upon buyer’s receipt of document
Shipment contracts- passage of title
FOB place of shipment or FOB seller’s place of business then the title passes when goods delivered to the common carrier
If FOB place of destination or buyers city then title passes when seller’s tender of conforming goods at place of contract destination.
—tender is KEY- proper tender is goods arrived and they are available for buyer to pick up and buyer has been notified.
Delivery ex-ship and Deliver
Title and risk of loss do not pass until the ship arrives at port of destination and not until goods leave the ship’s tackle or otherwise properly unloaded.
Passage of LOSS
goods must be identified or risk cannot pass.
risk of loss in non delivery contracts -
if merchant risk of loss does not pass until buyer actually gets possession–think Best Buy
if non merchant then risk of loss is passed upon payment- think yard sale.
Delivery contract
-FOB shipment- passes upon deliver to common carrier
FOB destination- ROL passes at time of tender.
Nonconforming goods- seller’s breach
buyer has right to reject goods, risk of loss does not pass to buyer until defects are CURED or buyer accepts goods despite deformity..
if breach is due in fault of the buyer, risk has not passed and risk shifts immediately to buyerr
BREACH AFFECTS RISK OF LOSS BUT NOT TITLE> TITLE PASSES ACCORDING TO RULES DESPITE BREACH.
Express Warranties
affirmations of fact or promises of performance
description of goods goods under Article 2 is express warranty- contract with buyer for camel’s hair coat
Samples or models are express warraties
- can be oral or written
- can be in brochures or ads
- can be created without using -words like guaranty or warranty
- can be given by nonmerchants and merchants.
Disclaimer- impossible to disclaim written express warranties.
Implied Warranty of Title
seller has good title and its transfer is rightful
- no outstanding leins or security interests against goods hidden from the buyer
- seller is a merchant, goods should be delivered free from 3rd party infringement claims
- –disclaimer of title can be accomplished with specific language or buyer’s knowledge of title problems.
Implied warranty of merchantability
can be made by merchant ONLY.
called restaurant food warranty bc applies to food and drink
warrants goods to be fit for oridinary purpose (Packaged and labeled correctly)
to disclaim- must mention work merchantability and can be oral or in writing
Disclaimer for implied warranties of fitness for particular use
must be in writing.
sold as is, sold with all faults, as they stand
Strict tort liability
Truck manufacturer is liable to dealerships and owner of the car. (privy of contract)
Defective in design
Defective in manufacture
Defective in lack of warnings-
Negligence basis for product liability
negligent prodeuct liability has same elements for strict tort liability
includes knowledge. seller or manufacturer was aware of defect of product
distiction is knowledge of defect allows for PUNITIVE damages.
Right of assurance
party has reasonable grounds to believe other party will not perform they can demand in writing that the other party give adequate assurance of due performance. if not within 30 days, failure is repudiation of contract and anticipatory breach
Rights of parties in nonperformance– goods not delivered
anticipatory repudiation or breach in advance of contract performance date
- await performance for reasonable period OR
- treat breach as final and resort to remedies and suspend own performance without liability for breach
Buyer’s responsibilities for rejection of nonconforming goods
must be within reasonable time after tender of or delivery
not effective until known by seller
specific reasons for rejection should be given
if buyer has possession, must act as bailee
- if goods are perishable buyer must make reasonable effort to sell–reimbursed costs in caring for and selling goods plus 10% commission.
Right to cure
if the reasonable buyer would be expected to accept and the buyer doesn’t then the seller can resend conforming goods without a breach in contract.
Revocation of acceptance
buyer was given reasonable assurance seller would cure a nonconforming shipment and cure has not taken place
seller has assured buyer goods are conforming and later discovered they are not
nonconfromity was difficult to detect.
Statute of limitations on remedies
complaint must be filed within 4 years of cause of action
parties can agree to lessen period to not less than 1 year but cannot extend period
for breach of warranty, cause of action begins at time of tender of delivery and not when breach is discovered by buyer.
