Chapter 2- Sales

Existing and Future Goods

Existing goods are those owned by the seller currently. Future goods are those to be acquired or produced by the seller. There cannot be a present sale of future goods; an attempt to make such a sale is characterized as a contract to sell in the future.

Fungible Goods

Fungible goods are goods so characterized that a unit of them is by nature, or by trade usage, considered to be equivalent to any other like unit. For example, oil in storage tanks and wheat in a storage silo are fungible goods.

Goods

In general, all things moveable at the time of identification to the contract for sale. Included within the definition of goods are: unborn young of animals and growing crops and other identified things attached to realty that can be severed without harm. Excluded from the definition of goods are: money for payment of the purchase price, investment securities, intangible personal property such as accounts receivable, commercial paper, and partnership interests.

Merchant

One who either deals in goods similar to the ones involved in the transaction or who, by occupation, represents that s/he has particular knowledge or skill relating to the practices or goods involved in the transaction.

Gift

Present transfer of ownership, requiring delivery but not consideration. On the other hand, sales require consideration but not delivery.

Bailment

Present transfer of possession of personal property (but not ownership) for a particular purpose

Contract for Sale

Sale accomplished by the making of the contract (present sale of goods) or an agreement to sell goods at a future time

Identification

The buyer obtains a special property right and an insurable interest in goods that are existing and identified.

Tender

The requirement that the seller put and hold conforming goods at the buyer's disposition and give the buyer any notification reasonably necessary to take delivery.

Cover

The right of the buyer, after a breach by the seller, to buy substitute goods

Sale

The transfer of ownership of personal property for a price (consideration)

In the absence of an explicit agreement, identification occurs:

1. When the contract is made and the goods already exist and are referred to in the sales contract. 2. When the goods are shipped, marked, or otherwise designated by the seller as goods to which the contract refers and the contract is for the sale of future goods. 3. When crops are planted or when young are conceived

Condition Precedent

A condition that must be fulfilled before the agreement's promises or covenants are binding on the other party.

Condition Subsequent

A condition, the performance or occurrence of which causes the agreement's promises or covenants to cease being binding on one or both parties.

Firm Offer

A firm offer is a signed written offer by a merchant to buy or sell goods in which the merchant gives assurance that the offer will be held open. Such an offer will be irrevocable (even though it is not supported by consideration) for the time stated or for a reasonable time. However, in no event may this time period be longer than three months. Finally, any such term of assurance made on a form supplied by the offeree (party to whom offer is made) must be signed separately by the offeror (party making the offer)