Blaw 5392 Exam 1 (Part 1)

The correct answer is that the seller bears the risk of loss until the goods reach the purchaser's loading dock. This is because when the contract stipulates "FOB purchaser's loading dock," it means that the seller is responsible for delivering the goods to the specified location. The risk of loss passes to the purchaser only after the goods have been delivered to their loading dock.

The warranty of title in the sale of goods provides that the seller must deliver the goods without any liens that the buyer was unaware of at the time of the contract. This means that the seller is responsible for ensuring that there are no legal claims or encumbrances on the goods that would prevent the buyer from obtaining clear ownership. This warranty applies regardless of whether the seller is a merchant or if the sale is made in writing and signed by the seller. It also cannot be disclaimed by the seller if the goods are sold to a bona fide purchaser for value.

In a sale or return contract, the buyer has the right to return the goods if they are unsatisfied. However, until the goods are returned, the buyer assumes the risk of any loss or damage that may occur to the goods. This means that if the goods are lost or damaged while in the possession of the buyer, they are responsible for the loss. Therefore, the correct answer is that the risk of loss for the goods passed to the buyer.

If Lace inadvertently ships the wrong appliances to Parco and Parco rejects them two days after receipt, title to the goods will revert to Lace when they are rejected by Parco. This is because under the Uniform Commercial Code (UCC), when goods are rejected by the buyer, the title to the goods goes back to the seller. In this case, Parco's rejection of the wrong appliances would trigger the reversion of title to Lace.

The agreement between Bass Electric Co. and Seymour Metal Wire Company is valid and enforceable because it states that Bass will buy its actual requirements of copper wiring for six months from Seymour Metal, and Seymour Metal has agreed to sell all the copper wiring Bass will require. This agreement shows a clear intention from both parties to enter into a contract and fulfill their obligations. Additionally, the agreement does not lack mutuality of obligation or consideration, as both parties have agreed to specific terms and conditions. Therefore, the agreement is valid and enforceable.

The contract's shipping terms are the most important factor in determining who bears the risk of loss in a sale of goods contract. The shipping terms typically outline the responsibilities and obligations of both the buyer and the seller regarding the transportation of the goods. These terms determine at what point the risk of loss transfers from the seller to the buyer. Therefore, understanding and agreeing upon the shipping terms in the contract is crucial in determining who ultimately bears the risk of loss.

The correct answer is that the warranty arises as a matter of law when the seller ordinarily sells the goods purchased. This means that when a merchant seller sells goods, there is an implied warranty of merchantability, which guarantees that the goods are fit for their ordinary purpose and are of at least average quality. This warranty does not need to be in writing, can be disclaimed, and does not require the buyer to rely on the seller's skill in selecting the goods. It is automatically implied by law when a merchant sells goods.

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An express warranty is created when the seller's description of the goods becomes part of the basis of the bargain. This means that the buyer relies on the seller's description when deciding to purchase the goods. In this case, factor I satisfies this requirement as the seller's description is considered in the sale. Factor II, on the other hand, does not result in an express warranty as it does not involve the seller's description of the goods. Therefore, the correct answer is I only.

The contract included specifications that stated the generator should have a 5,000 kilowatt capacity. This specification can be considered as an express warranty, which is a specific promise made by the seller about the product. The contract also had a disclaimer clause, but it did not effectively disclaim this express warranty. Therefore, the statement that the description language (5,000 kilowatt) contained in the specifications is an express warranty and has not been effectively disclaimed is correct.

Wally's assurance to Rita that the saw "would do the job" implies that the saw is capable of cutting down the trees in Rita's backyard. This creates an implied warranty that the saw is fit for the ordinary purposes for which it is used, specifically cutting down trees with an average diameter of five feet. Therefore, the correct answer is that the saw is capable of cutting the trees in Rita's backyard.

The correct answer is "Provides that the seller deliver the goods free from any lien of which the buyer lacked knowledge when the contract was made." This means that the seller is responsible for ensuring that the goods being sold are not subject to any liens or encumbrances that the buyer is unaware of at the time of the contract. The seller must deliver the goods without any legal claims or restrictions that could affect the buyer's ownership or possession of the goods. This warranty of title protects the buyer from any potential legal issues or disputes regarding the ownership of the goods.

