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Flashcards in Sales Deck (21):
1

Destination Contract

agreement that generally transfers title and risk of loss of goods to the buyer when the goods reach their destination (buyer's place of business)

2

Firm offer

offer that is irrevocable despite lack of consideration (must be in writing and made by a merchant)

3

Good faith

parties will operate honestly in the course of the transaction

4

Goods

Moveable personal property

5

Implied warranty

guarantee that automatically exists

6

Merchant

person who regularly buys or sells the goods that are involved in the contract

7

Perfect tender rule

goods that the seller delivers must conform exactly to the terms of the contract. 

If not buyer can: (a) reject entire lot (b) accept entire lot (c) accept some unites and reject remaining

- contract may stipulate seller need not provide perfect tender

8

Risk of loss

which party will bear the loss if the goods are damaged or destroyed

independent of title under UCC, but rules regarding the transfer of both are similar

if breach of contract occurs, risk of loss falls on the breaching party

9

Shipment contract

agreement that generally provides that title and risk of loss pass to the buyer when the seller delivers the goods to the common carrier

10

 Strict product liability

sellers are held responsible for injuries that their goods cause (even if they practiced due care) if

1. product was defective when sold

2. defect is unreasonably dangerous to user

3. product reaches user without significant changes

4. defect caused injury

11

Tender

when a party to the contract is ready, willing, and able to perform the promise of the contract

12

Transfer of title

ownership of goods transferred from seller to buyer

13

Warranty

guarantee concerning the quality, performance or other characteristics of the good

warranty of title: seller warrants good title, rightful transfer and freedom from any lien 

express warranties: (written or oral) promise made by seller that becomes part of the basis of the bargain (sales talk, puffing or seller's opinion does not create express warranty)

implied warranties: (a) warranty of merchantability (if seller is a merchant) - goods are fit for ordinary purpose, properly packages and labeled (b) warranty of fitness for a particular purpose

14

Uniform Commercial Code

Controls contracts for the sale of goods for any dollar amount (includes sales & leases of hardware, sales & licensing of software unless highly customized - then common law applies)

transaction need not involve a merchant

fills in missing terms of contract where parties intent was to create a contract (common law requires terms be stated, or no contract exists)

15

Acceptance under UCC

Intent to be bound: 

creates battle of forms: between merchants, additional terms included in accptance become part of the contract unless (a) original offer precludes such, (b) new terms materially alter the original offier, or (c) orginal offeror gives notice of his/her objection within a reasonable time

16

Accomodation

When a seller ships substitute goods because the seller does not have the goods ordered by the buyer

- if buyer accepts, contract exists

- if buyer regects, there is no contract 

- considered breach of contract until accepted

17

Excused Performance

Parties releived from their promise to perform if:

-destruction of goods prior to performance

-commercial impracticality (performance has become excessively expensive or difficult)

-Assurance of performance (reasonable basis to believe other party will not perform as promised)

18

Anticipatory repudiation

one party clearly indicates that it is unwilling or unable to perform as promised

19

Document of Title

any document that serves as adequate evidence that the holder of said document is entitled to receive, hold and dispose of the goods the document covers

-Bill of lading: issued by a private or common carrier in exchange for goods delivered to it for shipment (negotiable or nonnegotiable)

-Wharehouse receipt: issued by person engaged in storing goods, acknowledges receipt of goods, describes goods to be stored and contains terms of storage contract (negotiable or nonnegotiable)

20

sale on approval

allows buyer to return the goods even if they conform to the contract. title and risk of loss remains with seller until the buyer accepts goods

21

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