Business Law ch 18 19 20 Cheeseman

The UCC statute of limitations

4 years

Buyer in the ordinary course of business

A buyer who, in good faith and without knowledge that the sale violates the ownership rights or security interest of a third party in the goods, purchases goods in the ordinary course of business from a person in the business of selling goods of that kind.

The perfect tender rule

A common law rule under which a seller was required to deliver to the buyer goods that conformed perfectly to the requirements stipulated in the sales contract. A tender of nonconforming goods would automatically constitute a breach of contract. Under the Uniform Commercial Code, the rule has been greatly modified.

Electronic Agent

A computer program or an electronic or other automated means used independently to initiate an action or respond to electronic records or performances in whole or in part, without review or action by an individual.

Unconscionable Contract or Clause

A contract or clause that is void because one party is forced to accept terms that are unfairly burdensome and that unfairly benefit the other party

Bailee

A holder of goods who is not a seller or a buyer (e.g., a warehouse).

Uniform commercial Code(UCC)

A model act that includes comprehensive laws that cover most aspects of commercial transactions is called

Good faith purchaser for value

A person to whom good title can be transferred from a person with voidable title. The real owner cannot reclaim goods from a good faith purchaser for value.

UCC Statute of Frauds

A rule that requires all contracts for the sale of goods costing $500 or more and lease contracts involving payments of $1,000 or more to be in writing.

Destination Contract

A sales contract that requires the seller to deliver the goods to the buyers place of business or another specified destination. Seller bears the risk of loss during transportation.

Lost Volume Seller

A seller who can recover lost profits from a defaulting buyer even though the seller sold the item to another buyer, where the seller has other similar items and would have made two sales had the original buyer not defaulted.

Merchant

A sporting goods dealer is considered a merchant for the goods sold in her store because she is a person who deals in the goods of the kind involved in the stores sales transaction and because, by her occupation, she holds herself out as having knowledge or skill peculiar to the goods involved in the transactions

Open Price Term

A term in a sales contract that says that if the contract does not contain a specific price then a "reasonable price" is implied at the time of delivery.

Open Delivery Term

A term in a sales contract that says that if the parties do not agree to the time, place, and manner of delivery of the goods, the place for delivery is the seller's place of business. If the seller does not have a place of business, delivery is to be made at the seller's residence.

Right to recover damages for accepted nonconforming goods

Allows a buyer or lessee to receive goods that are different from those specified in the contract and still recover any loss resulting from the sellers or lessors breach

Specific Performance

An equitable remedy in which the court orders the contract to be performed as agreed to by the parties.

Firm Offer Rule (UCC)

Says that a merchant who: 1)makes an offer to buy, sell, or lease goods and 2)assures the other party in a separate writing that the offer will be held open cannot revoke the offer for the time stated or, if no time is stated, for a reasonable time.. Tesla motors is liable to Sara for breach of contract under which of the following?

Consignment Contract

Seller delivers goods to a buyer to sell on his or her behalf.

Free Alongside Ship (FAS) port of shipment

Shipping terms that require the seller to deliver and tender the goods alongside the named vessel or on the dock designated and provided by the buyer.

Damages for Breach of Contract

Calculated as the difference between the contract price and the market price at the time and the place the goods were to be delivered.

If the buyer or lessee breaches the contract by rejecting or revoking acceptance of the goods, failing to pay for the goods, or repudiating all or any part of the contract, the seller or lessor has the right to ________.

Cancel the contract

Course of Performance

Considers the previous conduct of contracting parties concerning the contract in question

Battle of the Forms

Determining which version of a contract has precedence.

Letter of credit

Document that is issued by a bank on behalf of a buyer who purchases goods on credit from a seller that guarantees that if the buyer does not pay for the goods, then the bank will pay the seller.

Article 2A of the UCC

Establishes a comprehensive, uniform law covering the formation, performance, and default of leases in goods.

Article 2 of the UCC(uniform commercial code)

Governs the sale of goods

Right to recover damages for nondelivery or repudiation

If a seller or lessor fails to deliver the goods or repudiates the sales or lease contract, the buyer or lessee has the right to recover damages for nondelivery or repudiation.

Parol Evidence Rule

If a written contract is a complete and final statement of the parties' agreement, any prior or contemporaneous oral or written statements that alter, contradict, or are in addition to the terms of the written contract are inadmissible in court regarding a dispute over the contract

Which is NOT a basis for a seller or lessor to legally cancel a contract without being in breach themselves?

If the buyer or lessee breaches the contract by defaulting and the seller sold the item to another buyer but would have made two sales had the original buyer not defaulted.

Usage of Trade

If the parties did not have any prior course of performance or course of dealing that would indicate otherwise, __________ would be used to interpret the word "corn."

Which is NOT a situation in which a seller or lessor could recover the purchase price or rent stipulated in a sales or lease contract under the UCC?

If the seller or lessor completes the manufacture of the goods and resells, releases, or otherwise disposes of them to another party

United Nations Convention on Contracts for the International Sale of Goods

Is a model act for international sales contracts that provides legal rules that govern the formation, performance, and enforcement of international sales contracts entered into between international businesses.

Cost, Insurance, Freight (CIF)

Is a pricing term that means the price of goods included the cost of the goods and the costs of insurance and freight.

Electronic Record

Is a record that is created, generated, sent, communicated, received, or stored by electronic means

Insurable Interest

Is a requirement that a person who purchases insurance have a personal interest in the insured goods, property, or person.

Accomodation

Is a shipment of goods that is offered to a buyer as a replacement for the original shipment when the original shipment cannot be filled.