The implied warranty of merchantability would result because Ram Industries, as a merchant, is selling goods in the ordinary course of business. This warranty ensures that the goods are reasonably fit for their ordinary purpose and of average quality. The implied warranty of title would also result because Ram Industries is selling goods and therefore implies that they have the right to sell them. The implied warranty of fitness for a particular purpose would not result in this situation because there is no indication that Handy Hardware communicated a particular purpose for the socket sets to Ram Industries.

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The correct answer is "Hold conforming goods and give the buyer whatever notification is reasonably necessary to enable the buyer to take delivery." This answer is correct because under the Sales Article of the UCC (Uniform Commercial Code), unless otherwise agreed to, the seller's obligation is to hold the goods that conform to the contract and provide the buyer with any necessary notification to facilitate the delivery of the goods. This means that the seller must keep the goods in their possession until the buyer is ready to take delivery and inform the buyer of any relevant information regarding the delivery process.

The weaver will win because this was an output contract. In an output contract, the seller agrees to sell all of their output to a particular buyer. The UCC recognizes output contracts as valid and enforceable, even if the price and quantity terms are omitted. Therefore, the rancher's refusal to deliver the wool constitutes a breach of contract, and the weaver is entitled to sue for damages.

In a sale on approval under the UCC Sales Article, the buyer has the option to return the goods after a trial period. During this trial period, the risk of loss for the goods remains with the seller. It is only after the buyer accepts the goods, indicating their intention to keep them, that the risk of loss transfers to the buyer. This means that if the goods are damaged or lost during the trial period, the seller is responsible for any losses.

The most important factor in deciding who bears the risk of loss between merchants when goods are destroyed during shipment is the agreement of the parties. This means that the merchants can come to a mutual understanding and determine who will be responsible for the loss. This agreement can be based on various factors such as the nature of the goods, the value of the goods, and the terms of their contract. The agreement of the parties allows for flexibility and customization in determining the allocation of risk in case of loss during shipment.

Under the given circumstances, Major bears the risk of loss because they shipped goods that did not meet the specifications of the contract. Although Major informed Bell about the mix-up and offered a discounted price for the fabric, the fact remains that they sent a shipment that did not conform to the agreed-upon terms. Therefore, Major is responsible for any loss or damage that may occur during transportation.

Quick bears the risk of loss during shipment because the contract states that the typewriters are to be shipped "FOB Union Suppliers, Inc. Loading Dock." FOB stands for "Free on Board," which means that the seller (Union) is responsible for the goods until they are delivered to the carrier (the common carrier in this case). Once the goods are delivered to the carrier, the risk of loss transfers to the buyer (Quick). Therefore, Quick is responsible for any loss or damage that may occur during shipment.

The risk of loss passed to Bond at Wool's tender of delivery. This means that once Wool delivered the painting to Bond, the risk of any damage or loss to the painting became Bond's responsibility. Even though Bond was unable to take possession of the painting immediately, the risk still transferred to him at the time of delivery.

The correct answer is that the auctioneer may withdraw the goods at any time prior to completion of the sale unless the goods are put up without reserve. This means that the auctioneer has the right to remove the goods from the auction before the sale is finalized, unless the goods are being sold without a minimum price. This gives the auctioneer flexibility in managing the auction and ensures that they can control the availability of the goods being sold.

Under the Sales Article of the UCC, before title to goods can pass from a seller to a buyer, the goods must be identified to the contract. This means that the specific goods that are being sold must be designated or specified in the contract. This is important because it ensures that both parties are clear on which goods are being transferred and avoids any confusion or disputes. It also allows for the buyer to inspect the goods and make sure they conform to the contract before accepting them.

According to the Sales Article of the UCC and the United Nations Convention for the International Sale of Goods (CISG), the risk of loss passes to the buyer when the goods are delivered to the first carrier for transmission to the buyer. This means that once the goods are in the possession of the carrier and are being transported to the buyer, the buyer assumes the risk of any loss or damage that may occur during transit. This is the default rule in the absence of any specific terms in the sales shipment contract.

In an FOB place of shipment contract, the risk of loss passes to the buyer when the goods are delivered to the carrier. This means that once the seller hands over the goods to the carrier, the buyer becomes responsible for any loss or damage that may occur during transit. The seller's responsibility ends once the goods are in the possession of the carrier, and from that point onwards, it is the buyer's responsibility to ensure the safe delivery of the goods to their destination.

