R6 - Business Law (Sales) Flashcards
UCC Article 2 applies only to what?
Sale of goods
Merchant’s firm offers are irrevocable for the time stated, or if no time is stated, for a reasonable time, but in no event longer than what?
3 months (OR 90 days)
What are the three components to qualify as a merchant’s firm offer?
- seller must be a merchant
- offer must be in writing and signed by merchant
- offer must give assurances it’ll be kept open for a certain time
The general rule under the UCC is that a specific ________ must be stated in a sales contract.
Quantity
The general rule under the UCC is that a specific quantity must be stated in a sales contract. An exception is made for ______ and __________ contracts.
Output and requirement
Rick, a book distributor, offers to sell Steve, a bookstore, 100 books for $1 each. Steve accepts. Rick subsequently discovers that he’ll lose money on the deal, and so asks Steve if he would be willing to pay $1.05 for each book. Steve agrees. Is the modification binding?
YES
EXPLANATION: Modifications under UCC are enforceable without consideration.
What is the UCC statute of limitations?
Four years from date of breach
If a merchant sends another merchant a written confirmation of a contract that is sufficient to bind the sender, it will also bind the recipient if she does not object within how many days?
10 days
Contracts for the sale of goods for $500 or more must be evidence by a writing signed the party being sued. What are the four exceptions (SWAP)?
Specially manufactured goods
Written merchant’s confirmatory memo
Admission in court
Performance
Is risk of loss dependent on title?
NO
With shipment contracts risk of loss passes to the buyer when?
When the goods are delivered to the carrier (“in truck”)
With destination contracts, risk of loss passes to the buyer when?
When the goods reach the destination and seller tenders delivery
What does FAS stand for?
Free Along Side
What does CIF stand for?
Cost, Insurance, and Freight
If you see the term FAS, who has the risk of loss?
Buyer
EXPLANATION: Free Along Side is a price term that requires the seller to deliver the goods alongside of a specified vessel. Risk of loss passes to the buyer when the seller gets the goods alongside the vessel.
If you see the term CIF, who has the risk of loss?
Buyer
EXPLANATION: The term CIF means the contract price includes the cost of the goods, insurance, and freight. Risk of loss is on buyer during shipment.
If it’s FOB - Seller’s Location, what type of contract is it?
Shipment contract
EXPLANATION: Buyer has risk of loss.
If it’s FOB - Buyer’s Location, what type of contract is it?
Destination contract
EXPLANATION: Seller has risk of loss.
What is a tort?
Wrongful act
If you want to sue someone for ordinary negligence, what must you prove?
Defendant failed to use reasonable care
Those injured by goods can sue in tort for what?
Strict products liability
What is the focus on in strict products liability?
Focus on the product and not on the seller’s conduct
What are the key elements of strict products liability?
- Defective product
- Caused injury
- Unreasonably dangerous
- Seller in the business of selling these goods
- No substantial changes
Is privity required with strict products liability?
NO
EXPLANATION: Plaintiff need not have bought and seller need not have sold to the injured party.
What is defined as the right to recover goods wrongfully in the hands of the seller?
Replevin
How long are copyrights good for under federal law?
Author’s life + 70 years
How long are patents good for under federal law?
GR: 20 years
On September 27, Summers sent Fox a letter offering to sell Fox a vacation home for $150,000. On October 2, Fox replied by mail agreeing to buy the home for $145,000. Summer did not reply to Fox. Do Fox and Summers have a binding contract?
No, b/c Fox’s letter was a counteroffer
EXPLANATION: In a common law contract situation, a communication will be effective as an acceptance only if it assents to each and every term of the offer (the mirror image rule).
