Chapter 6 Section 2: Sales

Question 1

Define goods

Answer 1

Moveable personal property

Question 2

Define merchant

Answer 2

Dealer in the goods of the kind sold

Question 3

What obligation is imposed on everyone?

What additional one is imposed on merchants?

Answer 3

Good faith

Reasonable standards of fair dealing

Question 4

What makes a merchant’s firm offer?

What is special about it?

Answer 4

Seller is a merchant
Offer is in writing and signed by the merchant
Offer gives assurance it will be kept open for some time - not longer than three months

It is irrevocable

Question 5

Is there a mirror image rule under UCC?

Answer 5

No

Question 6

What are auctions with reserve?

Without?

Answer 6

With reserve means they don’t have to sell it if they don’t want to
Without means it’s getting sold for sure.

Question 7

MYLEGS refers to goods over $500. What are the exceptions?

SWAT

Answer 7

Specially manufactured goods
Written confirmation without objection in 10 days
Admitted in court
Performed

Question 8

Is failure of agreed-upon method of transportation a valid defense?

Answer 8

No

Question 9

What conditions must be satisfied for risk of loss to pass?

Answer 9

Goods must be identified (marked or segregated)
Parties agree
Depends on shipping agreement

Question 10

What if there is no specific delivery agreement?

Answer 10

It depends on if it’s noncarrier or carrier.

Question 11

What if it’s noncarrier?

Answer 11

If it’s a merchant, risk passes on delivery

If a nonmerchant, risk passes on tender of delivery

Question 12

What if it’s carrier?

Answer 12

If it’s a shipment contract, it passes on delivery to carrier
If it’s a destination contract, it passes on delivery to destination

Question 13

Are FAS and CIF shipment of destination?

What do they stand for?

Answer 13

Shipment

Free Along Side and Cost, Insurance, and Freight

Question 14

If the seller sells nonconforming goods, who carries risk of loss?

Answer 14

The seller.

Question 15

What are the two types of nonfinal sales?

Who carries of of loss?

Answer 15

Sale on approval - risk on seller until approval

Sale or Return - risk on buyer until returned

Question 16

Who bears the risk of loss for goods on consignment?

Answer 16

Buyer

Question 17

Is risk of loss determined by title?

Answer 17

No

Question 18

Define perfect tender

Answer 18

Goods and delivery must conform exactly to the contract without any defects

Question 19

What are express warranties?

Can they be disclaimed?

Answer 19

They are oral or written, saying the goods will conform to the statement of fact, to the description, or to the sample or model.
They are hard to disclaim because they are express.

Question 20

What is implied warranty of title?

Can it be disclaimed?

Answer 20

It is implied in every sales contract, saying that the seller has good title and the right to transfer the title.
It can be disclaimed specifically or by circumstance.

Question 21

What is implied warranty of merchantability?

Can it be disclaimed?

Answer 21

It is implied in every sale by a merchant, and it says the goods are fit for ordinary purposes.
It can be disclaimed in general terms

Question 22

What is implied warranty of fitness for particular purpose?

Answer 22

It is implied in every sale where you rely upon the seller to select the goods for you
It can be disclaimed in general terms

Question 23

Is warranty protection limited by privity?

Answer 23

No

Question 24

What are the two torts we’re concerned with?

Answer 24

Fraud and negligence

Question 25

Are torts limited by privity?

Answer 25

No

Question 26

What needs to be proven for negligence?

Answer 26

Seller owed a duty of care
Seller breached the duty by failing to use due care
Damages
Causation

Question 27

What is strict products liability?

Answer 27

It’s for those injured by goods. They focus on the goods, and not on the seller’s conduct. Negligence is not necessary

Question 28

What does it mean to demand assurance?

What if they don’t give it?

Answer 28

It means demanding assurance of performance, and can only be done with reasonable grounds.
If it’s not given, they assume it’s anticipatory repudiation.

Question 29

What are the buyer’s right to damages if they accept nonconforming goods?

Answer 29

The difference between the value of conforming goods and the value of the goods as delivered plus incidental and consequential damages

Question 30

Define cover

Answer 30

Being able to purchase comparable goods

Question 31

Define replevin

Answer 31

The right to recover goods wrongfully in the hands of the seller

Question 32

What if your goods are stolen, and the thief sells them?

What are the exceptions?

Answer 32

Usually you can get them back
If you entrust them to a merchant who deals in them and the merchant sells it, you can only sue the merchant for compensatory damages
If you accept a bad check, it’s the same deal.