The correct answer is Aston, because Wolfe had NOT yet taken possession of the table. Since the table was still in Aston's possession at the time of the fire, Aston bears the risk of loss. According to the principle of risk of loss, the party who has possession of the goods at the time of the loss is responsible for any damage or destruction. Since Wolfe had not yet taken possession of the table, he is not liable for the loss.

The agreement of the parties is the most important factor in determining who bears the risk of loss in a sale of goods contract. This is because the parties involved can negotiate and specify the terms and conditions regarding the transfer of risk in the contract. The shipping terms, who has title to the goods, and who has possession of the goods are all relevant factors, but they are secondary to the agreement of the parties.

Express warranties in a contract for the sale of goods are created when the seller includes a description of the goods as part of the basis of the contract. This means that if the seller provides a specific description of the goods being sold, and this description is relied upon by the buyer in entering into the contract, then the seller is warranting that the goods will conform to that description. This creates an express warranty, which is a guarantee by the seller that the goods meet certain standards or specifications.

The correct answer is II only. Under the UCC Sales Article, the implied warranty of merchantability requires the seller to be a merchant with respect to the goods being sold in order for the warranty to apply. This means that the seller must be someone who deals in goods of that kind, which ensures that the goods are fit for their ordinary purpose, are adequately packaged and labeled, and conform to any promises or affirmations made by the seller. On the other hand, the implied warranty of fitness for a particular purpose does not require the seller to be a merchant, as it applies when the seller knows or has reason to know of the buyer's particular purpose for the goods and that the buyer is relying on the seller's skill or judgment to select suitable goods.

The correct answer is that the seller's place of business is the proper place for delivery. In contracts, unless otherwise specified, the default rule is that the seller's place of business is considered the proper place for delivery. Since the contract failed to designate the place of delivery, the default rule applies in this case.

An express warranty is a guarantee or promise made by the seller regarding the quality, condition, or performance of the goods being sold. It can be created through statements, advertisements, or descriptions of the goods. In this case, a warranty of conformity of goods to sample means that the goods being sold will match the sample shown or provided to the buyer. This means that the buyer can expect the goods to be identical or similar to the sample in terms of quality, appearance, and specifications.

In a FOB (Free on Board) destination contract, the seller is obligated to deliver the goods to a specified destination. This means that the seller is responsible for arranging and covering the costs of transportation to the agreed-upon location. The buyer does not need to pick up the goods; instead, the seller must ensure that the goods are delivered to the specified destination. This ensures that the seller bears the risk of loss or damage to the goods until they are delivered to the buyer's chosen location.

In a sale or return contract under the Sales Article of the UCC, the correct statement regarding risk of loss and title to the goods is that title and risk of loss rest with the buyer until the goods are returned to the seller. This means that the buyer is responsible for any damage or loss that occurs to the goods during the period they have possession of them. The seller retains ownership of the goods until they are returned, at which point the title and risk of loss transfer back to the seller.

The correct answer is "Statements made by the seller became part of the basis of the bargain." This means that for an express warranty to be created, the statements made by the seller must have influenced the buyer's decision to enter into the contract. In other words, the buyer relied on the seller's statements when making the purchase. This is an important factor because it shows that the seller made specific promises or guarantees about the product, which can be legally enforceable.

CIF stands for Cost, Insurance, and Freight. In a contract for the sale of goods, if the term CIF is used, it means that the price includes the cost of the goods, the cost of freight, and the cost of insurance. This means that the seller is responsible for arranging and paying for the transportation and insurance of the goods to the agreed-upon destination. The buyer is only responsible for the payment of the goods themselves, as the price already includes the freight and insurance costs.

The answer "The time for shipment is within a reasonable time" is correct because when a contract does not specify a shipment or delivery date, the Uniform Commercial Code (UCC) provides that the goods must be shipped within a reasonable time. What constitutes a "reasonable time" may vary depending on the circumstances of the contract, such as the nature of the goods, industry practices, and any prior agreements or course of dealing between the parties. Therefore, without a specific timeframe mentioned in the contract, the default rule is that the goods should be shipped within a reasonable time.

