Business Law Midterm

Remedies if buyer breaches contract:

- Cancel Contract (last resort) - Resale (most preferred) & sue for damages - Sue for price

Negligence Defenses

- Contributory Negligence - Comparative Negligence (Plaintiff can recover for only that portion of harm attributable to the defendant's negligence) - Modified Negligence (Plaintiff can recover the % of harm if the plaintiff's neg is <50%) - State-of-the-art

Remedies if seller breaches contract:

- Cover (substitute goods) - Specific performance (forced to complete contract) -

The Perfect Tender Rule Exceptions

- Norms in the industry & past dealings between the parties - A cure can be effected by the seller - If the nonconformity is very minor - If it's commercially impractical to perfectly tender

4 Categories of Marks

1) Generic (least specific) 2) Descriptive 3) Suggestive 4) Arbitrary or fanciful (most specific)

Criteria for Patent Objects

1) Must be patentable 2) Must be novel or new 3) Must be useful 4) Must be non-obvious

3 Theories of Recovery for product liability

1) Negligence 2) Strict product liability 3) Breach of warranty

3rd Party Liability can apply to

1) Privity or Near-Privity (the Ultramares rule) 2) Foreseen users & classes of Users (The Restatement Rule) 3) Reasonable foreseeable users

4 Scenarios for Sale of Goods

1) Simple Delivery Contract 2) Common-Carrier Delivery Contract 3) Goods-in-bailment Contract 4) Conditional Sales Contract

Fraud Requirements

1) The defendant made a misrepresentation 2) The defendant acted with the intent to deceive 3) The plaintiff justifiably relied on the defendant's misrepresentation 4) The plaintiff was damaged as a result

4 Elements of Negligence

1) The defendant owed a duty of care to the plantiff 2) The defendant breached that duty of care supplying a defective product 3) This breach of duty caused the plantiff's injury 4) The plantiff suffered actual injury

Fair Use Doctrine Factors

1) The purpose & character of the use (commercial or educational) 2) The nature of the copyrighted work 3) The amount & substantiality of the portion used in relation to the copyrighted work as a whole 4) The effect of the use on the potential market used in relation to the work

Criteria for Copyright

1) Work must be fixed 2) Work must be original 3) Work must be creative

Time Limit under UCC to sue

4 years.

Parol Evidence Rule

A legal concept that aims to protect sales or lease contracts that the parties intended to be the final expression of their agreements.

If an owner entrusts the possession of goods to a merchant who deals in goods of that kind, the merchant has no authority to transfer any rights in the goods to a buyer in the ordinary course of business. A) False B) True C) More information is needed to answer the question

A) False

Your accounting firm audited the financial statements that appear in XYZ, Inc.'s SEC Form 10K, a document filed under the Securities Exchange Act of 1934. There was a material omission or misstatement in them and you get sued. Which of the following is true? A) If you can show you acted in good faith you will not be liable. B) The plaintiff will not have to show reliance on the financial statements to win the case. C) It will not matter whether the plaintiff knew about the omission or misstatement. D) Your firm will be liable unless it acted with due diligence. E) The price of XYZ need not be affected for you to be liable.

A) If you can show you acted in good faith you will not be liable.

Sam, who owned an appliance store, contracted with Sharon to supply all the new equipment for Sharon's new restaurant. Sharon wanted all the equipment by October 15th so that she could get the restaurant started and obtain holiday business. Sam and Sharon entered into an agreement by which Sharon would pay Sam $300 per day for every day he was late in providing the appliances. Which of the following is true regarding the section of the agreement involving the late charges? A) It is known as a liquidated damages provision which will be enforced by a court so long as it is not so far out of reasonable range as to be punitive in nature. B) It is known as an invalid provision which will not be enforced. C) It is known as a punitive damages provision which will be enforced by a court only if wrongdoing or fraud on the part of the defendant can be established. D) It is known as a penalty provision which will be enforced by a court so long as the plaintiff can establish proof of compensatory damages in at least the amount of recovery requested. E) It is known as a consequential damages provision which will be enforced by a court only if incidental damages can be established.

A) It is known as a liquidated damages provision which will be enforced by a court so long as it is not so far out of reasonable range as to be punitive in nature.

If quantity is left open in a contract for the sale of goods under the UCC, how will a court most likely interpret this provision? A) The court generally has no basis for determining a remedy. B) The court will decide the quantity. C) A "reasonable" quantity is supplied at the time of trial. D) A "reasonable" quantity is supplied at the time of delivery. E) The court will look to the specific industry standards in the UCC.

