When crops are planted or otherwise become growing

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Fundamentals of Business Law Today: Summarized Cases
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Chapter 14 / Exercise 4
Fundamentals of Business Law Today: Summarized Cases
Miller
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when crops are planted or otherwise become growing crops or the young are conceived if the contract is for the sale of unborn young to be born within twelve months after contract or for the sale of corps to be harvested within twelve months or the next normal harvest seasons after contracting, whichever is longer. Thus if Very Fast Food Inc.’s purchasing agent looks at a new type of industrial sponge on Delta Sponge Makers’ store shelf for restaurant supplies, points to it, and says, “I’ll take it,” identification happens then, when the contract is made. But if the purchasing agent wants to purchase sponges for her fast-food restaurants, sees a sample on the shelf, and says, “I want a gross of those”—they come in boxes of one hundred each—identification won’t happen until one or the other of them chooses the gross of boxes of sponges out of the warehouse inventory. When Title Shifts Parties May Agree Assuming identification is done, when does title shift? The law begins with the premise that the agreement of the parties governs. Section 2-401(1) of the UCC says that, in general, “title to goods passes from the seller to the buyer in any manner and on any conditions explicitly agreed on by the parties.” Many companies specify in their written agreements at what moment the title will pass; here, for example,
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Fundamentals of Business Law Today: Summarized Cases
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Chapter 14 / Exercise 4
Fundamentals of Business Law Today: Summarized Cases
Miller
Expert Verified
Saylor URL: Saylor.org 402 is a clause that appears in sales contracts of Dow Chemical Company: “Title and risk of loss in all goods sold hereunder shall pass to Buyer upon Seller’s delivery to carrier at shipping point.” Thus Dow retains title to its goods only until it takes them to the carrier for transportation to the buyer. Because the UCC’s default position (further discussed later in this chapter) is that title shifts when the seller has completed delivery obligations, and because the parties may agree on delivery terms, they also may, by choosing those terms, effectively agree when title shifts (again, they also can agree using any other language they want). So it is appropriate to examine some delivery terms at this juncture. There are three possibilities: shipment contracts, destination contracts, and contracts where the goods are not to be moved. Shipment Contracts In a shipment contract , the seller’s obligation is to send the goods to the buyer, but not to a particular destination. The typical choices are set out in the UCC at Section 2-319: x F.O.B. [place of shipment] (the place from which the goods are to be shipped goes in the brackets, as in “F.O.B. Seattle”). F.O.B. means “free on board”; the seller’s obligation, according to Section 2- 504 of the UCC, is to put the goods into the possession of a carrier and make a reasonable contract for their transportation, to deliver any necessary documents so the buyer can take possession, and promptly notify the buyer of the shipment. x F.A.S. [named port ] (the name of the seaport from which the ship is carrying the goods goes in the brackets, as in “F.A.S. Long Beach”). F.A.S means “free alongside ship”; the seller’s obligation is to at

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