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Sales
Sales
54
Law
Professional
07/07/2009

Additional Law Flashcards

 


 

Cards

Term
What is the other term required for a sale of goods contract?
Definition
quantity
Term
Does the UCC only apply to merchants?
Definition
No- all sales of goods
Term
How can a party accept a unilateral contract under the UCC?
Definition

promise to ship the goods

 

or

 

ship the goods

 

if they are non-conforming: acceptance and breach

 

UNLESS

 

accommodation- then counteroffer (so no K formed)

 

Term
What is required for a merchant firm offer?
Definition

Merchant- person making the offer

 

writing

 

signed by the merchant

 

words of firmness

 

 

Term
How long is a firm offer irrevocable?
Definition

-for the time stated or a reasonable time (if not stated)

 

maximum of three months (this is the maximum that it is irrevocable, so if the merchant said the offer was open for longer than three months and they don't revoke it between the three month and the time stated, you can still accept during that time)

Term
Under the UCC, if a party adds a term to their acceptance, is a contract formed?
Definition
Yes, if the parties so intend
Term
When is a new term added to an acceptance become part of the K?
Definition

when one party is a non-merchant: the term is just a proposal

 

when both parties are merchants: part of the K unless: objection, offer states no new terms, materially alteration

Term
Statute of frauds, what is in it?
Definition

MY LEGS

 

- contracts made in consideration of marriage

 

- K not capable of being performed in a year

 

-Land, over one year

 

-executor promises to pay estate debt

 

-goods $500 and over

 

-suretyship (guarantee)

Exception: main purpose

Term
Exceptions to Statute of Frauds?
Definition

SWAP

 

-specially manufactured goods

 

-written merchants confirmation w/o response in 10 days (both have to be merchants; quantity term must be included, signed by person asserting the defense (P))

 

-admission

 

-payment/performance

Term
Parol evidence rule
Definition

exclusionary effect of written contract on earlier or contemporaneous agreements as a possible source of terms of the contract

 

aka

 

extrinsic evidence is inadmissible

Term
What can be used to explain a sale of goods contract (exceptions to parol evidence rule)?
Definition

usage of trade

 

course of dealings

 

course of performance

 

NOTE: if clear manifestation in the K, then these cannot be brought in either

Term
Three examples of when a K will be unconscionable?
Definition

inconspicious risk shifter

 

K of adhesion (unequal bargaining power)

 

unreasonable covenant not to compete

Term
What does FOB mean?
Definition
Free on board
Term
What does FAS mean?
Definition
free along side
Term
When does a seller complete it's obligation under a shipment contract?
Definition

gets the goods to a common carrier

 

makes reasonable arrangements for delivery and

 

notifies the buyer

Term
What does C & F mean and CIF?
Definition

C&F means cost and freight

 

CIF means cost, insurance and freight

 

ex: C&F $500

Term
Can a seller demand cash?
Definition
Yes, but must give reasonable time to get it.  The price of the goods will be the price at the time the buyer had the check ready. 
Term

Risk of loss, absent breach by seller, non-carrier

 

seller-merchant?

Definition
seller has risk of loss until buyer is in physical possession
Term

Risk of loss, absent breach by seller, non-carrier

 

seller-nonmerchant?

Definition
seller has risk of loss until he tenders (makes available to buyer)
Term
risk of loss, absent breach of seller, carrier
Definition

depends on whether a destination or shipment K

 

if destination, seller has risk of loss until goods get to sellers place of business or residence

 

if shipment, sellers risk of loss ends when (1) gets goods to carrier (2) reasonable arrangments (3) notified buyer

Term
Risk of loss, seller breaches
Definition

risk remains on the seller unless:

 

acceptance (despite breach)

 

cured (w/in proper time or reasonable time if reason to beleive buyer would accept)

Term
who has the risk of loss under "sale or return"?
Definition
buyer
Term
who has the risk of loss under "sale on approval"?
Definition
seller
Term
what are the constructive warranties?
Definition

warranty of title

 

and

 

warranty against infringement (merchants only)

Term
What are the implied warranties?
Definition

merchantability

 

fitness for particular purpose

Term
what is the warranty of merchantability and who does it apply to
Definition

merchants only

 

it is the fitness for ordinary purpose

Term
what is the fitness for particular purpose?
Definition

1. buyer has particular purpose

 

2. seller has reason to know of the p/p

 

