Chapter 19

Identification of goods

Distinguishing the goods covered in a contract from the seller's other goods. Title does not pass until goods are identified to the contract. Identification can be made at any time and in any manner agreed upon by the parties.

Seller in Breach

Seller retains risk of loss on the delivery of nonconforming goods to the buyer Risk of loss remains on the seller until the defect is cured or the buyer accepts the nonconforming goods.

Carrier Cases

Shipment contracts....

Louisiana

State that has not adopted the UCC

Contracts for the International Sale of Goods (CISG)

The CISG is a model act for international sales contracts

Sale on Approval

Customer is allowed to take possession of good for a trial period of time to see if it actually fits their needs

Insuring Goods against risk of loss

A party with an insurable interest in goods may purchase insurance to reimburse loss.

Fraudulently Obtained Goods

A seller or lessor has voidable title or boidable leasehold interest to goods obtained by Fraud, a bounced check, impersonation of another person

Delivery of goods without moving them

Buyer is required to pick up the goods from the seller. If the document of title or bill of lading is required the title passes when the seller delivers the document. If no document of title and goods are identified, the title passes at the time of contracting

Sale or Return

Buyer may return goods unsold after a period of time. Risk of loss and title pass to buyer when buyer has possession of goods. (common in retail books or retail music)

Bailment

Buyer receives negotiable document of title Bailee acknowledges buyer's right to possession Buyer receives a nonnegotiable document of title

Fob example

Contract says "FOB loading dock" Yarn is stolen at the dock so it depends on whether its point of shipment or point of destination.

Future Goods

Goods not yet in existence. Identified when the goods are shipped, market, or otherwise designated by the seller.

Transfer of Title

Has to be in good faith and of reasonable value (rolls royce for sale. Original owner still owns it because it was paid with a forged check)

Existing Goods

Identified when a contract is made and names the specific goods sold or leased

Stolen Goods

If a buyer has purchased goods from a thief, the real owner can reclaim the goods from the purchaser or lessee This is a VOID title

Entrustment Rule

If an owner entrusts possession of goods to a merchant that deals in goods of that type

No arrival, No sale

If the goods do not reach the buyer, the seller is under no obligation to replace the shipment

Title

Legal, tangible evidence of wonership of goods.

FOB (Free on board)

Most common shipment. Point of Shipment - seller responsible for goods until received at the common carrier Point of destination - Seller responsible for goods until arrive at destination

UCC Noncarrier Cases

No movement of goods

Purpose of CISG

Provides legal rules that govern the formation, performance, and enforcement of international sales contracts entered into between international businesses.

Buyer Breaches contract

Refuses delivery of conforming goods Repudiates the contract Breaches the contract Buyer bears the risk of loss for a commercially reasonable time

Nonmerchant seller

Risk of loss passes to buyer upon tender of delivery

Merchant seller

Risk of loss passes to buyer when buyer receives the goods

Finance Lease

Risk of loss passes to lessee

Nonconforming Goods

Risk of loss remains with the lessor or the supplier until cure or acceptance.

Ordinary Lease

Risk of loss retained by lessor

Ex-Ship

Seller bears expense and risk until the goods are unloaded at designated location

Consignment

Seller delivers goods to buyer to sell Cosignor paid a fee for selling goods on behalf of the cosignor IF they are sold. Only get money for the aid of selling if the item is sold.

CIF

Seller responsible for cost, insurance, and freight

Shipment Contract

The seller is required to make a proper shipping arrangements. Title passes when goods delivered to shipping carrier

Void Title

Thief acquires no title to goods he or she steals Buyer does not obtain good title to stolen goods Lessee has no leasehold interest in stolen goods Rightful owner can reclaim

Passage of title to goods

Title cannot pass until goods exist and have been identified. Title passes upon terms agreed to in contract. If no contrary terms are stated, title passes when delivery is completed.

Destination Contract

Title passes when seller delivers goods either to buyer's place of business (or other destination specified in the sales contract)

Common Law

places the risk of loss on the party who had the title

FAS (free alongside)

seller responsible goods until delivered alongside a vessel