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Contracts > UCC Sales of goods > Flashcards

UCC Sales of goods Flashcards

1
Q

UCC Sales of goods - COD -Gral

A
  • Gral Rule: Collect on delivery (COD) - payment due at time/place of delivery
  • Delivery in single tender
  • Potentially enforceable contract w/open price (to be defined by court (reasonable market price) or by parties
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2
Q

UCC Sales of goods - COD - Place of Delivery (transfer of title)

A

Seller’s place of business

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3
Q

UCC Sales of goods - COD - Shipping Costs

A

As defined by contract, if not interpretation by CPU

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4
Q

UCC Sales of goods - FOB -Gral

A
  • “Free on board”

- Gral rule: seller pays to place good in carrier and loading into the vessel

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5
Q

UCC Sales of goods - FOB - Place of Delivery (transfer of title)

A

1) FOB Place of destination: when removed from transport at for destination
2) FOB Place of shipment: at seller’s shipping dock

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6
Q

UCC Sales of goods - FOB - Shipping Costs and Risks

A

1) FOB Place of destination: Seller pays for freight charges and assumes risk until tender at destination
2) FOB Place of shipment: Buyer pays for freight charges and assumes risk after loading

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7
Q

UCC Sales of goods - FAS -Gral

A
  • aka “Free along side”

- Seller duty to bring along side lifting tackle reach

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8
Q

UCC Sales of goods - FAS - Place of Delivery (transfer of title)

A

By delivering to reach of lifting tackle and tender receipt for goods

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9
Q

UCC Sales of goods - FAS - Shipping Costs and Risks

A

Buyer pays for loading and freight charges and assumes risk

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10
Q

UCC Sales of goods - CIF -Gral

A
  • aka “cost, insurance, price”

- Buyer pays for “lump sum” to include price, insurance and freight

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11
Q

UCC Sales of goods - CIF - Place of Delivery (transfer of title)

A

Delivery to carrier and the forward docs of title to buyer who pay on the tender of those docs

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12
Q

UCC Sales of goods - CIF - Shipping Costs and Risks

A
  • Seller’s risk until delivery to carrier

- Buyer pays lump sum and assumes risks after delivery

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13
Q

UCC Sales of goods - DES - Gral

A
  • aka “delivered ex-ship”
  • Seller delivers at port of destination
  • Seller risk until unloading
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14
Q

Gral Rule for Risks and Title

A

1) Existing parties’ agreement control (has to ID goods)

2) No agreement apply default CL/UCC

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15
Q

Gral Rule for Risks and Title - CL

A

Risks transferred with title of property

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16
Q

Gral Rule for Risks and Title UCC

A

Risks transferred with delivery of goods to buyer or carrier OR on with buyer’s reception w/o rejection

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17
Q

Risk and Title - Rule for contract breach

A

Breaching party retains risk until insurance coverage applies

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18
Q

Risk and Title - Rule for non conforming delivery

A
  • If buyer rejects: Risk and title remains on the seller until remedy
  • If buyer already accepted and the rejects: only risk goes back to seller and not title
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19
Q

Tender of delivery - gral

A
  • When seller makes goods available and notifies buyer.

- Buyer can accept and or reject

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20
Q

Tender of delivery - Rule on risk when rejected goods

A

When buyer rejects goods tendered and they are destroyed while on seller’s premises

  • If seller is non-merchant: risk is on buyer upon tender
  • If seller is merchant: risk is on buyer only upon actual receipt
21
Q

Tender of delivery - Rule for “destination” contract

A
  • Obligation to deliver on specific port of destination

- Risk transfer with tender at destination

22
Q

Tender of delivery - Rule for “shipment” contract

A
  • Obligation to deliver w/out specific port of destination

- Risk transfer with delivery to carrier and notification to buyer

23
Q

Tender of delivery - Documents of title FX

A

Use to deliver tender by seller - they constitute ownership of goods

  • Buyer pays when docs received and goods in possession of warehouse or bailee
  • Risk transferred at time of buyer accepts transfer of doc
24
Q

Tender of delivery - Power to Transfer

A

Buyer get rights of transferor

  • never from stolen goods
  • Voidable titles can be transferred if BFP
25
Q

Conditional Sales - Sale or Return and Sale on Approval

A
  • Type of contract that allows buyer to return conforming goods to seller, when:
    a) Sale or return: when buyer as retailer not able to re-sale - risk/cost on the retailer until return (with receipt) - retailer’s creditor can levy goods before whole seller is paid
    b) Sale on Approval: sale for buyer’s use - risk is on the seller and not levy is possible by buyer’s creditors until buyer formally approves them or doesn’t reject them within certain time
26
Q

Consignment - XXXX???????? [Re-Check]

A
  • As sale of goods owned by other people
  • As conditional “sale or return” - where retailer never has title over goods
  • Consignor looses right is goods as collateral for security interest or if sign on retailer’s premises are subject to consignor Interests [RE-Check]
27
Q

Letter of Credit (LOC)

A
  • UCC art 5
  • Can be required by seller from buyer
  • Paid upon presentation at bank when conditions are met (i.e. buyer accepts goods post inspection)
28
Q

Insurable Interest - Gral

A

Buyer can assert insured interest even before receiving title and/or risk - goods they dont control yet
- seller’s insurable interest remains as long as he stil has title/security interest in goods or even in proceed from collateral

29
Q

Insurable Interest - Specific application (3)

