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CPA Review REG > Sales Law > Flashcards

Flashcards in Sales Law Deck (11):
1

What sales are covered under the Uniform Commercial Code (UCC)?

Only sales of goods are covered under the UCC.

2

What elements are needed for a sale covered under the Uniform Commercial Code (UCC)?

Offer - You offer to sell something at a price

Acceptance - the other party accepts

Consideration - Something of value has been exchanged for the goods

Note: The UCC only covers sales of goods.

3

What are the elements of a Firm Offer?

You offer to sell something at a price and keep that offer open for a set period of time

3 months max

Only merchants can make firm offers

Must be in writing and signed

4

Under what situations are sales of goods covered by the Statute of Frauds? What are the exceptions?

If value of goods sold is > $500; sales contract must be in writing

Exceptions: Merchants can enter into oral contracts for > $500 items.

Oral contracts are binding for special or uniquely-made items (i.e. custom cabinets or custom furniture that could not be sold if buyer reneged)

5

When does title and risk of loss transfer on a sale of goods?

If terms are:

FOB shipping point: Title transfers at point of shipment (i.e. when loaded on truck)

FOB destination: Title and risk transfers once item is delivered

6

What is a Warranty of Title?

The seller has the right to sell the good and no one else can stake claim to that good

7

What is Warranty of Merchantability?

This good will do its intended purpose

Can be disclaimed

8

What is Warranty of Fitness?

This good is the right choice for you based on the seller's expert opinion

Can be disclaimed

9

What is strict liability with respect to buyer protection?

Manufacturers of goods cannot disclaim that their products will be safe

Can be liable if negligent

10

What are non-conforming goods with respect to buyer protection?

Buyer can reject some or all of the shipment if the seller didn't perform as agreed and ship what was expected

Must give notice

Must give seller a chance to remedy the situation

11

What is the statute of limitations with respect to buyer protection?

Buyer must sue to recover damages within 4 years.