COB 218 Chp. 14

when can items be reveoked/rejected after acceptance?

1. Acceptance was based on assumption that the nonconformity would be cured 2. the buyer/lessee couldn't have reasonably discovered the nonconformity of the goods in question.

policies of liability

1. consumers should be protected from unsafe products 2. Still liable even if person didn't purchase product. 3. Manufacturers are in a better position to bear costs than consumers dealing with injuries

unreasonably dangerous products

1. dangerous beyond expectations 2. manufacturer could have made it less dangerous alternatively can be unreasonable due to design or inadequate warning

What are the elements of a cause of action in strict product liability?

1. defective condition when sold 2. defendant normally sells this product 3. product is reasonably dangerous 4. person suffered harm from product 5. defect of product was proximate cause 6. good wasn't changed after sold

Seller has right to attempt a cure to nonconfirming goods when

1. delivery is rejected because the goods were nonconforming 2. Time for performance hasn't expired 3. Seller/lessor provides timely notice to the buyer or lessee of the intention to cure 4. The cure can be made within the contract time for performance

what can buyer/lessee recover from seller/lessor in sales contracts?

1. difference between cost of cover and contact price 2. incidental damages that resulted from the breach 3. consequential damages to compensate indirect loses

how buyers demonstrate acceptance

1. indicate conforming and that will keep them 2. buyer fails to reject goods within a reasonable period of time 3. sales contracts: buyer uses/resale of the goods

If time made of goods contract is indefinite, UCC goods contract is STILL acceptable when

1. parties intended to make a contract 2. There is a reasonably certain basis for the court to grant an appropriate remedy.

what can the non-breaching party do in the case of anticipatory repudiation

1. pursue a remedy 2. See if they will still perform contract 3. suspend performance

cover

A buyer or lessee's purchase on the open market of goods to substitute for those promised but never delivered by the seller. Under the Uniform Commercial Code, if the cost of cover exceeds the cost of the contract goods, the buyer or lessee can recover the difference, plus incidental and consequential damages.

perfect tender rule under common law

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.

firm offer

A merchant's written promise to hold an offer open for the sale of goods. A firm offer by a merchant must be in writing and must be signed by the offeror." I have a used 2014 Toyota RAV4 on the lot that I'll sell you for $22,000 any time between now and January 31."

implied warranty

A warranty that the law derives by implication or inference from the nature of the transaction or the relative situation or circumstances of the parties. the buyer must have relied on skill/judgment of seller types of implied warranty: merchantability, fitness for a particular purpose, prior dealings or trade custom

contract law statute of fraud requirements

All material terms must be included in the writing.

replevin

An action to recover specific goods in the hands of a party who is wrongfully withholding them from the other party.

Warranties implied from prior dealings or trade custom

Assumed from customs/past Example: if it is an industry-wide custom to lubricate new cars before they are delivered to buyers and a dealer fails to do so, the dealer is liable for damages resulting from the breach of an implied warranty.

Example where definition of a sale helps

Bob bought a bar from Claire. contract specifies different items, and makes a monthly payment plan installed. Both sign. Bob then purchases insurance on the bar. A few months later the bar catches on fire, bob has only paid half of the bar off. Who gets the insurance? Bob, because the definition of a sale is passing of title from the seller to the buyer for a price, the monthly installments. It passed to him the moments they signed and he started the first installment.

determining "materially altered" in additional terms

Contract is materially altered when unreasonable/hard for the offeror to complete

contract law contract terms

Contract must contain all material terms.

Under the UCC, if an offeree includes additional or different terms in an acceptance, will a contract result? If so, what happens to these terms?

Contracts including additional terms in acceptance is formed based on merchant status. non-merchant: contract is formed according to terms of original offer, doesn't include any additional terms. both merchants: additional terms automatically part of contract unless: original offer limits acceptance, contract is materially altered, or offeror objects within reasonable time period.

statue of fraud exceptions in sales law

Exceptions exist for 1. specially manufactured goods 2. admissions 3. partial performance.

conforming goods

Goods that conform to contract specifications.

place of delivery of goods

If not indicated, happen at: Seller's place of business, seller's residence, or location of the goods

additional provisions

In sales and lease contracts, an agreed-on remedy is in addition to those provided in the UCC unless the parties expressly agree that the remedy is exclusive of all others. If the parties state that a remedy is exclusive, then it is the sole (only) remedy.

