UCC Sales

Question 1

Under common law, a writing, in order to be legally sufficient to satisfy the Statute of Frauds, must identify

Answer 1

the parties, subject matter, the essential terms and the consideration, as well as be signed by the party to be charged

Question 2

However, under the UCC the writing only has to include the

Answer 2

quantity term and be signed by the party to be charged

Question 3

Under the theory of strict liability, the plaintiff must establish the following:

Answer 3

(1) the seller was engaged in the business of selling the product, (2) the product was defective, (3) the defect was unreasonably dangerous to the plaintiff, and (4) the defect caused injury to the plaintiff.

Question 4

under the UCC, in the case of a sale or return contract, risk of loss and title

Answer 4

pass to the buyer according to the shipping terms of the contract. Thus, generally the risk of loss and ownership will be with the buyer while the goods are in the buyer’s possession

Question 5

Voidable title

Answer 5

One who purchases in good faith from another who has voidable title takes good title

• Good faith—purchaser unaware of facts that made previous title voidable
• One may obtain voidable title by purchasing with a check that is later dishonored

Question 6

Sales Article of the UCC applies to

Answer 6

the sale of goods. Although certain provisions apply only to transactions between merchants, the general scope of the Article extends to sales between nonmerchants as well

Question 7

In general, the UCC Sales Article applies to the sale of

Answer 7

Consumer goods by a nonmerchant

Question 8

In deciding a controversy involving the question of who has the risk of loss, the court will look primarily to

Answer 8

The intent of the parties manifested in the contract.

Question 9

When the agreed manner of delivery of goods becomes commercially impracticable through no fault of either party,

Answer 9

a commercially reasonable substituted performance by the seller must be accepted by the buyer.

Question 10

Warranty of fitness for a particular purpose

Answer 10

reated when the seller knows of the particular use for which the goods are required and further knows that the buyer is relying on skill and judgment of seller to select and furnish suitable goods for this particular use

• Buyer must actually rely on seller’s skill and judgment
• Product is then warranted for the particular expressed purpose and seller may be liable if the product fails to so perform

Question 11

any seller, not only a merchant seller, may create an express warranty by making any affirmation of fact or promise which forms part of the basis of the bargain

Answer 11

Such a warranty may be made either orally or in writing and will exist regardless of the seller’s intent

Question 12

in order for a firm offer to be effective

Answer 12

it must be contained in writing signed by a merchant offeror.

Question 13

An oral agreement concerning the sale of goods entered without consideration is binding if the agreement

Answer 13

Modifies the price in an existing, enforceable contract from $525 to $475.

Question 14

Provided there is no agreement to the contrary and neither party is in breach, the shipping terms

Answer 14

will determine which party bears the risk of loss in this situation. Since the shipping terms were FOB Wizard Suppliers (shipping point), the risk of loss passed to Lazur once the goods were delivered to the carrier.

Question 15

Examples in which there is voidable title

Answer 15

(1) Goods paid for with a check subsequently dishonored
(2) Goods obtained by fraud, mistake, duress, or undue influence
(3) Goods obtained from minor
(4) Thief does not have voidable title but void title

Question 16

A seller who discovers that an insolvent buyer has received goods on credit may

Answer 16

reclaim the goods by making a demand for their return within 10 days after receipt of the goods by the buyer

Question 17

This 10-day limitation, however, does not apply if

Answer 17

he buyer made a written misrepresentation of its solvency within 3 months prior to its receipt of the goods.

Question 18

When a buyer breaches the contract as it becomes due, the seller may recover

Answer 18

the full purchase price of the goods identified to the contract plus incidental damages if the seller is unable to resell the goods at a reasonable price after making a reasonable effort

Question 19

Anticipatory breach (anticipatory repudiation)

Answer 19

takes place when party indicates that s/he will not be performing contract and performance is not yet due

Question 20

Seller has right to cure nonconformity (i.e., tender conforming goods)

Answer 20

(1) Within original time of contract, or
(2) Within reasonable time if seller thought nonconforming tender would be acceptable
(3) Seller must notify buyer of his intention to cure

Question 21

If goods are held in warehouse and seller has no right to move them, risk of loss passes to buyer

Answer 21

(1) Upon proper negotiation of a negotiable document of title
(2) Within a reasonable time after delivery of a nonnegotiable document of title
(3) Once warehouseman acknowledges buyer’s right to goods if no document of title

Question 22

If seller learns that buyer is insolvent and buyer does not have the document of title

Answer 22

seller may stop delivery of goods in carrier’s possession unless buyer pays cash

Question 23

If a contract for the sale of goods includes a C&F shipping term and the seller has fulfilled all of its obligations, the

Answer 23

Risk of loss will pass to the buyer upon delivery of the goods to the carrier