A) The court generally has no basis for determining a remedy.

In a destination contract who bears the risk of loss while the goods are in transit? A) The seller B) The loss is proportioned 25% to the buyer and 75% to the seller C) The buyer D) The loss is proportioned 75% to the buyer and 25% to the seller E) The loss is proportioned 50% to the buyer and 50% to the seller

A) The seller

Which of the following is not a criterion that must be satisfied before a patent can be granted? A) The subject of the patent must be fixed. B) The object of the patent must be useful. C) The object of the patent must be novel. D) The object of the patent must be nonobvious. E) The subject of the patent must be patentable

A) The subject of the patent must be fixed.

Market Share Theory

Allows for class action lawsuits when long term effects of a product are discovered.

Express Warranties

Any description of a good's physical nature or its use, either in general or specific circumstances, that becomes part of a contract.

When courts interpret sales and lease contracts, how do they prioritize the combination of the following four factors? A) (1) Express terms, (2) Course of dealing, (3) Course of performance, and (4) Usage of trade B) (1) Express terms, (2) Course of performance, (3) Course of dealing, and (4) Usage of trade C) (1) Express terms, (2) Usage of trade, (3) Course of dealing, and (4) Course of performance D) (1) Usage of trade, (2) Course of performance, (3) Course of dealing, and (4) Express terms E) (1) Course of performance, (2) Course of dealing, (3) Express terms, and (4) Usage of trade

B) (1) Express terms, (2) Course of performance, (3) Course of dealing, and (4) Usage of trade

Saul is very creative and he writes new lyrics to a popular Halsey song. It makes fun of accountants and is very popular. The song's copyright holder sues Saul for infringement. Saul's best defense is: A) He did not intend to cause any harm to the original song B) Parodies are considered fair use under copyright law C) He has not made any money on the song. D) Any song making fun of accountants should not be subject to copyright law E) His song is only three minutes long and the original is four minutes

B) Parodies are considered fair use under copyright law

Rita develops a new product and puts it in a very distinctive bottle. She registers trademarks for the name of the product and the bottle. Lisa starts making a competitive product in a very similar bottle with a similar name. If Rita sues Lisa what is the likely outcome? A) Rita will win regarding the name, but not the bottle B) Rita may win on both if she can show the likelihood of confusion C) Shapes can never be trademarked so Rita will lose D) Rita will win regarding the bottle, but not the name E) Rita will be required to show that Lisa knew about her product if she expects to win

B) Rita may win on both if she can show the likelihood of confusion

Which of the following is a defense used by a defendant to demonstrate that his alleged negligent behavior was reasonable, given the available scientific knowledge existing at the time the product was sold or produced? A) Assumption of the risk. B) State-of-the-art defense. C) Scientific knowledge doctrine. D) Reasonable behavior defense. E) Reasonable manufacturer defense.

B) State-of-the-art defense.

Sally contracted with Ben, who operates a farm in Guatemala, for the importation of some great coffee beans for her coffee shop. The contract provided that Ben would be sure the coffee arrived by September 1st, in time for an open house Sally had planned. Sally was not worried because Ben had always delivered on a timely basis in the past. Ben was busy and was late getting the beans in transit. The beans did not arrive until September 2nd. Sally shipped them back and refused to pay. Ben sued. What is Sally's best defense? A) That Ben failed to materially perform. B) That Ben violated the perfect tender rule. C) That Ben failed to substantially perform. D) She has no defense because he was only one day late, and she should pay. E) That Ben's beans were not that good and that she decided to go with another brand.

B) That Ben violated the perfect tender rule.

Which of the following was the result on appeal in In Re Simon Shiao Tam, the case in the text involving a challenge to the Lanham Act's requirement that a mark not be disparaging? A) The court found the disparagement requirement did not violate the First Amendment, but refused to comment on whether or not the "Slants" mark was disparaging. B) The court found the disparagement requirement to be unconstitutional under the First Amendment, thus the denial of the "Slants" mark was vacated. C) The court found the disparagement requirement to be constitutional under the First Amendment, but because the mark was derogatory, affirmed the government's denial of the "Slants" mark. D) The court found the disparagement requirement to be unconstitutional under the First Amendment, but affirmed the government's denial of the "Slants" mark. E) The court found the disparagement requirement to be constitutional under the First Amendment, thus the denial of the "Slants" mark was affirmed.

