Chapter 16 Sales of Personal Property Ashcroft Law for Business Flashcard

Goods
Movable personal property.
Movable Personal Property
All physical items except real estate.
Property Subject to Sale
A sales contract that does not meet the requirements of the UCC is unenforceable, if both parties-the buyer and the seller-choose to abide by its terms even if they are not legally bound, neither one can later avoid the contract. Sale applies only to the sale of movable personal property. It does not apply to real property or intangible personal property. Sales contracts must have all the essentials of any other contracts, but have additional features.
Real Property
Land and things permanently attached to land.
Intangible Personal Property
Evidences of ownership of personal property. Ex: contracts, copyrights, stock certificates.
Sales and Contracts to Sell
A sale differs from a contract to sell. A sale of goods involves the transfer of title, or ownership, to identified goods from the seller to the buyer for consideration or price. Ownership changes from the seller to the buyer the moment the bargain is made, regardless of who has possession of the goods. A contract to sell goods is a contract where the seller agrees to transfer ownership of goods to the buyer in the future for consideration or price. Individuals promise to buy and to sell in the future. the party seeking to purchase the goods does not have the right to possess them unless the contract specifically so provides.
Sales of Goods and Contracts for Service
An agreement to perform some type of service must be distinguished from a sale of goods because Article 2 of the UCC governs the sales of goods but not agreements to perform services. When a contract includes supplying of both services and goods, the contract is not necessarily considered a contract for the sale of goods. Sale or service is determined by which factor is predominant.
Price
Consideration in a sales contract is generally expressed in terms of money or money’s worth known as price. It may be payable in money, goods or services. A sales contract is ordinarily an express contract, but some of its terms may be implied. If the sales contract does not state the price, it will be held to the reasonable price for the same goods on the market. For goods sold on a regulated market, the price on that market will be the reasonable price. If the parties indicate the price must be fixed by them or by a third person at a later date, no binding contract arises if the price is not thus fixed. If the price can be computed from the terms of the contract, the contract is valid.
Existing Goods
To be the subject of sale the goods must be existing. They are those both in existence and then owned by the seller. If these conditions are not met, and only a transaction can be made between the seller and buyer it will be a contract to sell goods. Identified goods are goods that the seller and buyer have agreed are to be received by the buyer or have been picked out by the seller. When the seller specially manufactures the goods to the buyer’s order, identification occurs at the time when manufacture begins.
Future Goods
Goods that are not existing. The seller expects to acquire the goods in the future either by purchase or manufacture. Any contract purporting to sell future goods is a contract to sell and not sale, seller does not have title to the goods. Title to future goods does not pass immediately to the buyer when the goods come into existence. The seller must take some further action, such as shipment or delivery.
Bill of Sale
Provides written evidence of one’s title to tangible personal property. No particular form is required for a bill of sale. The bill of sale serves two purposes:
1. If the buyer wishes to resell the goods, and the prospective buyer demands proof of ownership.
2. If any question arises as to whether the buyer came into possession of the goods legally.
Illegal Sales
If the sale is fully executed, the court will not normally intervene to aid either party, if one party is completely innocent and enters into an illegal sale, the court will compel a restoration of any goods or money the innocent party has transferred. If it is wholly executory, has not been completed, the transaction is a contract to sell and will not be enforced. If it is partially executory, the court will leave the parties where it finds them, unless the one who has fulfilled their part is a victim of fraud. If it is divisible, with a legal part and an illegal part. the court will enforce the legal part. If the individual goods are separately priced, the sale is divisible. If the sale involves several seperate and independent items as a lump-sum sale it is indivisible. An indivisible sale with an illegal part makes the entire sale illegal.
International Sale Contracts
Parties may specify in the contract what law governs. The U.S. has ratified the United Nations Convention on Contracts for the International Sale of Goods (CISG). This convention or agreement, applies to contracts for the sale of goods if the buyer and seller have places of business in different countries that agree to the convention. Business may indicate in their international contracts that they will not be governed by the convention. Unless so stated in the contract that they are not governed by the convention they are. The convention does not cover contracts between two parties unless their places of business are in countries that have adopted this convention. This does not apply to personal transactions, just business to business situations.

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