Chapter 21 Title Risk and Insurable Interest Identification For any interest to pass to buyer goods must be 1 Existence 2 Identified as specific goods in sales contract serial Gives buyer the right obtain insurance on goods receive damages from third party who damage the good Occurs goods are designated when contract is made Title can pass upon physical delivery agreed by the parties Shipment title passes at time and place of shipment Destination title passes when goods are tendered at the destination Sales or Leases by Non owners Void Title true owner gets goods back Voidable Title good faith purchaser keeps goods Case 21 1 Entrustment rule good faith purchaser keeps goods 3 Risk of Loss doesn t necessarily pass with title Important because of insurance concerns unless agreed otherwise ROL passes to buyer depending on whether delivery is with or without movement of goods Shipment contracts ROL passes to Buyer when tendered to carrier goods damaged in transit buyer s loss Destination Contracts ROL passes to Buyer when goods tendered at Destination Case 21 3 Bailment Temporary delivery of personal property w out passage of title into the care of another called bailee Sale on Approval Not sale it s Offer ROL passes when buyer approves expressly or implicitly Sale or Return Consignment is sale or return unless it complies with Art 9 ROL passes to buyer with possession ROL Breach of Contract breaching party bears ROL Seller s Breach Rejection risk stays with seller Revocation of acceptance risk passes back to seller when buyer s insurance doesn t cover loss Buyer s Breach Goods are identified risk passes to buyer for reasonable amount of time after 4 Insurable Interest seller knows the breach and when seller s insurance doesn t cover loss Buyer has an insurable interest in goods that have been identified But do they have a valid claim Seller has a insurable interest in goods if they retain title or a security interest Chapter 22 Performance and Breach of Sales and Lease Contracts Seller has a duty to tender delivery of conforming goods reasonable hour reasonable notice and reasonable manner Place of Delivery Non carriers Buyer picks up at Seller s place of business if Seller has no place of business then seller s residence Shipment contracts Seller has a duty to put goods into hands of independent carrier make contract for transportation obtain promptly deliver to the buyer any document necessary promptly notify buyer that shipment has been made Destination contracts Seller has duty to Tender the goods at a reasonable hour and hold conforming goods at Buyer s disposal for a reasonable period of time Perfect tender rule goods or tender delivery fail in any respect to conform the contract Buyer can accept goods reject entire shipment accept part and reject part Exceptions agreement of both parties that some defective goods will be acceptable cure parties agree defective goods could be fixed or replaced Seller has the right to cure ship conforming goods to buyer if agreed time of performance has not yet expired seller had reasonable ground buyer would accept non conforming goods i e buyer has accepted non conforming goods in the past Substitution of carriers Exception if a carrier becomes impracticable or unavailable through no fault of either party substitute is acceptable Installment contracts can be rejected if installment is substantially non conforming and can t be cured nonconforming installment substantially impairs the entire contract Exceptions occurrence of unforeseen contingency makes performance impracticable nonoccurrence was a basic assumption on which contract was made Case 22 1 More Exceptions Assurance and cooperation Right of Assurance in writing other party has right to suspend performance or delivery until received Duty of cooperation if a party is not cooperating other party has right to suspend performance 3 Obligations of the Buyer o Lessee Furnish facilities reasonably suited for receipt of the goods Make payment at the time and place the Buyer receives the goods By credit has to be prearranged credit period begins on date of shipment By cash credit card check If seller ask cash has to give buyer time to get cash Right to inspect Buyer has right to inspection before paying However COD CIF AND C F give Buyer no right to inspect Acceptance Buyer can accept goods by words or conduct If Buyer fail to reject in reasonable of time Revocation of Acceptance Notify Seller of breach Revoke only if substantial nonconformity 4 Anticipatory Repudiation party communicates he will not perform by time of contract performance Non breaching party may suspend performance and treat as material breach or wait a reasonable time Seller Goods in Possession of Seller Lessor Seller may withhold delivery of the goods if material breach by buyer if non material breach seller can withhold delivery of this instalment Seller can withhold delivery if Buyer is INSOLVENT Seller may rescind the contract Seller may sell raw materials for scrap to mitigate damages Seller may resell the goods right to recover damages market price at the time place of tender Seller goods in transit when seller has tendered goods to carrier Until Buyer is given negotiable document of title to goods Buyer is given non negotiable document of title Buyer has reasonable time to pick up goods Seller has right to stop goods in transit if buyer is insolvent or buyer is in breach Seller Goods in buyer s Possession Seller may sue for the purchase price When Seller can reclaim goods if insolvent buyer Buyer Seller refuses to Deliver goods Buyer wants goods specific performance or replevin Buyer doesn t want goods Rescind contract or cover or don t cover Buyer Seller delivers non conforming goods goods custom made cannot resell goods were destroyed risk has passed If Seller doesn t make perfect tender Buyer has right to reject all or part of goods Buyer must timely notify seller of rejection and reasons Buyer is entitled to commission for selling perishable goods Buyer may store the goods and retain and security interest in the good for his costs If Buyer has accepted non conforming goods she may sue for breach of warranty sue for ordinary damages sue to recover damages from purchase price 7 Additional Provisions Affecting Remedies Exclusive Remedies Consequential damages loss profits Lemon laws 8 Dealing with international sales Contracts CISG provides remedies similar to the UCC Article 74 provides money damages and
View Full Document
Unlocking...