B) The court found the disparagement requirement to be unconstitutional under the First Amendment, thus the denial of the "Slants" mark was vacated.

Ramona has an idea for an electric animal brush that vacuums the animal hair and transforms it into usable sewing thread. Ramona calls her device the Hair-2-Thread and begins selling the device in January. Later that year, she decides the device would sell better if she had a patent, and she files the patent application in December. After finally receiving the patent the following year, Ramona discovers a similar device, the HairSew, is being sold by Saya and files a patent infringement lawsuit. Where could Ramona file a patent infringement suit? A) Any state or federal court. B) Any federal court or the USPTO. C) A federal court. D) The USPTO. E) A state court.

C) A federal court.

Belinda orders a certain type of hybrid rose for her wedding. A disease sweeps through that type of rose, and the florist could only obtain the roses at great cost if at all. Which of the following is the appropriate term for the florist's best defense? A) Unreasonable bride B) Commercial unreasonableness C) Commercial impracticability D) Substantial hardship E) Unforeseen circumstances

C) Commercial impracticability

If it is generally accepted in the trade that a certain product is always preassembled, the failure of the seller to deliver the goods in that condition would be a breach of the ____. A) Implied warranty of merchantability B) Implied warranty of quality C) Implied warranty of trade usage D) Express warranty of integrity E) Implied warranty of fitness for a particular purpose

C) Implied warranty of trade usage

What are the rights of the parties under the UCC to provide for remedies in addition to those provided by the UCC? A) Parties to a commercial sales agreement may provide for remedies in addition to those provided by the UCC only if both parties are merchants. B) Parties to a commercial sales agreement may not provide for remedies in addition to those provided by the UCC. C) Parties to a commercial sales agreement may provide for remedies in addition to those provided by the UCC. D) Parties to a commercial sales agreement may provide for remedies in addition to those provided by the UCC only in transactions involving over $10,000 in value. E) Parties to a commercial sales agreement may provide for remedies in addition to those provided by the UCC only if both sides are represented by an attorney.

C) Parties to a commercial sales agreement may provide for remedies in addition to those provided by the UCC.

Toshi owns a specialty doll store and purchases dolls regularly from Yolanda, a doll distributor. For the past few years, Toshi and Yolanda have signed yearly contracts that set forth the terms of the agreement. Although delivery terms are set forth in the agreement, if the delivery comes a day or two late or if Yolanda substitutes doll purses for shoes, Toshi does not complain, as she knows the next shipment will have more shoes than purses. The first delivery of the new doll line (the first shipment under the new contract) is scheduled to arrive on December 1; however, it arrives on December 2 and includes very few doll shoes and instead includes many doll purses. Yolanda refuses to accept the late shipment and calls Toshi to complain. Can Toshi reject the dolls because of Yolanda's late delivery? A) Yes, under the perfect tender rule, the seller must conform to the specifications of the contract. B) Probably not, because the usage of trade exception is inapplicable. C) Probably not, because the course of dealings between the parties creates an exception to the perfect tender rule. D) Yes, because the delivery must comply with contract specifications. E) You Answered Probably not, because the course of performance of this contract creates an exception to the perfect tender rule.

C) Probably not, because the course of dealings between the parties creates an exception to the perfect tender rule.

Which of the following may be sued in product liability actions? A) Retailers and wholesalers but not manufacturers. B) Manufacturers but not retailers or wholesalers. C) Retailers, wholesalers, and manufacturers. D) Retailers and manufacturers but not wholesalers. E) Wholesalers and manufacturers but not retailers.

C) Retailers, wholesalers, and manufacturers.

Which of the following requires that the seller make proper shipping arrangements and deliver goods to the buyer via a common carrier but not guarantee the safety of goods to their destination? A) Destination contracts B) Transfer contracts C) Shipment contracts D) Common-carrier contracts E) Risk contracts F) Entrustment contracts

C) Shipment contracts

In determining whether a mark infringes on a registered trademark, which of the following factors would the court be least likely to consider: A) The similarity of the two marks. B) The similarity of the products or services in issue. C) The market share of the plaintiff and defendant. D) The sophistication of consumers. E) The likelihood of confusion.

C) The market share of the plaintiff and defendant.

