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Chapter_21_Notes_(Intro_to_Sales_and_Leases

Chapter_21_Notes_(Intro_to_Sales_and_Leases - picks up the...

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INTRODUCTION TO SALES AND LEASES (CHAPTER 21) I) Passage of Title A) Parties’ Agreement Dictates 1) Stipulation – does the contract say when the title passes? (a) If so, there is no question when the title passes. 2) No Stipulation: (a) Shipment Contract – title to the goods passes to the Buyer as soon as the Seller has made shipping arrangements and delivers the goods to the shipper (i) Stipulation? OR (ii) “Free On Board? (F.O.B) Seller’s Location OR (iii)Seller’s Responsibilities (A)“Seller will ship goods.” (b) Destination Contract – title to goods passes to the Buyer when Buyer receives the goods. (i) Stipulation? OR (ii) “F.O.B.” Buyer’s Location OR (iii)Is the seller guaranteeing delivery? (c) Buyer will pick up the goods from Seller or 3 rd Party (i) Title (A)When document of title is properly transferred to buyer (B) When the Seller completes their responsibilities (if there isn’t documentation of title) (ii) Risk of Loss (A)If the Seller is a merchant , risk of loss passes when the Buyer
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Unformatted text preview: picks up the goods (B) If the seller is NOT a merchant , risk of loss passes to the Buyer when the Seller “tenders” delivery (makes goods available and tells Buyer he can pick it up) II) Power to Transfer Title A) Types of Title 1) Good Title – own the goods outright and nobody can challenge ownership 2) Voidable Title – possess the goods, have some rights to them, but someone with a better claim can cancel your ownership 3) Void Title – posses the goods, but have no ownership in the goods (Stolen) B) General Rule – buyer doesn’t get a better title than what their seller had 1) Exceptions: (a) Seller with a voidable title can pass a good title to a good-faith purchaser, a person who didn’t know or have reason to know of the bad title, for market value (b) Entrustment Rule – if the owner entrusts possession to a merchant , the merchant can pass good title to a good-faith purchaser for value...
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