Free on Board (FOB) Place of destination

Is a shipment term that requires the seller to bear the expense and risk of loss of goods until the goods are tendered to the buyer at the place of destination.

Title

Legal, tangible evidence of ownership of goods.

Adequate Assurance of Performance

May be demanded in writing if one party to a contract has reasonable grounds to believe that the other party either will not or cannot perform his or her contractual obligations.

Sale on Approval

Occurs when a merchant allows a customer to take the goods for a specified period of time to see if they fit the customers needs.

Acceptance

Occurs when the buyer or lessee takes either of the following actions after a reasonable opportunity to inspect the goods: 1. Signifies to the seller or lessor in words or by conduct that the goods are conforming or that the buyer or lessee will take or retain the goods despite their nonconformity. 2. Fails to effectively reject the goods within a reasonable time after their delivery or tender by the seller or lessor.

Goods

Tangible items that are movable at the time of their identification to a contract

Manufactured goods

Tangible items that buyers and lessees order that are to be made to the buyers or lessees unique specifications

Open Payment Term

Term in a sales contract that says that if the parties do not agree to the time and place of payment, then payment is due at the time and place at which the buyer is to receive the goods.

Open assortment term

Term in a sales contract that says that if the variety of goods to a sales contract is left open, the buyer is given the option of choosing those goods buy must take the selection in good faith and within limits set by commercial reasonableness.

Free on Board (FOB) point of shipment

Requires the seller to arrange to ship the goods and put the goods in the carrier's possession. The buyer bears the shipping expense and risk of loss while the goods are in transit.

Ex-ship (from the carrying vessel)

Requires the seller to bear the expense and risk of loss until the goods are unloaded from the ship at its port of destination.

Sale or return contract

Requires the seller to deliver goods to a buyer with the understanding that the buyer may return them if they are not used or resold within a stated or reasonable period of time.

Shipment Contract

Requires the seller to send the goods to the buyer but not to a specifically named destination Via a common carrier

document of title

Paper exchanged in the regular course of business that evidences the right to possession of goods (for example, a bill of lading or a warehouse receipt).

The additional terms rule

Permits definite and timely expression of acceptance or written confirmation to operate as an acceptance even though the contract contains terms that are additional to or different from the offered terms, unless the acceptance is expressly conditional on assent to such terms.

Voidable Title

Results if a purchaser acquires goods through fraud, a check that is later dishonored, or impersonation of another person.

The UCC's written confirmation rule

Provides that if both parties to an oral sales or lease contract are merchants, the Statute of Frauds writing requirement can be satisfied if 1) One of the parties to an oral agreement sends a written confirmation of the sale or lease within a reasonable time after contracting And 2) The other merchant does not give written notice of an objection to the contract within 10 days after receiving the confirmation.

If a buyer or lessee repudiates a sales or lease contract or wrongfully rejects tendered goods, the seller or lessor has the right to

Recover damages for breach of contract

If a buyer or lessee makes partial or full payment for goods before they are received and the seller or lessor becomes insolvent within 10 days after receiving the first payment, the buyer or lessee has the right to ____________

Recover the goods from the insolvent seller or lessor

The usage of Trade

Refers to any practice or method of dealing that is regularly observed or adhered to in a place, a vocation, a trade, a profession, or an industry

Identification of goods

Refers to distinguishing the goods names in a contract from the sellers or lessors other goods.

The course of dealing

Refers to the conduct of contracting parties in prior transactions and contracts

Revocation of Acceptance

rescission of buyer's acceptance of the goods if nonconformity of the goods substantially impairs their value, provided that the acceptance was (1) premised on the assumption that the nonconformity would be cured by the seller and it was not, or (2) the nonconformity was an undiscovered hidden defect

Finance Lease

special type of lease transaction generally involving three parties: the lessor, the supplier, and the lessee

Future Goods

those goods which are not in existence at the time a contract is agreed to. the farmers cows and planted corn

Tender of Delivery

The obligation of a seller to transfer and deliver goods to the buyer or lessee in accordance with a sales or lease contract.

Right to Replevy (Recover) Goods

The right of a buyer or lessee to recover goods from a seller or lessor wh is wrongfully withholding the goods

Right to reclaim goods

The right of a seller or lessor to demand the return of goods from the buyer or lessee under specified situations.

Right to dispose of goods

The right of a seller or lessor to dispose of goods in a good faith and commercially reasonable manner. A seller or lessor who is in possession of goods at the time the buyer or lessee breaches or repudiates a contract may in good faith resell, release, or otherwise dispose of the goods in a commercially reasonable manner and recover damages, including incidental damages, from the buyer or lessee.

Right to stop delivery of goods in transit

The right of a seller or lessor to stop delivery of goods in transit if he or she learns of the buyer's or lessee's insolvency or if the buyer or lessee repudiates the contract, fails to make payment when due, or gives the seller or lessor some other right to withhold the goods.

The entrustment rule

The rule that entrusting goods to a merchant who deals in goods of that kind gives that merchant the power to transfer those goods and all rights to them to a buyer in the ordinary course of business.

Which of the following is NOT true about a buyers or lessees right to recover goods from an insolvent seller?

The seller or lessor must become insolvent within 15 days after receiving the first payment.

The right to inspect goods

a buyer's right to inspect and reject is not affected by a provision in the contract requiring payment on delivery

Conditional Sale

a sale with contract provisions that specify conditions that must be met by one of the parties

Void title

a situation in which a thief acquires no title to goods he or she steals

Liquidated Damages

damages that parties to a contract agree in advance should be paid if the contract is breached

Article 5 of the UCC

governs letters of credit