Jack went into a hardware store to purchase a saw. He told the salesclerk that he wanted a saw that would cut through copper tubing. The salesclerk referred Jack to a wall of saws, and Jack purchased one. What kind of warranty, if any, did the salesclerk make? A) The salesclerk made an express warranty, a warranty of trade usage, and a warranty of fitness for a particular purpose. B) The salesclerk made an express warranty, but not a warranty of fitness for a particular purpose or a warranty of trade usage. C) The salesclerk made a warranty of fitness for a particular purpose, but not a warranty of trade usage. D) The salesclerk made an express warranty, but not a warranty of fitness for a particular purpose. E) The salesclerk made a warranty of trade usage, but not a warranty of fitness for a particular purpose or an express warranty.

C) The salesclerk made a warranty of fitness for a particular purpose, but not a warranty of trade usage.

Mirror-image Rule

Common law, not UCC. States that an offeree's acceptance must be on the exact terms of the offer.

Feasible Alternative Test

Compares the usefulness & safety of the design to an alternative design

Intellectual Property

Consists of the fruits of someone's mind. (Trademarks, trade secrets, patents & copyright)

CISG

Contracts for the International Sale of Goods

CIF

Cost, Insurance and Freight. Seller puts the goods in possession of a carrier.

Tomas took a number of wedding photos at Maura's wedding. He was paid as the photographer. On all of the photographs, he appropriately noted in the bottom right-hand corner information showing that he was claiming copyright protection. Maura came to see Tomas three years after the initial photographs were taken and requested that he grant her permission to run off as many copies as she wanted at the local photo shop from the pictures that she initially purchased. The photo shop had refused to reproduce the photographs without his permission. When he refused to give her permission to do so, Maura started a heated argument. She told Tomas that photographs are not entitled to copyright protection. She also told him that even if he was correct that there was some copyright protection, it only lasted for two years and that, in any event, damages for copyright infringement are unavailable. Regarding Maura's claim pertaining to damages, which statement is accurate? A) It is not necessary that a copyrighted work be registered in order for the creator to obtain damages. B) Some material that is subject to copyright must be registered before its creator may recover damages for infringement, but that is not true for photographs. C) It is necessary for a photograph to be registered before the creator may obtain damages, but that is not true for other materials subject to copyright. D) Damages are available, but a copyrighted work must be registered in order for the creator to recover damages from infringement. E) She is correct that damages are unavailable in copyright infringement actions.

D) Damages are available, but a copyrighted work must be registered in order for the creator to recover damages from infringement.

Bryce's accountant is Caleb and his attorney is Delilah. All states protect, as privileged information, Bryce's communications with A) neither Caleb nor Delilah. B) Caleb only. C) Caleb and Delilah. D) Delilah only.

D) Delilah only.

Which of the following are commonly used theories of recovery in product liability cases? A) Strict product liability, negligence per se, and breach of warranty. B) reach of warranty, negligence, and negligence per se. C) Negligence, negligence per se, and breach of warranty. D) Negligence, strict product liability, and breach of warranty. E) Civil, criminal, and administrative.

D) Negligence, strict product liability, and breach of warranty.

Mona, an accountant, prepares for NuTech Corporation a financial statement that omits a material fact. The financial statement is included in NuTech's registration statement, which Pam reads. Pam buys NuTech stock. Under Section 11 of the Securities Act of 1933, for Mona to be liable for the omission, Pam must show that A) the omission had no causal connection to her loss. B) Pam was in privity with NuTech C) Pam relied on the omission. D) Pam suffered a loss on the stock. E) Pam knew about the omission before making her purchase.

D) Pam suffered a loss on the stock.

Compliance with federal laws may lead to the defense that use of state tort law is ______________ by a federal statute designed to ensure the safety of a particular class of products. A) Refuted B) Complimented C) Extinguished D) Preempted E) Upheld

D) Preempted

ABC, Inc., an Ohio corporation, has a contract with a Canadian supplier of maple syrup. There is a dispute under the contract and ABC would like to know what law will apply in interpreting the contract? A) When buyer and seller are from different jurisdictions the law of the jurisdiction where the party drafting the contract is located applies B) The UCC will apply C) Ohio law will apply because the buyer is in Ohio D) The CISG will apply E) Canadian law will apply because the seller is in Canada

D) The CISG will apply

Assuming a buyer that is insolvent has breached a contract by not paying for goods that are in transit, which of the following may occur? A) The carrier may not stop delivery under any circumstances. B) The carrier may stop delivery only if the quantity shipped is a large shipment such as a carload or truckload. C) The carrier may stop delivery only if ordered to do so by the bankruptcy judge. D) The carrier may stop delivery on the entire shipment. E) The carrier may stop delivery only if a signed writing exists by which the buyer agreed to the remedy of stopping shipment.

