legal aspects: chapter 17

right of assurance

-Context: buyer has sense that seller may not meet certain demands of contract -Buyer has right to check-in to ensure seller is hitting certain milestones

Limitation of Remedies

-Exclusive type remedies - just replace goods -Limitation of liabilities - i.e., limitation of consequential damages

implied warranty

-automatic by law (unless specifically denied) -warranty of merchantability -warranty of fitness

unforeseeable contingencies (doctrine of commercial impracticability)

-exceptions to the perfect tender rule -Occurrences unforeseen by either party when a contract was made, may make performance commercially impractical -When this occurs, the rule of perfect tender no longer applies

express warranty

-not required -gives descriptions/ standards

Magnuson-Moss Act (1975)

-was designed to prevent deception in warranties by making them easier to understand. -Basically: No seller or lessor is required to give an express written warranty for consumer goods sold. However, if a seller or lessor chooses to make an express written warranty and the cost of the goods are more than $25, the warranty must be labeled as "full" or "limited." If the cost of the goods is more than $25, by FTC regulation, the warrantor must make certain disclosures fully and conspicuously in a single document in "readily understood language."

defenses to product liability

1. Assumption of risk (failure to heed a product recall) 2. Product misuse

warranties of title

1. Good title 2. No liens 3. No infringements

installment contract

A contract that requires or authorizes delivery in two or more separate lots to be accepted and paid for separately -Partial payments until fully paid/fulfilled

Anticipatory Repudiation

Seller knows they wont meet deadline so they try to minimize any possible damages

good title

Sellers warrant that they have good and valid title to the goods sold and that the transfer of the title is rightful

perfect tender rule

The legal right of the buyer or lessee of goods to insist on perfect tender by the seller or lessor. If the goods fail to conform to the contract, the buyer may accept part and reject part of the goods tendered

Implied Warranty of Fitness for a Particular Purpose

This arises when any seller or lessor (merchant or non-merchant) knows the particular purpose for which a buyer or lessee will use the goods and knows that the buyer or lessee is relying on the skill and judgment of the seller or lessor to select suitable goods. A "particular purpose" of the buyer or lessee differs from the "ordinary purpose for which goods are used" (merchantability)

Collection on Delivery (COD)

a method of collecting payment that requires customers to pay for goods at the time of delivery.

lien

a right to keep possession of property belonging to another person until a debt owed by that person is discharged.

tender of delivery

a seller's or lessor's act of placing conforming goods at the disposal of the buyer or lessee and giving the buyer or lessee whatever notification is reasonably necessary to enable the buyer or lessee to take delivery. must occur at a reasonable hour and in a reasonable manner

two or more warranties maybe made in?

a single transaction

Statute of Limitations

an action for breach of contract under the UCC must be commenced within 4 years after the cause of action accrues. buyer/lessee must file the lawsuit within 4 years after the breach occurs

warranty

an assurance by one party of the existence of a fact on which the other party can rely

product liability

any user of product can sue, not just the purchaser

no liens

encumbrances (burden), claim, changes or liabilities

No Infringements

free from copyright, trademark or potent claims of a third person

Implied Warranty of Merchantability

good that are merchantable are "reasonably fit for the ordinary purpose for which such goods are used." The goods must be of at least average, fair or medium level quality. They must be comparable to a level that will pass without objection in the trade or market for goods of the same description.

a buyer has right of?

inspection (Unless otherwise specified or COD, buyer has the right of inspection)

warranty disclaimers

manufacturer can disclaim implied warranties. ucc generally permits warranties to be disclaimed or limited by specific and unambiguous language, provided that the buyer/lessee is protected from surprise

strict liability

plaintiff doesn't have to prove negligence from manufactures, just has to prove correct usage

exclusive remedies

sole remedy (repairments and replacements ).

Partial Performance

sometimes an unforeseen event only partially affects the capacity of the seller or lessor to perform. -the seller or lessor can partially fulfill the contract but cannot tender total performance

all goods called for a contract must be tendered in a single delivery unless...

the parties have agreed that the goods may be delivered in several lots or installments