Business Law with UCC Applications,13e

Sales Contracts: Formation, Title, and Risk of Loss

Chapter 13

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

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Learning Objectives

1. Define the term goods and explain the nature of a sale.

2. Explain how Article 2 of the UCC applies to contractual relationships.

3. Explain the UCC rules that relate to written contracts.

4. Explain the two laws related to cyber-sales contracts.

5. Contrast an auction with reserve with an auction without reserve.

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Learning Objectives (cont.)

6. Explain title, void title, and voidable title.7. Determine when title of goods passes

from seller to buyer.8. Decide when the buyer or seller must

bear the risk of loss.9. Compare a sale on approval with a sale

or return.10.Define an insurable interest.

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Sales Contracts: Formation, Title, and Risk of Loss

• The Sale and Lease of Goods– Sales of Goods – Leases of Goods – Goods and Services

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Sales Contracts: Formation, Title, and Risk of Loss

• Rules for Sales Contracts– Good Faith, Course of Dealings, and Usage of

Trade – Formation of a Sales Contract

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Sales Contracts: Formation, Title, and Risk of Loss

• Formation of a Sales Contract– Offer and acceptance– Firm offer– Open-price terms– Output and requirements terms– Additional terms in acceptance– Modification

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Sales Contracts: Formation, Title, and Risk of Loss

• The Form of a Sales Contract– The Written Sales Contract – Cyber-Sales Contracts – International Law – Auction Sales and Cyber-Auction Fraud

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Sales Contracts: Formation, Title, and Risk of Loss

• The Written Sales Contract– Exceptions to the general rule– Oral contracts between merchants– Specially manufactured goods– Admissions in court– Executed contracts– Requirements of writing– Signature requirements

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Sales Contracts: Formation, Title, and Risk of Loss

• Cyber-Sales Contracts– The E-Sign Act– The Uniform Electronic Transactions Act

(UETA)

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Sales Contracts: Formation, Title, and Risk of Loss

• Title, Passage of Title, and Risk of Loss– Valid Title, Void Title, and Voidable Title – Passage of Title and Risk of Loss

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Sales Contracts: Formation, Title, and Risk of Loss

• Valid Title, Void Title, and Voidable Title– Entrusting goods to a merchant

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Sales Contracts: Formation, Title, and Risk of Loss

• Passage of Title and Risk of Loss– Shipment contracts– Destination contracts– No delivery required– Fungible goods– Documents of title– Agreement of the parties– Revesting of title in seller– International sales

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Sales Contracts: Formation, Title, and Risk of Loss

• Sales, Returns, and Insurable Interest– Sale on Approval – Sale or Return – Insurable Interest