Business Law Chapter 19 - Formation and terms of sales contracts

Passage of title

1. if seller is required to ship goods than title passes when the conforming goods are delivered 2. if seller is required to deliver the goods the title does not pass until goods are delivered and tendered to him 3. if delivery is made without moving goods title passes at time and place of contracting, unless represented by document (warehouse receipt) 4. if buyer rejects goods tendered to him title reverts to seller

Obtaining good title

1. person with voidable title to goods can pass good title to a bona fide purchaser 2. person who buys goods in the regular course of a retailer's business usually takes free of any interests in the goods the retailer has given to others 3. person who buys goods in the ordinary course of a dealer's business takes free of any claim of a person who entrusted those goods to the dealer

Exclusive dealing contracts

Code says sellers have an obligation to use their best efforts to supply the goods to the buyer and the buyers are obligated to use their best efforts to promote their sale

Time for performance

If no time for performance is stated then a reasonable time for performance is implied. Successive performance contract can be terminated if reasonable time to adjust to termination is given

Basic shit that applies to everything

Seller can cure nonconforming contracts. Reasonable amount of time for everything. Buyer can't repudiate if goods already set aside by seller.

Price Terms

a fixed price is not essential for a binding sales contract, but if the price is subject of dispute no contract is formed. (no "meeting of minds") If parties omitted the price term in formation of contract the Code supplies one.

transfers of voidable title

a seller who has voidable title has the power to pass good title to a good faith purchaser for value

no arrival no sale

expense and risk during shipment on seller. if goods fail to arrive at no fault of the seller the seller has no more liability to the buyer. seller can recover from shipping company

Sale or return

goods are delivered to a buyer for resale with the understanding that the buyer has the right to return them

Sales on approval

goods are delivered to the buyer with an understanding that he may use or test them for the purpose of determining whether he wishes to buy them

Output contract

one party is bound to sell its entire output and the other party is bound to buy

ex Ship

places expense and risk on seller until goods are unloaded from ship

CIF

price of the goods includes cost of shipping and insuring them. seller bears the expense and risk of loading goods.

Generally risk

risk of loss passes to buyer upon receipt of goods if seller is a merchant. If not a merchant risk passes upon tender of delivery.

FOB point of origin

seller deliver goods free of expense and seller takes risk at place designated

FAS

seller must deliver goods alongside the vessel

Sale on Consignment

the consignor must make sure that a sign indicating the consignor's intention is prominently posted as the place of business or make sure that the merchant's creditors know that he is generally in the business of selling goods owned by others

Needs contract

the quantity of the goods is based on the needs of the buyer.

FOB destination

the seller must at his own expense and risk transport the goods to that place and there tender delivery of them in the manner provided in this Article (Section 2-503)

FOB vessel

the seller must in addition at his own expense and risk load the goods on board. If the term is F.O.B. vessel the buyer must name the vessel and in an appropriate case the seller must comply with the provisions of this Article on the form of bill of lading (Section 2-323).

Sale of goods

transfer of ownership of tangible personal property in exchange for money, other goods or the performance of services

Lease of goods

transfer of the right to possess and use goods belonging to another. The rights of the lessee do not constitute pass of title or ownership of the goods.

FOB place of shipment

when the term is F.O.B. the place of shipment, the seller must at that place ship the goods in the manner provided in this Article (Section 2-504) and bear the expense and risk of putting them into the possession of the carrier