contract law: acceptance

Mirror image rule applies. If additional terms are added in acceptance, counteroffer is created.

sales law contract modification

Modification does not require consideration.

contract law: irrevocable offers

Option contract Merchants concerning sale or lease of goods

payment under sale contract

When know specific agreements made: must be made when goods received. paid under credit? must make it in time of terms, begins at shipment dates. if demanding cash, reasonable time to get it.

lessee

acquires right of possession under a goods lease lessee leases goods FROM lessor!

who is a merchant? why are merchants important in sales contracts/article 2

article 2 has special standards for merchants merchants are people who... 1. works with goods/seller of goods of the kind involved in the sales contract merchant if candyman sells candy, not if he sells his computer 2. by occupation, holds themselves as having knowledge and skill for the goods involved in the transaction 3. employs a merchant as a broker, agent, or other intermediary

liability defenses for manufacturers

assumption of risk: knew risk created by defect, assumed risk even though unreasonable to do so product misuse: used for purpose not intended, must not be a use foreseeable by manufacturer comparative negligence: doesn't completely defend, both at fault because buyer misused product/ negligance/intentional actions commonly known dangers: no warning needed because it's just dangerous, knives, guns, should have known

breach of warranty

breach of sellers promise buyer can sue to recover damages/cancel agreement warranties include: title, express, implied

consumer leases

businesses leases goods to family

goods- personal property

cars, equipment.

misrepresentation

consumer is injured due to intentional mislabeling of packaged cosmetics, concealment of defects, etc... on a label, advertisement.

What happens if agreed delivery isn't available?

contract still okay, seller pays for alternative shipping

statutory law,sales law (*UCC articles 2 and 2a) controls...

contracts for the sale and lease of goods

sales contracts

contracts for the sale of goods doesn't include intangible property

general contract law controls...

contracts outside UCC, services + real estate

intangible property

corporate stocks and bonds, patents, copyrights etc... So not goods!

express warranty happens when seller indicates

declaring a statement about the product describing them showing sample of them making a statement of value or opinion isn't warranty. But of fact is.

lease agreements

defined in article 2a In regard to the lease of goods, an agreement in which one person (the lessor) agrees to transfer the right to the possession and use of property to another person (the lessee) in exchange for rental payments.

What remedies are available to a seller or lessor when the buyer or lessee breaches the contract?

depends on who has possession of the goods. Goods in buyers possession: seller can sue to recover price or lease payments due, and any damages breach occurs before goods delivered: right to cancel contract, withhold delivery, resell/dispose of the goods

measure of recovery for buyer

difference between contract price + market price of the goods when learned about breach can also recover damages

measure of recovery for lessee

difference between the lease payments and the lease payments that could be obtained for the goods at the time the lessee learned of the breach. Can also recover damages

puffery

expression of opinion

What does the UCC do when there are gaps in the contract (info not specified)

fill it in reasonably. Unless too many terms left open, not a contract. Quantity of goods must be stated.

title warranty types

good title, no liens, no infringements

Article 2 of UCC

governs sales of goods, applies to sales transaction between all buyers and sellers. requirements of sales contracts: agreement, consideration, capacity, and legality

negligence

happens when a person is injured by a product due to negligance in its production. Doesn't have to be the person who purchased it due to privity of contract.

General contract law controls contracts for the sale and lease of goods when...

in situations where UCC law was not modified, still common law.

nonconforming goods

items that do not meet standards and specifications of contract of goods

finance leases

lessor buys goods from supplier to lease to another

sales law and acceptance

made in any reasonable manner, any reasonable means offer defined as either a prompt promise to ship or by the prompt or current shipment of conforming or nonconforming goods. shipment of nonconforming goods is not accepted until the buyer agrees. Only acceptable if sold as accommodation, buyer informed because other selection is not in stock. Offer accepted by seller, but still needs to be accepted by buyer. If not informed, Breach of contract and able to sue.Contract formed only after buyer accepts.

types of product defects

manufacturing defects: when a manufacturer fails to assemble, test, or adequately check the quality of a product, differs from original design design defects: The product's design creates an unreasonable risk to the user a.harm could have been avoided with alternative design, product not reasonably safe because of design and reasonably preventable inadequate warnings: not enough instructions/no warning label. Harm could have been avoided with these and without them the product isn't reasonably safe. Plus harm that could happen from misuse (like eating cleaning fluids)

sales law: irrevocable offer:

merchants firm offer

contract law contract modification

modification requires consideration

sales law: obligations of seller/lessor

must deliver or tender delivery conforming goods

sales law statute of frauds, special rules for merchants in sales contracts

must have: oral agreement, written confirmation sent in reasonable time, and no objection within 10 days

proving a defective condition

must prove it was defective when it left seller and that this defect made it dangerous

