BLAW ch. 19

________ is a shipping term commonly used in maritime contracts and is normally accompanied by the name of a specific vessel and port.

Free Alongside Ship

What was the court's CONCLUSION (decision, holding) in the Capshaw v Hickman case?

Reversed for Hickman. Remanded back for factual determination as to why the car was left in the driveway.

What was the court's CONCLUSION (holding, decision) in the National Music Museum: America's Shrine to Music v Johnson case?

Affirmed. Nashville Music Museum had title to the guitar.

The UCC provides specific rules to place the risk of loss on the party who __________.

is best able to protect against the loss

In exclusive dealing contracts, buyers are obligated to use their best efforts to ________.

promote the sale of goods that are brought from sellers

Subject to the rule of good faith, the UCC allows the contracting parties to specify who has the _______ in their agreement [2-509(4)].

risk of loss

In the context of delivery without moving goods, in what ways does identification of goods occur?

The contract description of the goods Actions of the seller, such as marking the goods or setting aside

When faced with a contracts question, you first should ask whether the contract is for the sale of goods. If so, then ________ applies and if not, then ________ applies.

UCC Article 2 the common law

What was the main ISSUE (legal question) in the Zaretsky v. William Goldberg Diamond case?

Under the UCC was Khan classified a merchant for entrustment purposes?

In the context of physical delivery of goods, the general title rule of the UCC provides that title passes to the _____.

buyer when the seller has completely performed his or her duties

The UCC uses "gap fillers" in situations in which parties to sales contracts state terms in an indefinite or unclear manner or omit terms from their agreements. These gap filler provisions: _______.

fill in the blanks with common trade practices

A(n) ______ is not essential to the creation of a binding sales contract.

fixed price

According to the UCC, if a buyer has provided any consideration sufficient to support a simple contract, she has __________.

given value

Contracts that bind a buyer to purchase a seller's output of a certain item caused frequent problems under the common law because of the ________.

indefiniteness of the parties' obligations

If buyers have a(n) _________ in goods at the moment the goods are identified to the contract, they may protect their interest in the goods before they obtain title to them.

insurable interest

In the context of the sale of goods, an aspect of Article 2 of the Uniform Commercial Code is that _________.

it applies only to transactions in goods

According to the Uniform Commercial Code, a(n)________ regularly deals in the kind of goods being sold, or purports to have some special knowledge about the goods.

merchant

A person would have a voidable title if she ________.

obtained goods by impersonating another person

What RULE (law) did the court refer to in the Zaretsky v. William Goldberg Diamond case?

Entrustment applies to a person who is a merchant which includes the requirement that the person be one who "deals in" the relevant good. Goods entrusted to a merchant who deals in goods of that kind, can be transferred to a buyer in the ordinary course of business

What was the court's ANALYSIS (legal reasoning) in the National Music Museum: America's Shrine to Music v Johnson case?

Even though Moss verbally agreed to the guitar's display at the Rock n' Roll Museum, the contract required physical delivery of the guitar. February 12, 2008, contract between Moss and Johnson provided Moss would pay $50,000 "upon delivery" of the Martin D-35 guitar.

_________ is a shipping term that places the expense and risk on a seller until goods are unloaded from whatever ship is used.

Ex-Ship

________ is a shipping term that calls for a seller to deliver goods free of expense and at the seller's risk at the place designated.

Free on Board

What was the main ISSUE (legal question) in the Capshaw v Hickman case?

If defendant Hickman is not a merchant but the car remained in her driveway, who bears the risk of loss?

The law of sales of goods is codified in Article 2 of the ________.

Uniform Commercial Code

According to the UCC, when goods are being shipped by a professional carrier, a negotiable document of title serves as a contract between ________.

a seller and a shipper

Under the UCC, buyers in the ordinary course of business _________.

take goods free of any security interest in the goods that their seller may have given a third party.

According to the UCC, a 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

According to the UCC, if a contract contains a(n) _______ clause, the courts have the right to refuse to enforce the clause or contract.

unconscionable

Assume that Sharon, a retail shop owner, enters into a contract with a seller of cookies. The company supplies 100 boxes of cookies to Sharon each month through an agent. During a particular month, Sharon refuses to accept the delivered goods when she finds that the contractual specifications have been ignored. In this scenario title ________.

will automatically be revested in the seller of the cookies.

What was the court's CONCLUSION (holding, decision) in the Janke v Brooks case?

For Brooks. The contract at issue was predominantly one for services which is governed by common law-claims for UCC implied warranties are dismissed.

No ________ can be demanded or taken that is unreasonably disproportionate to any stated estimate in the contract or to normal prior _______ or requirements if no estimate is stated.

output quantity

The Uniform Commercial Code requires that ________.

parties to sales contracts act in a commercially reasonable manner and in good faith

All of the following would be examples of buyers in the ordinary course of business except: ______.

pawnbrokers

In a contract involving both goods and services, the courts commonly ask whether the sale of goods is the _________ of the transaction.

predominant part

When the parties' contract is silent about the time for performance, the UCC _______.

prompts the parties to a contract to perform within a reasonable time

Under UCC 2-509, subject to the ______, the contracting parties may specify who has the ______ in their agreement.

rule of good faith risk of loss

In the context of effect of breach on risk of loss, if a buyer rightfully revokes acceptance of goods, the risk of loss remains on the _________.

seller

Under the term FOB (free on board) destination, the goods are at the risk of the _______ during transit.

seller

Under the UCC's general title rule, if a contract merely requires the seller to ship goods, title passes to the buyer when the _______.

seller delivers the goods to the carrier

When a seller tenders goods that a buyer could lawfully reject because they do not conform to the contract description, the risk of loss remains on the ________.

seller until the defect is cured

The power to pass good title to a good faith purchaser for value is vested in a ________.

seller who has a voidable title

The common law placed the risk of loss on the party who __________.

tehnically had title at the time of the loss

When the delivery terms of a contract are FOB (free on board) or FAS (free alongside ship), ________.

the seller must make a reasonable contract for transportation of goods on behalf of buyer.