D) The carrier may stop delivery on the entire shipment.

In reference to the case in the text DeJesus v Cat Auto Tech. Corp., what was the effect of the defendant's payment for goods without inspection on the day of delivery, when the delivery was approximately two weeks after the time called for by the contract? A) The defendant did not lose any rights because under the UCC he had 48 hours after delivery in which to object to late delivery. B) The defendant did not lose any rights because under the UCC he had 10 days after delivery in which to object to late delivery. C) The defendant did not lose any rights because under the UCC he had 7 days after delivery in which to object to late delivery. D) The defendant effectively waived the performance provisions of the contract regarding the time for delivery. E) The defendant did not lose any rights because under the UCC he had 24 hours after delivery in which to object to late delivery.

D) The defendant effectively waived the performance provisions of the contract regarding the time for delivery.

Liquidated Damages

Damages identified before the breach occurs

State-of-the-art Defense

Defendant demonstrates his negligent behavior was reasonable, given the available scientific knowledge at the time.

Defense of Negligence

Deny failing to meet professional standards, failure is not the cause of client's losses, comparative negligence

As referenced in the case in the text, Toys "R" Us, Inc. v. Canarsie Kiddie Shop, Inc., which of the following is true regarding generic terms? A) The rule that generic terms are ineligible for protection as trademarks does not apply to sub-classifications or varieties of goods. B) Generic terms are eligible for protection as trademarks only if they have been used for at least seven years. C) Generic terms are eligible for protection as trademarks only if they have been used for at least ten years. D) The rule that generic terms are ineligible for protection as trademarks does not apply to words that designate an entire species of products. E) Generic terms are not eligible for protection as trademarks.

E) Generic terms are not eligible for protection as trademarks.

John is a CPA employed by a law firm. Which of the following is true? A) Accountants can only claim a privilege when auditing publicly traded companies. B) Accountants can only claim a privilege when auditing privately held companies. C) The accountant-client privilege and the attorney-client privilege are the same in most states. D) Because John is a CPA, he will be able to assert the accountant-client privilege to avoid testifying. E) If John is working under the direction of an attorney he may be able to avoid testifying in a case based on the attorney-client privilege.

E) If John is working under the direction of an attorney he may be able to avoid testifying in a case based on the attorney-client privilege.

Which of the following is true regarding any right to "cover" in regard to a buyer's rights under the UCC? A) The UCC recognizes the right of sellers to resell goods to other buyers in order to cover contractual obligations. B) The UCC recognizes the right of cover in regard to the right of sellers to cover transactions involving installment sales with financing statements. C) The UCC recognizes that sellers have a right to cover and find substitute buyers in the event of a breach of contract. D) The UCC does not recognize any concept called a right to cover. E) The UCC recognizes the right of buyers to cover, or substitute, goods for those due under a sales agreement.

E) The UCC recognizes the right of buyers to cover, or substitute, goods for those due under a sales agreement.

Jack and Jill hire Slick, an estate planning attorney to prepare a will. There is disagreement and a lawsuit results. Slick thinks to would better for him if the UCC applies, but Jack and Jill disagree. The court is likely to conclude: A) The court will apply the UCC to part of the contract, but not to all of it B) The UCC will apply because the will must be filed with the probate court and the will is tangible property C) Whether the UCC applies will depend upon whether the contract also included the preparation of a trust D) The UCC applies if the contract also included the preparation of a trust, a living will, and a power of attorney E) The UCC will not apply because attorneys provide services

E) The UCC will not apply because attorneys provide services

Under which of the following is the breach of warranty theory of liability established? A) The Federal Commercial Code. B) The Restatement (Third) of Torts. C) The Restatement (Second) of Torts. D) The Federal Contract Guide. E) The Uniform Commercial Code.

E) The Uniform Commercial Code

What happens when a buyer with a voidable title sells the goods to a third-party purchaser who makes a good-faith purchase for value? A) The purchaser gets voidable title. B) The purchaser gets void title. C) The purchaser gets good-faith title. D) The purchaser gets reclaimable title. E) The purchaser gets good title.

E) The purchaser gets good title.