3. buyer relies on seller to get adequate goods for the p/p

Term
which warranties apply only to merchants?
Definition
infringement and merchantability
Term
what type of goods does the merchantability warranty warrant for?
Definition
basically anything sold by a merchant, including food and drinks and the containers they come in
Term
What is an express warranty?
Definition

the seller just has to say something like it's a fact

 

seller doesn't have to be committing fraud, they can innocently made an express warranty that turns out to be false

 

not the same as "puffing"

 

sample or model ("i'll sell you one like this"- express warranty)

Term
Under the old rule, which warranties can be disclaimed?
Definition

all warranties could be disclaimed

 

if expressly disclaiming merchantability, had to use the word merchantability

 

you can impliedly disclaim the implied warranties by selling something "as is"  (merchantability and fitness for particular purpose)

Term
who do warranties extend to?
Definition
family, household, guests in home
Term
federal consumer product warranties of law 1975
Definition

-no disclaimer or implied warranties

 

-lemon problem- resolved in favor of consumer

 

-No ty-ins: only permitted if no cost for parts and labor

Term
What are compensatory damages?
Definition

foreseeable, regular damages

 

Term
what are nominal damages?
Definition

no actual loss to P ($1)

 

Term
are liquidated damages okay?
Definition

yes as long as:

 

1) at the time of K, the amt of possible damages from any later breach of contract is difficult to determine, and

 

2) at time of K, the K provision is a reasonable forecast of possible damages

 

NOTE: you either have valid liquidated damages clause or invalid penalty clause (don't mix these)

Term
punitive damages?
Definition
these are to punish the D and there are NO punitive damages in private contract law
Term
what are the buyer's remedies if the seller is in default and has send no goods to buyer
Definition

cover

(difference between the price to cover and K price)

 

K damages

(difference between fair market value and K price)

 

specific performance

(only if money damages are inadequate)

 

Term
what are the buyer's remedies if the seller sent non-conforming goods?
Definition

REJECT:

 

single deliver:

unless curable w/in time period or reasonable time if seller believed buyer would accept

 

installment:

only allowed to reject if show substantial impairment to value of installment or the whole thing

 

ACCEPT:

 

knowingly:

difference between the goods as they are and the goods as they should have been

 

non-knowingly-revoke acceptance:

standard: substantial impairment

following the revocation, buyer can:

cover, get K damages or specific performance

Term
what are the seller's remedies if the buyer is insolvent?
Definition

this is not necessarily a breach, but seller can:

 

not deliver the goods

 

can stop the goods in transit

 

or

 

reclaim the goods w/in 10 days of delivery (buyer still has to have them though and if use this then this is only remedy)

 

Term
what are the sellers remedies if the buyer wrongly rejects the goods 
Definition

sell to another

(difference between K price and resale price)

 

contract damages

(difference between the fair market value and the contract price

 

NO specific performance

 

lost profits only IF volume seller

 

 

Term
remedies available to buyer and seller?
Definition

right to demand assurances

 

anticipatory repudiation

 

incidential damages

 

consequential damages

 

mitigation

Term
right to demand assurances
Definition

requires a writing (to get assurances)

 

if no response w/in 30 days it becomes an anticipatory repudiation

Term
anticipatory repudiation
Definition

unequivocal

 

executory promises on both sides

Term
what can the party do if the other anticipatorily repudiates?
Definition

can sue now

 

can sue when performance is due

 

can rescind the K

Term
who can get incidental damages?
Definition
innocent buyer or seller
Term
who can get consequential damages?
Definition
innocent buyer, but not sellers
Term
which party has a duty to mitigate?
Definition
the non-breaching party- either buyer or seller
Term
in which ways may a buyer achieve better rights than their seller?
Definition

ACHIEVE

 

Accession- add value to property

 

Cash

 

Holder in Due Course

 

Intermingling

 

Entrustment

 

Voidable title

 

Estoppel

Term
elements for entrustment
Definition

Owner entrusts goods with

 

Merchant, who sells to

 

buyer in ordinary course

 

*must be the owner, not a bailee, but can be the owners agent

 

*must be a merchant, not a casual seller

 

* buyer must be in ordinary court, not a creditor

 

*buyer will get title- harsh facts make no difference

Term
what is voidable title?
Definition

intentional sale b/c of fraud

 

ex: seller sells to buyer because buyer said he was Brad Pitt.  If that person sells to a BFP then BFP has title and seller is out of luck

Term
estoppel
Definition

legal bar to claiming title

 

allows you to act to your detriment- you are estopped from getting it back (buyer gets title)

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