CPA UCC2 - U.C.C. 2 CONTRACT FOR GOODS I. GENERAL COMMENTS...

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U.C.C. 2 CONTRACT FOR GOODS I. GENERAL COMMENTS UCC 2 is written to be read in conjunction with the common law (CL) rules of K. Article 2 carves some exceptions out of the CL rules & adds some new rules of its own, especially in the areas of title/risk of loss and product liability. Article 2 applies ONLY to Ks for GOODS . For non-goods Ks: (1) real property; (2) services; (3) intangibles (patents, copyrights, goodwill, stocks, bonds, etc.) the CL rules continue to apply. Furthermore, even in Ks for goods, if the K doesn’t fit the article 2 rules it is tossed back into the CL rules. Important to recall that article 2 in most instances relaxes the CL rules. II. DEFINITIONS 1. GOOD: a tangible, movable. Excludes real property, services, intangibles. 2. MERCHANT: A person who regularly deals with the type of goods being contracted for. Although UCC 2 applies to sales of goods between consumers as well as merchants, merchants are frequently subject to special rules. 3. SALE: transfer of title from Seller (S) to Buyer (B). III. DISTINCTIONS (Itemized on separate chart) IV. Although TITLE and RISK OF LOSS are independent of one another, the rules regarding transfer of each/both are similar. Distinctions are noted. A. SHIPPING TERMS 1. 2. FOB (free on board) shipping point (S’s location) results in T and R of L passing from S to B when S places goods in shipment/transit (Seller’s loading dock). 3. FOB destination point (B’s location) results in T and R of L passing from S to B when goods arrive at named destination . 4. C.I.F. (Cost, Insurance, & Freight) requires B to pay S the cost of the goods + the cost of insuring the goods + the cost of shipping the goods, ALL prior to shipment. (note: credit sales are precluded). S is req’d to insure goods AND place in transit . If S complies, T and R of L will pass when goods are placed in shipment . (Look for scenario where S fails to insure or underinsures). ** Always beware of scenarios w/non-conforming goods. 5. C.O.D. (Care on delivery) requires B to pay for goods upon delivery , which is when T and R of L will pass. NOTE: B does not lose right to inspect merely because payment must take place before inspection can occur. NOTE: requirement that B pay for goods prior to delivery does not eliminate
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This note was uploaded on 10/04/2011 for the course BUL 5332 taught by Professor Klintworth,n during the Fall '08 term at University of Central Florida.

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CPA UCC2 - U.C.C. 2 CONTRACT FOR GOODS I. GENERAL COMMENTS...

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