The passage states that Mara offered to assign the contract to Sands Oil Company, and Sands agreed. This means that Mara has effectively transferred its rights and delegated its duties under the contract to Sands. Therefore, the correct answer is that Mara has effectively assigned to Sands its rights and delegated its duties under the terms of the contract with Gotham.

Pulse has title and an insurable interest because they owned the goods and had the right to transfer ownership to Star. Even though the goods were destroyed in the fire, Pulse still had the right to be compensated for their loss through insurance because they had an insurable interest in the goods. Star also had title to the goods, but they did not have an insurable interest since they did not own the goods at the time of the fire.

The UCC implies a warranty of merchantability to protect buyers of goods. This warranty does not require the goods to be fit for all purposes for which the buyer intends to use them. The warranty ensures that the goods are adequately packaged and labeled, sold by a merchant, and in conformity with any promises or affirmations of fact made on the container or label.

Ram's shipment is an acceptance of Handy's offer because Ram shipped the requested Model A-X socket sets to Handy without any explanation. This indicates that Ram intended to fulfill the order as specified in Handy's purchase order. The terms of the purchase order, including the delivery date and the quantity of sets, were met by Ram's shipment, confirming their acceptance of Handy's offer.

The contract did not specify the time for payment, place of delivery, or Peters' right to inspect the computer. Therefore, Peters has the right to inspect the computer before making the payment.

The contract between Martin and Wilberforce Oil Company is enforceable despite the uncertainty in the price. The contract states that the price will be determined based on the refinery price on the delivery date. While this introduces some degree of uncertainty, it does not render the contract unenforceable. The parties have agreed on the method of determining the price, and as long as it is determined in accordance with this agreed-upon method, the contract remains valid.

The correct answer is Lace's revocation was ineffective because the offer could NOT be revoked before June 1. This is because the offer clearly stated that it would not be withdrawn before June 1. Therefore, Lace's attempt to revoke the offer on May 25 was not valid and the offer remained open.

If the parts were nonconforming, Cey will bear the risk of loss, even though the contract was a shipment contract. This means that even though Deck had the right to reject the nonconforming parts, the risk of loss still remains with Cey until they take possession of the parts. Therefore, in this situation, Cey would be responsible for the loss caused by the fire in Deck's warehouse.

If Barr has not returned the copier or indicated acceptance of it within the 30-day period, the risk of loss and title remain with Sand Corp. This means that Sand Corp. is still responsible for any damage or loss that may occur to the copier during this time, and they still retain ownership of the copier. Barr does not assume any responsibility or ownership until they either return the copier or indicate acceptance of it.

The most important factor in resolving the dispute between the two merchants is the fact that a breach has occurred. This means that one of the parties involved has failed to fulfill their obligations under the contract, which can have implications for determining who bears the risk of loss. The breach may affect the legal rights and responsibilities of the parties involved, and can impact the resolution of the dispute. The other factors mentioned, such as who has title to the goods, the shipping terms, and the credit terms, may also be relevant in determining the outcome, but the fact of a breach is likely to be the most significant factor.

The correct answer is I only. This is because in order for the warranty of merchantability to arise, the seller must be a merchant with respect to the goods of that kind. The warranty does not need to be in writing, and the buyer's reliance on the seller's skill or judgment is not necessary for the warranty to arise.

Under the Sales Article of the UCC, an auctioneer may withdraw the goods put up for sale if no bid is made within a reasonable time. This means that if there are no bids made within a reasonable timeframe, the auctioneer has the right to withdraw the goods from the sale. However, once the auctioneer announces completion of the sale, they are not allowed to withdraw the goods. Therefore, the correct answer is II only.

The correct answer is "Purchasing goods which had been previously stolen from Donnegal." This means that if Variance purchased goods that were stolen from Donnegal, then Donnegal would be entitled to the goods. This suggests that the claim made by Donnegal is based on the fact that the goods were stolen from them and subsequently purchased by Variance.

The term FOB (Free On Board) the place of shipment in a sales contract means that the seller is responsible for both the risk and expense associated with delivering the goods to the carrier for shipment. This means that the seller is responsible for any damage or loss that may occur during transit, as well as the costs involved in preparing and transporting the goods to the carrier. The buyer is not responsible for either the risk or the expense in this scenario.