WEEK 12 Flashcards
(12 cards)
What is the Caveat Emptor Principle
- Buyer beware
- Risk of defects of goods belongs to the buyer if he had an opportunity to inspect the goods being purchased and there was no misrepresentation with respect to the goods being sold by the seller
Unless the buyer relied on the seller or the seller way aware of defects that could not have been seen through visual inspection
What is the SGA?
- Sales of goods act
- Applies only to the sale and agreements to sell goods in exchange for money
- ONLY FOR GOODS
What are the remedies for breach of implied terms from the SGA?
Breach of condition = rescission + damages
Breach of warranty = damages
What are the implied terms in an SGA
- Sellers title (Condition and Warranty)
- Description and sample of goods (Condition)
- Payment (Warranty)
- Delivery (Condition)
Explain the concept of sellers title in implied terms
Implied condition = Seller has good title
Implied warranty = Title is free from undisclosed charges and encumbrances
Explain the implied terms of description and sample
- If description is give, it must be received as described
- If sample is given, it must be received as sampled
Explain the implied terms of payment
Payment = implied warranty that payment will be made upon delivery unless agreed otherwise
In terms of consignment, the agent will pay the consignor upon sale
Explain the implied terms of delivery
Delivery = Implied condition that the goods will be delivered in the quantity agreed to on the date specified (reasonable time is not date specified)
Place of delivery is normally at the point of sale when they agreed but can also be modified to Free on board, cost, insurance, freight, and cash on delivery
Rules when title and risk pass to the buyer
- Unconditional contract, for sale of goods in deliverable state title passes at the time the contract is made
- Conditional on seller doing something to put the goods in a deliverable state, title passes when the work is complete and the buyer receives notice
- Conditional on the requirement of checking weight, testing, or measuring, title passes when the act is done and the buyer receives notice
- Title passes when you express acceptance or do not reject within a reasonable time
- Title passes when goods are already delivered and cannot be changed as it is already on its way
Differentiate a deposit to a downpayment
Deposit
- You cant sue
- Downpayment
- You can sue for the remainder of the sum and keep the payment if title is with the buyer
- if title is not with the buyer yet, seller claims damages and returns the downpayment
What are the remedies for sellers when goods are not paid for?
- Repossession within 30 days
- Goods must be in the same condition and identifiable to maintain this right - Resale and Damages
- Seller can sure the buyer for breach of non-acceptance of the goods but must mitigate where possible like resell the goods - Lien
- Right against the property itself
- Typically used as security for a debt, ensuring that the property cannot be sold or refinanced until the debt is repaid. - Stoppage in transit
- If goods are in route, seller can call carrier to stop the transit unless it is under other payment terms that are non credit
Buyer remedies for material misrepresentation
- Fraudulent/negligent misrepresentation = rescission and damages
- Innocent misrepresentation = rescission only
- Breach of condition
Return the goods and rescind the contract unless goods have already been altered it will be damages only - Breach of warranty is damages only
