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Advanced Sales (or, "I could have used some of this stuff in the Contracts lectures...")
Terms in this set (25)
Are sales of structures to be removed from the land governed by the UCC or the common law?
UCC, if severance is to be made by the seller.
Is intellectual property or intangible assets governed by the UCC or the common law?
If acceptance is not specified in the offer, how may an offeree accept under the UCC?
By return promise or return performance.
What if a seller tries to accept by shipping the wrong goods?
The UCC treats this act as acceptance plus a breach.
But what about if a seller notifies the buyer that the wrong goods are being shipped as an accommodation?
The shipment is treated as a counteroffer. No acceptance occurs.
If the offeree accepts an offer but proposes additional or different terms to an offer, how can those terms come in under the contract?
Under 2-207(2): both parties must be merchants; the new term must not materially alter the deal; the initial offer must not expressly limit acceptance to its terms; the offeror must not reject the term within a reasonable time.
What happens if there is no contract but the parties act as if one exists?
Under 2-207(3): all the terms are going to drop out except for those the parties have agreed to in writing and the court will gap fill the rest.
What is the difference between an auction with no reserve and an auction with reserve?
No reserve: the seller cannot withdraw after a bid has been received. Reserve: the seller can withdraw after a bid has been received. *Reserve is default.
Does part performance satisfy the Statute of Frauds?
Yes, but only for the goods delivered and accepted.
What are two exceptions to SOF?
1. Failure to respond to a confirming memo within 10 days (where both parties are merchants).
2. A maker of custom-made or specially manufactured goods who has substantially begun to perform the manufacture of goods.
What are four warranties to consider in a UCC problem?
1. Warranty of title (title is good; transfer is rightful)
2. Express warranty (use of sample or model)
3. Implied warranty of merchantability (ordinary commercial purposes; merchant deals in good at issue)
4. Implied warranty of fitness for a particular purpose (reliance on seller's expertise; selection of good for a special purpose)
How can a buyer revoke acceptance of goods?
After discovering a defect within a reasonable time upon acceptance.
When does the seller have a right to cure?
If there is time left on the contract or if the seller had reasonable grounds to believe that the buyer would accept.
How can a buyer properly reject goods?
Notify seller within a reasonable time of the particular defect and hold the goods for a reasonable time so the seller can get the goods back.
What can the buyer do if the seller fails to give instructions after nonconforming goods are delivered?
Continue to store goods on seller's account, ship goods back, or resell goods for the seller.
What is the difference between tender at seller's place of business, a shipment contract, and a destination contract?
1. Seller's place of business: seller must give goods to buyer.
2. Shipment contract [presumed under UCC]: seller must get goods to common carrier, seller must make arrangements for delivery, and seller must notify the buyer.
3. Destination contract: seller must get goods to buyer's business and notify buyer ("F.O.B. buyer's business).
What is the checklist in a risk of loss problem?
1. Does the contract allocate the risk of loss?
2. Did either party breach in any way?
3. Were the goods shipped?
Shipment contract: ROL: buyer
Destination contract: ROL: seller
4. Is the seller a merchant?
Yes: Seller has ROL until buyer receives goods.
No: Buyer has ROL once seller tenders goods.
When does a seller or buyer have an insurable interest in a good?
Seller: has title or a security interest
Buyer: goods are specifically identified
What if identified goods are destroyed?
Ask (1) did ROL pass to buyer? (2) Has there been total destruction? With total destruction, the contract is avoided (neither side must perform or pay). With damage but not destruction, the contract is avoided unless the buyer wishes to take the damaged goods at a reduced price.
When can a buyer reject an installment contract?
When there is substantial impairment in the installment that cannot be cured.
When is a repudiation valid (or when does it permit the other party to take legal action)?
When the repudiation is clear and unequivocal.
Can a party retract a repudiation?
Yes, but only if the other side has not begun a lawsuit for breach or has not relied on the repudiation by changing its position.
How do you calculate lost volume profits?
Contract price - manufacturing costs.
What is replevin?
Remedy where the buyer can recover specifically identified goods when she cannot recover a breach by the seller after making reasonable effort.
When does a seller have a right of reclamation?
When the buyer is insolvent at the time of purchase, when the seller demands the return of the goods within 10 days of receipt (or a reasonable time if the buyer misrepresented insolvency), and if the buyer still has the goods.
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