A

1) Existing goods: interest arises when contract is entered
2) Future goods: interest arises when goods are shipped/marked/separated/otherwise ID as related to buyer OR if manufactured to the point where distinguishable from the rest of the inventory
3) Crops and animals: crops to be harvested or animal to be born within 1 year

30
Q

Liability of UCC Goods seller - Gral

A

In gral: any buyer has 3 actions for personal injury and property dx against seller: SL, N, Warranties
- UCC: Buyer with actions vs seller based on warranty theories

31
Q

Liability of UCC Goods seller - Types of Warranties

A

1) Express

2) Implied: a) merchantability, b) fitness for particular purpose, c) warranty of title and against infringement

32
Q

UCC Seller Warranties - Express

A
  • Include all affirmation and promises as part of bargain in which buyer reasonably relied
  • Above puffery, opinion, sales talk
33
Q

UCC Seller Warranties - Implied - gral

A
  • Writing not required
  • created by UCC as “no fault”/absolute liability from seller - even without awareness of defect or careless act
  • In practice they are replacement of N and SL actions under CL
34
Q

UCC Seller Warranties - Implied - Merchantability

A
  • Goods pass w/out objection in the trade, of at least fair average quality and fit for ordinary purposes (merchantable + of commercial acceptable quality)
  • EXCLUSION: goods inspected by buyer before contracts for defects easily detectable AND for livestock being free from disease
35
Q

UCC Seller Warranties - Implied - Fitness for Particular Purpose

A

Buyer relies on seller information to obtain item for particular use

  • Seller has to be aware of reliance
  • Applicable to both merchant and non merchant sellers
36
Q

UCC Seller Warranties - Implied - Warranty of title and against infringement - GUT

A

Seller guarantees that goods are/have:
- Good title
- Free from undisclosed SI/liens/encumbrances
- Seller has transfer rights
+
- No trademark/copyright infringement for merchant seller

37
Q

UCC Seller Warranties - Implied - Warranty of title and against infringement - GUT - EXCEPTION

A

Custom ordered goods

38
Q

UCC Seller Warranties - Limitations on warranty liability (as contract provision) (2)

A

1) No illegal/against public policy (ambiguous terms will be construed against seller)
2) Dollar limit, repair, return, refund or replace OK as remedies for breach UNLESS they are “fair” by failing contract purpose and/or deprive buyer from value of the bargain.

39
Q

UCC Seller Warranties - Exclusions and disclaimers of liability - Gral

A
  • Allowed but with limitations.

- 2 Step analysis: 1) Contract language meet 5 C’s and 2) UCC test for implied warranties

40
Q

UCC Seller Warranties - Exclusions and disclaimers of liability - 2 step analysis

A

1) Contract language meet 5 C’s (clear, conspicuous, conscionable, consistent, consumer purchaser reqs)
2) UCC test for exclusion of implied warranties by use of certain language

41
Q

UCC Seller Warranties - Exclusions and disclaimers of liability - 1st Step - 5 C’s reqs for contract language

A

1) Clear: understood by reasonable buyer
2) Conspicuous: obviously presented/displayed to be noticed by reasonable buyer
3) Conscionable: bargained for and not unexpected
4) Consistent: with previously made express/implied warranties
5) Consumer purchasers require the warranty to clearly describe its scope and qualities not guaranteed

42
Q

UCC Seller Warranties - Exclusions and disclaimers of liability - 1st Step - 5 C’s - CONSCIONABLE

A
  • Bargained for and not unexpected
  • Higher degree of scrutiny on adhesion contracts
  • Court can limit application (divisible) or void entire contract
  • For consumer goods, exclusion of personal injury dx are deemed unconscionable “per se”. Burden shifts to seller to prove they are not UNLESS betwn merchants in arms length transactions
43
Q

UCC Seller Warranties - Exclusions and disclaimers of liability - 2nd Step - UCC Implied Warranties - Merchantability

A
  • No requirement for writing, but if os is deemed conspicuous
  • Allowed language: sale “as is”, “with all faults”, “non merchantable”
44
Q

UCC Seller Warranties - Exclusions and disclaimers of liability - 2nd Step - UCC Implied Warranties - Fitness for particular purpose

A
  • Must be written and needs to be conspicuous
45
Q

UCC Seller Warranties - Exclusions and disclaimers of liability - 2nd Step - UCC Implied Warranties - Title and Against Infringement

A
  • Very hard to exclude

- Requires specific detailed language / gral disclaimer not enough

46
Q

UCC Seller Liability - Privity

A
  • UCC extends horizontal privity to family/household members/guest and vertical privity (as liability) against anyone in chain of sales
  • Reasons: “zone of danger” - as reasonable expectation that consumer goods will affect people other than buyer
  • OJO cant be excluded as warranty from contract
47
Q

UCC Seller Liability - Magnusson Act Effects

A
  • Duty for seller to provide detailed info on specific warranties made for consumer goods sold in interstate commerce
  • Possible “full warranties” and “repair/replace provisions”
  • FTC enforces warranties and possible civil action if over 100 claimants
48
Q

UCC Seller Liability - Magnusson Act Effects - Special Warranties (2)

A

1) “Full warranty”: no possible limitation to merchantability, actionable even w/out privity
2) “Repair or replace” provision to limit warranty limitations - when product cannot be repaired after repeated attempts, buyer is entitled to replacement or refund

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