Presentation on theme: "Contracts for the Sale of Goods & Warranties Law A."— Presentation transcript:
Contracts for the Sale of Goods & Warranties Law A
The Sale and Lease of Goods Law of sales applies when ownership of goods is transferred from seller to buyer for consideration When a contract includes both goods and services, the dominant element of the contract determines whether it is a contract for goods or a contract for services
The Sale and Lease of Goods Special rules for sales include: 1.Contracts may result from the parties’ conduct 2.An offer may be accepted by any reasonable means 3.An acceptance may include terms that differ from those in the offer 4.The price need not be settled 5.Output and requirements contracts are allowed 6.Contracts may be modified without consideration 7.Firm offer – is a merchants written promise to hold an offer open for the sale of goods. If a time frame is not specified, there is a time limit of three months
The Sale and Lease of Goods Contracts for the sale of goods of $500 must be in writing Exceptions: Oral contracts between merchants Oral contracts for specially manufactured goods Admissions in court
Ownership and Risk of Loss Title is passed from a seller to a buyer after the goods have been identified The risk of loss is created when the contract is created Usually, title and risk pass at the same time
Ownership and Risk of Loss When a BUYER breaches a sales contract Cancel contract Withhold delivery Stop delivery Resell goods and bring a claim for any difference in cost When a SELLER breaches a sales contract Cancel contract Bring a claim for the return of money Cover the sale Revoke the acceptance
E-Commerce and the Law When shopping on the Internet Shop with companies you know Keep password private Pay by credit or use accounts such as PayPal Keep a record The federal law permits using E-sign on a contract if the parties agree Know your rights and protect your information
Express and Implied Warranties Warranty is another name for guarantee Oral or written statement about the quality, ability, or performance of a product Given by manufacturers or sellers Merchants must label warranties as either full or limited Full warranty promises to fix or replace a defective product at no extra cost to the consumer Limited warranty is any written warranty that does cover all that would be covered in a full warranty
Implied Warranties Guarantee of quality imposed by law Warranty of fitness for a particular purpose – is created when the seller knows the purpose for which the goods are needed Warranty of merchantability – the merchant warrants that the goods being sold are merchantable Usage of trade – providing documentation when involved in trading items of value Warranty of Title – seller warrants that the title being conveyed is good and legal
Consumer Protection Consumer is someone who buys or leases goods and services Unfair and deceptive Practice - is an act that misleads consumers Fraudulent Misrepresentation – any statement the deceives the buyer Convinced to purchase by persuasion Seller misstates the facts about something that is important to the consumer
False Advertising Bait and Switch Advertising Store advertises bargains that do not really exist Used to get customers in the door This practice is illegal Example: Irma was looking for a new Blue-ray player and saw one advertised on sale for $70. When Irma went to buy one, the clerk discouraged her by pointing out the player’s faults. Instead, he tried to sell her the player that cost $150.
Product Liability Product liability law states that someone who is injured from a product’s unsafe or defective condition may recover damages Strict liability – makes manufacturers or suppliers responsible for selling goods that are unreasonably dangerous EXAMPLE: Jackson leased a truck from Ryder Truck Rental. When he stopped at a traffic light, the brakes failed and Jackson hit the car in front of him. Meantime, the driver of the other car, was injured. The Delaware Supreme Court ruled that Ryder could be held liable, even without proof that the company was negligent.
POP QUIZ! Edwin Jones is a professional musician and is interested in buying a Carapoli violin. Carapoli offers in writing to make a violin for $22,000. When Jones wants to enforce the terms four months later, Carapoli refuses. Can Jones enforce Carapoli’s original offer? No. Although the offer is in writing, it exceeds the three-month time limit set by law.
POP QUIZ!! What is the difference between an express warranty and an implied warranty? Express: provided by the seller Implied: imposed by law