REG 3 - R6 Contracts and Sales Flashcards Preview

CPA Exam > REG 3 - R6 Contracts and Sales > Flashcards

Flashcards in REG 3 - R6 Contracts and Sales Deck (20):
1

In Privity (regarding contracts)

One of the parties to a contract (if they are named in the contract)

2

Intended Beneficiaries

someone who intended to be benefited by a contract other than the bargaining parties.

3

Consideration

where parties promise to do something with legal value

4

3 Components of a Contract

1. Offer
2. Acceptance
3. Consideration

5

Merchant's Firm Offer

Offer made by a merchant firm, in writing and must remain open until time specified and if no time is specified, offer must stay open for a reasonable period of time - Not exceeding 3 months

6

Fraud in the Inducement

When a person is defrauded into entering into a contract because its terms or the surrounding circumstances are not as represented. This contract is voidable.

7

Fraud in the Execution

The party did not know that he was signing a contract. This renders a contract void.

8

Non-assignable contract

Insurance polices

9

Express Warranty

An affirmation of fact or promise that becomes part of the basis of the bargain

10

Warranty of Merchantability

A promise that the goods will be fit for their ordinary purposes.

11

Warranty against Infringement

A promise that the goods sold do not infringe on another's patents or copyrights.

12

Perfect Tender Doctrine

A buyer may reject goods if they do not conform to the contract in any way.

13

Good Faith Requirement met by merchant

The merchant must observe the reasonable commercial standards of fair dealing in the trade

14

AF.O.B. Destination

The seller has the risk of loss until he places conforming goods into the buyer's hands at the named destination

15

Auction without Reserve

The goods must be sold if an offer is made. If no offer is made within reasonable time, the goods need not be sold.

16

Auction with Reserve

An auctioneer may withdraw the goods for sale at any time until the auctioneer announces completion of the sale.

17

Essential term under Sales Article of UCC

Quantity; and an output or requirements term qualify

18

Exceptions to Statute of Frauds sale of goods over $500 must be in writing rule

SWAP
1. Specially manufactured goods
2. Written confirmation between merchants
3. Admission in court
4. Performance

19

F.O.B. Purchaser's Loading Dock

Seller controls risk of loss and only passes to buyer when the goods reach the purchaser's loading dock.

20

Firm Offer

An offer that must remain open despite the absence of consideration