Modifications made under UCC to perfect tender rule

nonconforming goods become acceptable if buyer still accepts the goods. Can reject entire shipment, or accept part.

cannot revoke/reject until...

notice given to seller, before goods have undergone substantial change. Can pursue remedies after revocation

sales law: obligations of buyer/lessee

obligated to accept and pay for according to contract terms

right to obtain specific performance

obtained when goods are unique and cannot just simply receive money as a remedy promised dog? get same dog promised art? get same art

sales contract: if the offeror is not notified within reasonable time that the offeree has accepted then...

offer expires

anticipatory repudiation

one party communicates to the other the intention not to perform

sales law contract terms

open terms are acceptable, if parties intended to form a contract, but the contract is not enforceable beyond quantity term.

UCC is only enforced when

parties disagree and bring to court

UCC's definition of a 'sale'

passing of title from the seller to the buyer for a price, important for determining cases if the goods are identified and no purchase date is specified, title passes at the time and place of contracting

What happens when unforeseen occurrences happen and unable to deliver on time/at all?

perfect tender rule doesn't apply. Notify buyer. Example: earthquake, fire, etc.. NOT an example: inflation. Has to be unforeseen.

tangible property

physical existence, can be touched or seen most tangible property applies to the sale of goods, except for real estate since it cannot be moved

purpose of remedy

put party in as good a position as if the other party had fully performed UCC remedies are cumulative, not limited to one exclusive remedy

Article 2a of UCC

requirements of lease contracts, leasing of goods. Basically a repetition of 2, but more specific to reflect differences between sales and leasing Covers lease agreements. Special rules for: consumer leases and finance leases

What remedies are available to a buyer or lessee if the seller or lessor breaches the contract?

right to cancel contract, right to obtain the goods on insolvency, right to obtain specific performance, right of cover, right to replevy goods, right to recover damages, right to reject the goods, revocation of acceptance, right to recover damages for accepted goods.

implied warranty of merchantability

sale of lease of goods made by a merchant Goods must be of at least average, fair, or medium-grade quality.

sales law state of frauds requirements

sales contracts priced at 500$ or more and lease contracts requiring total payments of 1000$ or more must be in writing/record to be enforceable writing must identify and describe the goods leased and lease terms.

tender of delivery

seller notifies buyer of item being available must be ready at reasonable hour and kept available for reasonable time to enable buyer to take possession

implied warranty of fitness for a particular purpose

seller/lessor (merchant or non-merchant) A warranty that goods sold or leased are fit for the particular purpose for which a buyer or lessee will use the goods. Difference between merchantibility and of fitness: ask for dark blue paint and get light blue. Still high quality, but not fit for particular use.

express warranty

seller/lessors promise to quality, description, performance of goods being sold/lease

statue of frauds

statute that, in order to prevent fraud through the use of perjured testimony, requires that certain kinds of transactions be evidenced in writing in order to be binding or enforceable.

What are goods?

tangible and movable.

when does the seller NOT have the right to cure nonconforming goods?

time expired. Unless has reasonable grounds to believe that conditions will be acceptable to buyer/lessee

good title

title warranty sellers promise they have valid title to goods sold and rightful transfer of title

no infringements

title warranty no copyright, trademark, patent claims of a third party

no liens

title warranty protects buyers and lessees unaware of titles seller may not have/security interests liens are: claims, charges, liabilities

Rights of buyer

to inspect goods and reject if nonconforming

lessor

transfers right of possession under a goods lease

UCC allows breaching party to retract his repudiation, true or false?

true

under the common law, the offeree doesn't need to notify the offeror of acceptance (true or false)

true

What implied warranties arise under UCC?

types of implied warranty: merchantability, fitness for a particular purpose, prior dealings or trade custom

duty of care

using good equipment, safe products, warning lavels, inspections, etc...

when do rules of who's in control vary?

when considering who was the merchant

Under the UCC, Can a goods/sales contract exist even if the moment of its making is undetermined?

yes