UCC Flashcards
What are goods as defined in article 2 of the UCC?
Moveable, tangible things
What is a merchant?
Someone who regularly deals in goods
Does the UCC Sales code apply to merchants or non-merchants?
Both
Although merchants are held to a higher standard
Offer and Acceptance under the UCC is different than under common contract law. T or F?
True
What is a merchant’s firm offer?
If the seller is a merchant who in signed writing promises to keep an offer open, this is a firm offer.
Article 2 UCC, in sale of goods
If no time is stated, how long is a firm offer open?
A maximum of 3 months
For a contract for a sale of goods involves a non-merchant, what kind of law applies?
Common law not UCC.
Offer must match acceptance
If there’s a sale between 2 merchants, can the contract terms change after the sale takes place?
Yes
For UCC sales purposes, what must be stated in the contract?
Consideration
Although there are exceptions
What are the exceptions to the rule that a UCC sales contract must state consideration?
Output contract - buyer agrees to buy the sellers entire output of goods for a stated period of time.
Requirement contract - seller of goods agrees to sell a specific required output for a stated period.
(Ex. 15000 yards of denim for 3 months)
What is the passage of title?
When a party (buyer or seller) assumes the rights and responsibilities for the goods identified in the contract.
What piece(s) of information should be included in the contract regarding passage of title?
Time
Place
When goods pass to buyer
What is risk of loss?
Risk of loss dictates which parties bear the risk of goods being damaged or destroyed.
Generally, what determines who bears the risk of loss?
The party who currently holds the title to the goods bears the risk of loss.
What is a transfer of title?
When the ownership of goods has been transferred from seller to buyer through a sale.
When does the Seller bear the Risk of Loss
- When holding goods for the buyer
- “Sale on Approval” transactions
- When goods are held by a 3rd party
If a seller isn’t a merchant, and uses Fedx to deliver the goods, when does the risk of loss transfer to the buyer?
When the seller completes the tender of delivery.
When the seller is a merchant, Who doesn’t use a carrier like FedX, when does the risk of loss transfer to the buyer?
When the buyer takes possession of the goods.
When “shipping point contract” or “free on board” are used, when is risk of loss transferred to the buyer?
When the carrier picks up the goods from the seller.
What is destination point contract? Or FOB destination?
When the risk of loss transfers to the buyer when the buyer receives the goods.
Under the UCC, are all sales final?
Yes
Unless it’s a sale on approval or a contingency sale.
What’s a sale on return?
Same as a contingency sale.
Whereby some kind of event needs to be resolved in order for a sale to occur.
In a consignment store, are consignment items considered to be part of the store’s inventory?
No
What is an express warranty?
A promise or guarantee that a buyer relies on when they purchase an item. Such promises form the basis of the bargain.