Which of the following is required by the Magnuson-Moss Act when the seller issues a written warranty for a consumer good? A) The seller must provide an implied warranty of trade usage and an implied warranty of merchantability, but not other warranties, and must indicate as such. B) The seller must provide a warranty of merchantability, but no other warranties, and must indicate as such. C) The seller must provide a full warranty and must indicate as such. D) The seller must provide an implied warranty of trade usage, but no other warranties, and must indicate as such. E) The seller must indicate whether that warranty is a full warranty or a limited warranty.

E) The seller must indicate whether that warranty is a full warranty or a limited warranty.

FAS

Free alongside; The seller, at their expense, deliver the goods alongside the ship before the risk passes to the buyer.

Implied Warranty of Trade Usage

Generally accepted conditions for a product within a trade .

Implied Warranty of Merchantability

Goods are to work as generally expected when buying from a merchant

Articles 2 and 2A of the UCC

Governs sales/lease contracts

Negligence

If one fails to exercise the care of a competent, reasonable professional & that failure causes losses or injury to a client.

Trade Fixtures

Items attached to real estate that are used for business activities (goods under the UCC)

Title

Legal ownership but does not require possession

Punitive Damages

Meant to punish the defendant for extremely harmful conduct

3 Types of Accountant Liability

Negligence, Breach of Contract, Fraud

Typing Arrangement

Occurs when the holder issues a license only if the licensee agrees to buy some nonpatented product from the holder

Promissory Estoppel

Occurs when: 1) One party makes a promise & knows the other party will reasonably rely on it 2) The other party does reasonably rely on the promise 3) The only way to avoid injustice is to enforce the promise

Strict Product Liability

Plaintiff must prove that the product was defective when sold, the product was so defective that the product was unreasonably dangerous, and the product was the cause of the plaintiff's injury.

Substantial Impairment

Precludes a party from canceling a contract for trivial defects.

Course of Dealing

Previous commercial transactions between the same parties.

If terms are left open in a sales contract: Price: Payment: Delivery: Time: Duration Quantity:

Price: A "reasonable price" is determined Payment: Due at the time & place of delivery Delivery: The seller's place of business Time: Within a reasonable time Duration: To terminate, the party must use good faith & reasonable notification Quantity: Generally no basis for determining a remedy

Trademark Dilution

Prohibits the use of "distinctive" or "famous" trademarks even without showing consumer confusion

Patents

Protects a product, process, invention, etc

Copyright

Protects the expression of creative ideas (books, music, films, videos, etc)

Resale Equation

Resale Price - Contract Price + Resale Cost = Damages

Course of Performance

The history of dealings between the parties in the particular contract at issue.

Compensatory Damages

Those designed to make the plaintiff whole again. Medical bills, lost wages, and compensation for pain & suffering

Shipment Contract

Title changes hands to buyer at the time and place of shipment. Buyer bears the risk of loss during delivery. (if the contract is unspecified, shipment contract is assumed)

Destination Contract

Title changes once the shipment reaches its destination. Seller bears risk of loss during delivery.

Negligence Per Se

When a law establishes labeling, design or content requirements for products, the manufacturer has a duty to meet these requirements

Implied Warranty of Fitness for a Particular Purpose

When a sell knows: 1) Why the buyer is purchasing the goods in question 2) The buyer is relying on him to make the selection

Goods-in-bailment Contract

When purchased goods are in some kind of storage under the control of a 3rd party (warehouse)

Trademark

a distinctive name, symbol, word, picture, or combination of these that a company uses to identify products or services.

Common Carrier Delivery Contract

a type of contract in which purchased goods are delivered to the buyer via a common carrier, such as a trucking line

Warranties

assurances by one party that the other party can rely on its representations of fact

FOB

free on board. Selling price includes transportation costs & seller carries risk of loss until delivery.

Consequential Damages

includes damages for lost profits

Voidable Title

occurs when the contract between the original parties would be void but the goods have already been sold to a third party

Cross-licensing

occurs when two patent holders license each other to use their patents only on the condition that neither licenses anyone else to use his or her patent without the other's consent

The Perfect Tender Rule

requirement that the seller deliver the goods in conformity with the contract, down to the last detail

Uniform Commercial Code

the body of laws governing commercial transactions in the US.

Trade Dress

the image and overall appearance of a product

Sale on Approval Contract

the seller allows the buyer to take possession of the goods before deciding whether to complete the contract by making the purchase

Simple Delivery Contract

type of contract in which purchased goods are transferred to the buyer from the seller either at the time of the sale or at some time later by the seller's delivery

Design Defect

when all products of a particular design are defective and dangerous

Manufacturing Defect

when an individual product has a defect making it more dangerous than other identical products