question

Significance of UCC

answer

clarifies sales law and makes this area of law more predictable to businesses that engage in transactions in more than one state

question

Article 2

answer

focuses on contracts for the sale of goods

question

Article 2(A)

answer

focuses on contracts for the lease of goods

question

3 categories that can be bought and sold according to the UCC

answer

1.) goods (tangible) 2.) realty 3.) services (intangible)

question

Sale (UCC Article 2)

answer

consists of the passing of title from the seller to the buyer for a price

question

Goods (UCC Article 2)

answer

all tangible things which are moveable at the time of identification to the contract for sale

question

Trade Fixture

answer

items attached to real estate that are used for business activities

question

Mixed Sale

answer

contract that combines a good with a service

question

Merchants (UCC)

answer

- person who regularly sells goods as his or her business or trade or employs people to sell those goods - anyone who works for a person selling those goods - anyone who holds himself or herself out as a merchant or dealer

question

Lease (UCC Article 2(A))

answer

transfer of the right to possession and use of goods for a term in return for consideration

question

Lessor (UCC Article 2(A))

answer

person who transfers the right to possession and use of goods under a lease

question

Lessee (UCC Article 2(A))

answer

person who acquires the right to possession and use of goods under a lease

question

United Nations Convention on Contracts for the International Sale of Goods (CISG)

answer

offered as a treaty that countries could sign, indicating their willingness to allow this treaty to govern international business-to-business sales contracts

question

(Interpretation Under UCC) Price

answer

"reasonable price" supplied at time of delivery

question

(Interpretation Under UCC) Payment

answer

due at time and place at which the buyer is to receive the goods

question

(Interpretation Under UCC) Delivery

answer

place for delivery is seller's place of business

question

(Interpretation Under UCC) Time

answer

contract must be performed in reasonable time

question

(Interpretation Under UCC) Duration

answer

party that wants to terminate an ongoing contract must use good faith and give reasonable notification

question

(Interpretation Under UCC) Quantity

answer

courts generally have no basis for determining remedy

question

How are contracts formed under the UCC compared to common law?

answer

- Formation in general: UCC more lenient than common law regarding contract formation; courts evaluate intent of parties to sales or lease contract - Offer and Acceptance ○ Offers valid even if terms left open ○ "mirror-image" rule does not apply ○ Courts evaluate each case individually to determine whether additional terms allowed - Consideration: mutual consideration required upon forming agreement. When sales/lease contracts modified, modifications need not be supported by additional consideration

question

Firm Offer

answer

1.) offer made in writing 2.) gives assurances that it will be irrevocable for no longer than three months despite a lack of consideration for the irrevocability

question

Mirror-Image Rule (UCC)

answer

UCC- additional terms do not negate acceptance unless acceptance is made expressly conditional on assent to the additional terms Common Law - additional terms = counteroffer

question

Consideration (UCC)

answer

eliminates requirement of consideration for the modification of sales and lease contracts

question

Battle of Forms

answer

if last set of negotiations are NOT SPECIFICALLY rejected, then last terms standing are the ones applicable to the final transaction

question

Statute of Frauds Requirements (UCC and Common Law) Exception?

answer

UCC - contracts for the sale of goods must be in writing if the goods are $500 or more, leases must be for payments of $1,000 or more Common Law - all material terms to a contract to be in writing Exception - if parties are merchants

question

Writing

answer

type of documentation that shows contractual intent and satisfies the statute of frauds requirement

question

3 Kinds of Title

answer

1.) Good 2.) Void 3.) Voidable

question

Good Title

answer

acquired from someone who already owns the goods free and clear

question

Void Title

answer

not true title

question

Voidable Title

answer

contract between original parties would be void, but the goods have already been sold to a third party

question

Aspects for Buyer to get Voidable Title

answer

1.) buyer deceived the seller regarding his or her true identity 2.) buyer wrote bad check for the goods 3.) buyer committed criminal fraud in securing goods 4.) buyer and seller agreed that title would not pass until some later time 5.) buyer is a minor

question

Entrustment

answer

someone entrusts the possession of a good to a merchant and asks him to repair that good

question

Issues with Concept of Title

answer

- Ownership - Encumbrance - Loss - Insurable interest

question

Issue of Ownership

answer

when does title actually transfer from seller to buyer?

question

Issue of Encumbrance

answer

right to encumber goods as collateral for a debt depends on who is holding title

question

Issue of Loss

answer

when does the risk of loss become attached?

question

Issue of Insurable Interest

answer

- it is the right to insure the goods against any risk exposure such as damage or destruction - when is this insurable interest created?

question

4 Types of Sales Contracts*

answer

1.) Simple delivery 2.) Common-carrier delivery 3.) Goods-in-bailment 4.) Conditional sales

question

Simple Delivery Contract

answer

purchased goods are transferred to buyer from seller at either time of the sale or some time later by the seller's delivery

question

Tender of Delivery

answer

moment the goods were available for the buyer to take

question

Common-Carrier Contract

answer

occurs when goods are delivered to the buyer by a common carrier, such as a trucking line seller-->common carrier-->buyer

question

Shipment contract

answer

title passes when goods are turned over to common carrier by the seller

question

Destination contract

answer

title passes when common carrier delivers the goods to the buyer

question

Risk of Loss

answer

transfers from seller to buyer simultaneously with title

question

Insurable Interest

answer

created when the buyer and/or seller holds title or retains a risk of loss

question

Goods-in-Bailment Contract

answer

occurs when purchased goods are in some kind of storage under control of third party, such as a warehouseman

question

Conditional Sales Contract

answer

sale itself is contingent on approval

question

Sale-on-approval contract

answer

seller allows the buyer to take possession of the goods before deciding whether to complete the contract by making the purchase

question

Sale-or-return contract

answer

seller and buyer agree that buyer may return the goods at a later time

question

Seller in breach

answer

Buyer may accept nonconforming goods "as is" or reject goods (subject to seller's right to "cure") Risk of loss remains with seller until buyer accepts goods, or deficiencies corrected

question

Buyer in breach

answer

(buyer refuses to accept conforming goods, goods later lost or damaged): Risk of loss depends on type of contract between buyer and seller

Business Law Chapter 15: Formation and Performance of Sales and Lease Contracts – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards