UCC Art. 2 - SALES

Question 1

What has to be specified in order for a sales contract to be enforceable?

Answer 1

Quantity

Question 2

When is an offer accepted under UCC Art. 2 when a buyer makes an order?

Answer 2

When it is shipped by the seller

If ship the wrong item = acceptance and breach

Question 3

FOB Shipping vs FOB Destination and when does risk of loss pass

Answer 3

FOB Shipping - Risk of loss passes when sellers goods are received by a common carrier
FOB Destination - risk of loss passes when goods are shipped to a specific location i.e. buyer’s warehouse

Question 4

3 Types of Warranties

Answer 4

Warranty of title - seller delivers goods free from any lien the buyer did not know of

Implied warranty of fitness - seller is AWARE of the purpose of buyer’s use of goods, knows the buyer is RELYING on them

Implied warranty of merchantability - made by merchant seller - goods are fit for their normal and intended purpose i.e turkey sandwich is a turkey sandwich

Question 5

Cash on Delivery

Answer 5

Buyer cannot inspect goods BEFORE payment is made, but can and reject after the fact
If COD does not exist - buyer can inspect goods before making a payment
If receive nonconforming goods, but after inspection buyer does not reject them = acceptance

Question 6

Types of Express Warranty

Answer 6

Can be oral or written - statement of FACT

1. Sample/Models that played part in buyer’s decision
2. Descriptions of goods
3. Affirmation of fact or promise

Question 7

Remedy for Special Ordered Goods

Answer 7

Exception to the $500 rule
Halfway through production and someone rejects goods, can seek recovery for full contract amount plus incidental damages (legal fees, storage costs)

Question 8

Can a seller stop delivery for an insolvent buyer if the good are already in transit, the risk of loss has passed, they do not have document of title and refuse to pay cash.

Answer 8

The seller can stop delivery if buyer is insolvent and refuses to pay cash and they do not have document of title.

Question 9

Offer and Acceptance

Answer 9

Different under UCC for sale of goods:

• merchant’s firm offer makes it irrevocable
• offeror MUST be a merchant
• must give assurance will be open for certain time - if not specified, open for reasonable time not to exceed three months

Question 10

If no agreement is made, when does risk of loss pass?

Answer 10

• Noncarrier, nonmerchant - passes upon tender of delivery
• Merchant seller - passes when buyer takes physical possession
• Carrier, shipment - passes when goods are at carrier
• Destination - passes when goods reach the specified destination

Question 11

Sale on Approval risk

Answer 11

remains with seller until approved by buyer

Question 12

Sale or Return

Answer 12

risk on buyer until they return the goods

Question 13

Tort Liability

Answer 13

1. Negligence - plaintiff must prove duty of care; failure to use due care; damages & causation
2. Strict Liability - plaintiff proves product was defective; caused injuries; unreasonably dangerous; seller is in business of selling the product; product reached the buyer without damages. Privity and negligence is NOT required**

Question 14

Buyer/Seller Remedies

Answer 14

Anticipatory repudiation
Demand assurances
No punitive damages
Duty to mitigate damages

Question 15

Seller remedies only

Answer 15

Cancel/sue for damages;
Withhold delivery/stop goods in transit
Resell and sue
Right to full contract price (if cannot be re-sold)
Liquidated damages per UCC or if contract provides & is reasonable

Question 16

Copyright term

Answer 16

Creator’s life plus 70

Company-owned = 95 yrs from publication or 120 years from creation; whichever is earlier

Question 17

Patent term

Answer 17

20 years for most

14 for design