Rights of Creditors, Owners, and Purchasers:Secured Transactions-Casebook problems

Rights of Creditors, Owners, and Purchasers:Secured Transactions-Casebook problems

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Secured Transactions Casebook Problems Page 1 of 39 PART I Rights of Creditors, Owners, and Purchasers . Seller's power over goods as against buyer. Pp. 17-24 Problems 1.2.1-1.2.8. THE RIGHT TO WITHHOLD DELIVERY Problem 1.2.1 , pg.18 The rights of parties are irrespective of statements they make about “title.” Title to goods passes form the seller to the buyer in any manner and on any conditions explicitly agreed on by the parties. 2-401(1). In order for us to know when “title” passed, we must know what the contract says. Unless otherwise agreed tender of payment is a condition to the seller’s duty to tender and complete any delivery. 2-511(1). Here, the parties did in fact contract to have the Buyer tender payment on Jan 30. When the buyer fails to make a payment due on or before delivery, then the aggrieved seller may withhold delivery of such goods. 2- 703(a). The seller may resell the goods concerned. Where the resale is made in good faith and in a commercially reasonable manner the seller may recover the difference btwn the resale price and the contract price together with any incidental damages allowed, but less expenses saved in consequence of the buyer’s breach. 9-706(1). Problem 1.2.2. Seller has the right to request from the debtor an adequate assurance of performance. 2-609. When reasonable grounds for insecurity arise w/ respect to the performance of either party the other may in writing demand adequate assurance of due performance and until he receives such assurance may if commercially reasonable suspend any performance for which he has not already received the agreed return. 2-609(1). Whether the Seller has reasonable grounds to feel insecure is based on a standard of reasonableness. Seller must communicate his concerns in writing with the buyer. This written request for adequate assurance forces the parties into negotiation. After receipt of a justified demand, failure to provide w/in a reasonable time not exceeding 30 days such assurance of due performance as is adequate under the circumstances of the particular case is a repudiation of the contract. 2-609(4). Parties may debate on what is “a reasonable time” and what constitutes “adequate” “assurance of due performance.” THE RIGHT TO STOP DELIVERY Problem 1.2.3. (The Right to Stop Delivery—Generally) In a traditional sale, Seller, at seller’s place of business, allows the buyer to purchase and take away the good. The most common sales entail goods having to travel between the seller and buyer. In this case, the goods would be handled by a third party—common carrier. The rights of buyer/seller are governed by art. 2, but the rights and obligations of the carrier are governed by art. 7. Non-negotiable Bill of lading
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Secured Transactions Casebook Problems Page 2 of 39 tells you the carrier’s obligations and Art. 7 tells the parties if they have the power to stop the truck (common carrier). Example: Federal Express
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Rights of Creditors, Owners, and Purchasers:Secured Transactions-Casebook problems

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