BLawTest3 - B USINESS LAW I REVIEW SHEET FOR EXAM #3 1....

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BUSINESS LAW I REVIEW SHEET FOR EXAM #3 1. What is the difference between a contract for the sale of goods and any other kind of contract? Other contracts are governed by Common Law while Contract for the sale of goods is governed by the UCC Section 2. 2. What is a sale or return contract and when do title and risk of loss pass from seller to buyer? Sale or Return – Type of contract by which the buyer purchases goods primarily for resale, but has the right to return part or all the goods in lieu of payments if the goods fail to be resold. It can be undone only within a specific time period. Title and Risk move to the buyer when the buyer receives possession of products. 3. What is a sale on approval contract and when do title and risk of loss pass from seller to buyer? Sale on Approval – occurs when the seller delivers the product to the buyer and given the opportunity to try it or use it to see whether the buyer wants to buy it. The risk of loss will go from the seller to the buyer if the buyer breaks the product and the seller can prove it was due to negligence. The title and risk remain with the seller until the buyer fully inspects and accepts the product. 4. What body of law governs contracts for the sale of goods? UCC Article 2 5. What body of law governs contracts for the lease of goods? UCC Article 2a 6. What are the rules regarding risk of loss - - - when the goods are not to be moved - - - when the goods are to be moved? What is the difference between a shipment
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contract (aka seller’s plant contract) and a delivery contract (aka destination contract or buyer’s plant contract)? How does a breach of contract alter the risk of loss rules? Risk of loss when the goods are not moved – Risk of loss is going to pass from the seller to the buyer, once the seller has executed everything that needs to be completed. Seller notifies the buyer the goods have arrived and ready to pack up. Risk of loss when goods are to be moved – Specific delivery terms in the contract can help determine when risk of loss passes to the buyer. Two types will help determine outcome: Shipment K and Delivery K Shipment K – Calls for seller to ship contract and seller makes a contract to carry. Then the seller physically delivers goods to the buyer through carrier. Seller has fully executed (means that while the goods are in transit the Buyer is at Risk of Loss. Buyer has to pay for the goods/owes the seller the $$ for goods) Delivery K – calls for seller to deliver goods presupposing delivery requires that seller delivers goods to buyer; if the goods are damaged while transit then seller has the Risk of Loss. If a person doesn’t specify which contract type then by default it will be a shipment K. 7. ABC Corporation, as seller, and XYZ Cprporation, as buyer, contracted for the
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This note was uploaded on 04/04/2011 for the course BLAW 3311 taught by Professor Boykin during the Spring '07 term at UT Arlington.

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BLawTest3 - B USINESS LAW I REVIEW SHEET FOR EXAM #3 1....

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