When a contract deals with identified goods that both parties at the time of contracting know are located someplace other than the seller's place of business, the place for delivery is ________.

the site of the goods

Sellers have an insurable interest in their goods for as long as _________

they have a security interest in the goods they have title to the goods

Three true statements that apply to sales contracts include: _______.

If an agreement gives either party the power to fix the price, that party must do so in good faith. No contract is created between the parties when the price has been disputed without any resolution. The Uniform Commercial Code says if the price term is simply omitted, the price will be what is reasonable at the time for delivery.

If the delivery of goods under the UCC's general title rule is to be made without moving the goods, title passes _______.

at the time and place of contracting

If the ___________ but no negotiable document of title has been used, the risk of loss passes when upon delivery of a negotiable document of title.

bailee indicates to a buyer that she has the right to the possession of the goods

If a buyer rejects tender of goods, title will _______.

be revested in sellers

A contract that causes frequent problems under the common law because of the indefiniteness of parties' obligations is the one that __________.

binds a buyer to purchase all of the buyer's requirements of a certain item

If goods are in the possession of a third-party bailee and are to be delivered without being moved, the risk of loss passes to the ________ upon delivery of a negotiable document of title for the goods.

buyer

If goods are entrusted to a merchant who deals in goods of that kind, the UCC mandates that the merchant has the power to transfer all rights of the entruster to a ________.

buyer in the ordinary course of business

Unless the parties to a contract agree on some other payment terms, payment for goods is due at the time and place at which the ________.

buyer is to receive the goods

If no special UCC rules apply and the seller is not a merchant, the risk of loss passes to the _________.

buyer when the seller tenders (offers) delivery of goods

What was the court's ANALYSIS (legal reasoning) in the Capshaw v Hickman case?

Understanding *why* the car remained in the driveway is central to determining who bears the risk of loss If Hickman tendered delivery, Capshaw bore the risk of loss; if Hickman did not tender delivery, the risk of loss remained with her.

Assume Platina is a shoe store in Texas and it enters into a contract with Tans Corp., a leather-goods manufacturer in Alabama, to deliver goods FOB (free on board) Alabama. The goods are shipped in a vessel named Leah. Assuming this scenario, _________.

Tans Corp. must deliver the goods at its expense to a carrier in Alabama.

Due to the indefinite nature of the parties' duties under the common law, _________ contracts were sources of difficulty.

exclusive dealing

A true statement about FOB (Free On Board) destination would be that it puts the _________.

expense and risk of delivering goods to a destination on a seller.

The UCC recognizes the fact _________ are used when parties to a sales contract omit terms from their agreements or state terms in an indefinite or unclear manner.

gap fillers

Under the UCC 1-201(9), _______ means honesty in fact in the transaction concerned or conduct.

good faith

If a contract requires delivery of goods by the seller, under the UCC's general title rule, title passes to the buyer when the _______.

goods are delivered and tendered to the buyer

A negotiable document of title ________.

identifies who has title and control of goods.

According to the UCC, unless the parties to a contract agree to the contrary, the goods ordered should be delivered ________.

in a single-lot shipment

A(n) ________ can pass good title to stolen goods even if the buyer is a buyer in the ordinary course of business. This is because the original owner did nothing to facilitate the transfer.

merchant-seller

What RULE (law) did the court refer to in the National Music Museum: America's Shrine to Music v Johnson case?

Unless parties agree otherwise, title passes to buyer at the time and place at which seller completes performance (delivery). 2-401(2) If delivery without movement of goods, title passes at time of contracting if goods identified and no title docs are to be delivered. 2-401(3)(B).

What was the court's CONCLUSION (holding, decision) in the Zaretsky v. William Goldberg Diamond case?

Reversed for WGDC. Inappropriate to shift the risk of loss to WGDC who had little reason to suspect that Khan would sell the diamond.

What RULE (law) did the court use in the Capshaw v Hickman case?

Risk of loss passes to buyer on receipt of the goods if the seller is a merchant; otherwise the risk passes to the buyer on tender of delivery A purchaser's performance under a contract generally is completed when the purchaser tenders the check. Tender means seller put conforming goods at the buyer's disposition and allowed the buyer to take delivery

What RULE (law) did the court use in the Janke v Brooks case?

The primary purpose of a contract is the predominant factor based on several factors including cost of goods vs total contract price When a contract is for both the sale of goods and performance of services, the controlling criterion should be the primary purpose of the contract

If no special rules under the UCC apply and a seller is a merchant, the risk of loss passes to __________.

a buyer on receipt of goods

For purposes of UCC Article 2, a merchant is defined as one of the following: _______.

a person who purports to have some special knowledge about the goods under contract a person who regularly sells the kind of goods under contract an agent of a merchant

Under the UCC, a person who buys goods in the regular course of a retailer's business _______.

usually takes free of any interests in the goods that the retailer has given to others