Legal Interest CH 21

CIF

Price includes in a lump sum Cost of goods, insurance and freight to the named destination

C & F

Price includes in a lump sum the cost of goods & freight, but not insurance.

Voidable title

A person with voidable title has power to transfer valid title for value to a good faith purchaser, generally called a BFP, bona fide purchaser.

BIOC

Buyer in ordinary course, one who acts in good faith, w/o knowing that the sale violates the owners rights. -protects innocent buyers -puts the risk on the person entrusting. -merchant who violates the owners rights is liable to that owner.

Uniform Commerical Code

focuses on basic fairness & sensible business practices

Ordinary Sales

generally permits a buyer in the ordinary course of business to take goods free and clear of a security interest.

Sale on Approval

in a sale on approval, the goods are not subject to the buyers creditors until the buyer accepts them.

Bailor

owns the goods legally held by another.

FOB place of shipment

- FREE ON BOARD, seller is obligated to put goods into the possession of the carrier at the place named. The seller bears the expense and risk until they are in the carriers possession. Then the risk becomes the buyers.

Insurable Interest

1. A buyer obtains an insurable interest when the goods are identified to the contract. 2. A sellers interest is different, retains an insurable interest in goods as long as she has either title to the goods or a security interest in them.

Breach 2-510

1. Seller Breaches goods are non conforming, buyer rejects. -risk remains with seller 2. Seller breaches, buyer accepts goods then revokes -Risk remains with Seller to the extent of buyers insurance is deficient 3. Buyer Breaches -Risk passes to buyer.

No Breach 2-509

1. contract requires Seller to ship goods by carrier - most cases risk pass to buyer 2. Contract requires a bailee to hold goods for Buyer -risk passes to buyer 3. Other Cases. -risk passes to buyer

Identification occurs according to these rules

1. description or ID number in contract 2. unborn animals @ conception crops @ planting. 3. marking or shipping indicates the exact goods going to buyer

Sale or Return

A buyer takes good intending to RESELL them but has the right to return them.

Interest

A legal right in something

ENTRUSTMENT

Any entrusting to a merchant who deals in goods of that kind gives him power to transfer all rights of the entrusted to a buyer in the ordinary course of business(BIOC)

BFP Bona Fide Purchaser

BFP, can prove he is a BFP by showing 2 things: 1) That he gave value for the goods 2) He acted in good faith.

Creditors rights

Financial stake in goods, the merchant is selling.

Title & Insurable Interest

How title passes from Seller to Buyer a) goods must exist before a title can pass. b) title to crops will not pass until it actually exists

Risk of Loss in Breach of contract

If parties have breached, the risk of loss generally lieu w/ breaching party

Passing of title.

May pass in any manner on which parties agree. 1.When the goods are being moved title passes to the buyer when the seller completes whatever transportation is obligated. 2. When goods are not moved & contract calls for delivery of ownership documents, seller delivers documents to buyer 3. Neither goods moved or ownership documents delivered: title passes when the parties form the contract.

Non-conforming goods

Merchandise that differs from that specified in the contract.

RISK OF LOSS

States that the parties may allocate the risk of loss anyway they wish. - parties must make their risk allocation clear, the code will enforce their terms. - Parties have not breached Risk passes from Seller to Buyer.

FAS a named vessel

The seller at his expense and risk must deliver the goods alongside the named vessel and obtain proper receipts.

FOB. Place of destination

The seller must deliver the goods at the place named and bears the expense and risk of shipping.

Title

Title may pass in any manner on which the parties agree.

Sale on approval

When a buyer takes goods intending to USE THEM herself but has the right to return them

Identification

a) goods must be identified to the contract before title can pass. b) agree how & when they will identify goods.

Bailee

temporary possession of another's goods.