1. Ownership and Risk of Loss in Sales or Goods Ownership and Risk of Loss in Sales or Goods Section 13.1

2. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Reviewing What You Learned 1. 1.When do you use the law of sales? Section 13.1 Assessment

3. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Reviewing What You Learned For the sale and lease of goods. Section 13.1 Assessment Answer

4. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Reviewing What You Learned 2. 2.What special rules apply to sales contracts? Section 13.1 Assessment

5. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Reviewing What You Learned Must be in good faith; may be supplemented with methods of dealing and usage of trade; may result from the parties’ conduct; offer may be accepted by any reasonable means; Section 13.1 Assessment Answer

6. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Reviewing What You Learned acceptance may include terms different than those in offer; consideration not required for firm offer; price need not be settled; out put and requirement contracts allowed; may be modified without consideration. Section 13.1 Assessment Answer

7. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Reviewing What You Learned 3. 3.When must sales contracts be in writing? What are the exceptions? Section 13.1 Assessment

8. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Reviewing What You Learned For sale of goods for $500. Exceptions: oral contracts between two merchants when a confirmation is sent and no objection made; oral contracts for specially manufactured goods; admissions in court; executed oral contracts. Section 13.1 Assessment Answer

9. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Reviewing What You Learned 4. 4.What are some rules for auctions and bulk sales? Section 13.1 Assessment

10. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Reviewing What You Learned In an auction with reserve, the auctioneer need not accept the highest bid. In an auction without reserve, the auctioneer must accept the highest bide. Section 13.1 Assessment Answer

11. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Reviewing What You Learned The UCC rules require that the buyer of bulk goods in a bulk transfer notify all of the seller’s creditors at least ten days before the transfer will take place. Section 13.1 Assessment Answer

12. Ownership and Risk of Loss in Sales or Goods Ownership and Risk of Loss in Sales or Goods Section 13.2

13. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods The right of ownership to goods is known as title. People who own goods have title to them. Title

14. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods A bill of sale is formal evidence of ownership. You receive this document when you buy goods. It only proves that you once had title, not that you still own the goods. Title

15. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Price Name and address of buyer and of seller Receipt Goods sold Elements of a Bill of Sale

16. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods WarrantyDate Signature of seller Elements of a Bill of Sale

17. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Anyone who obtains property as a result of another’s fraud, mistake, undue influence, or duress holds only voidable title to the goods. Voidable Title

18. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Voidable title means title that may be voided if the injured party elects to do so. Voidable Title

19. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods The UCC has a special rule that allows merchants who have no title to goods to pass on good title to their consumers. Buying from a Merchant

20. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods This occurs when you entrust your own goods to a merchant who sells them in the ordinary course of business. Buying from a Merchant

21. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods This gives consumers confidence that they will receive good title when buying from a merchant. This rule does not apply to stolen goods. Only the rightful owner has title to stolen property. Buying from a Merchant

22. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Sometimes it is necessary to determine who has title to goods—the seller or the buyer. Passage of Title and Risk of Loss

23. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Similarly, it is sometimes necessary to determine who must bear the risk of loss, or the responsibility for loss or damage to goods. Passage of Title and Risk of Loss

24. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods This is because goods may be stolen, damaged, or destroyed after the sales contract has been entered but before the transaction is completed. Passage of Title and Risk of Loss

25. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Title to goods cannot be transferred under a sales contract until the goods have been identified. Identified goods are goods that presently exist and that have been set aside for a contract. Passage of Title and Risk of Loss

26. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Goods that are not both existing and selected are known as future goods, such as crops not yet grown or items not yet manufactured. No one can have title to future goods. Passage of Title and Risk of Loss

27. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Ed Johnson goes to the Buy-a-Heap car dealership and buys a used car. Later, the police pull him over and tell him that the car was stolen.

28. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Assuming the police are correct, does Johnson have ownership of the car?

29. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods ANSWER No. Only the rightful owner has title to stolen property.

30. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods A shipment contract is one in which the seller turns the goods over to a carrier for delivery to a buyer. A carrier is a transportation company. Shipment Contract

31. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Both title and risk of loss pass to the buyer when the goods are given to the carrier. Shipment Contract

32. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods The term f.o.b., or free on board, means that goods will be delivered free to the designated place. The buyer must pay the freight charges from the shipping point to the destination. Shipment Contract

33. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods When a contract requires the seller to deliver the goods to a destination, it is a destination contract. Destination Contract

34. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Both title and risk of loss pass to the buyer when the seller leaves the goods at the place of destination. Destination Contract

35. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods When no delivery is required and the contract calls for the buyer to pick up the goods, title passes to the buyer when the contract is made. No Delivery

36. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods When goods are not to be shipped by carrier, the passage of risk of loss depends on whether the seller is a merchant or not. No Carrier

37. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods If the seller is a not a merchant, the risk of loss passes to the buyer when the seller delivers the product, or the seller offers to turn the goods over to the buyer. No Carrier

38. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods If the seller is a merchant, the risk of loss is transferred from the seller to the buyer when the buyer receives the goods. No Carrier

39. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Sometimes when you buy goods you receive a document of title, rather than the actual goods. Documents of Title

40. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods A bill of lading is a receipt for shipment of goods given by a transportation company, or carrier, to a shipper when the carrier accepts goods for shipment. Documents of Title

41. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods A warehouse receipt is a document given to a customer by the warehouse that is storing his or her goods. Documents of Title

42. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods The UCC prescribes specific remedies for both the buyer and the seller when there is a breach of a sales contract. Remedies for Breach of Sales Contract

43. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods 1.Cancel the contract. 2.Withhold delivery of goods. Seller’s Remedies

44. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods 3.Stop delivery of any goods that are still in the possession of the carrier. 4.Resell any goods that have been rightfully withheld. Seller’s Remedies

45. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods 5.Bring a claim against the buyer for the difference between the agreed price and the market price or for the price of any goods that were accepted by the buyer. Seller’s Remedies

46. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods 1.Cancel the contract. 2.Bring a claim against the seller for the return of any money that has been paid or for the difference between the agreed price and the market price. Buyer’s Remedies

47. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods 3.Refuse to accept the goods if they do not conform to the contract. 4.Cover the sale. Buyer’s Remedies

48. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods 5.Give notice to the seller that the goods have been accepted but that they do not conform to the contract. 6.Revoke the acceptance and return the goods. Buyer’s Remedies

49. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Reviewing What You Learned 1. 1.When does title pass from the seller to the buyer in a sales contract? When does the risk of loss pass? Section 13.2 Assessment

50. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Reviewing What You Learned Shipping contract: title and risk of loss pass to buyer when goods are given to carrier. Destination contract: title and risk of loss pass to buyer when goods reach destination. Section 13.2 Assessment Answer

51. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Reviewing What You Learned If buyer must pick up goods, title passes when contract is made. If seller is a merchant, risk of loss passes when buyer receives goods. If not, risk passes to buyer when seller tenders goods. Section 13.2 Assessment Answer

52. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Reviewing What You Learned 2. 2.What remedies are available when a seller breaches a sales contract? When a buyer breaches a contract? Section 13.2 Assessment

53. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Reviewing What You Learned When buyer breaches, seller may cancel contract, withhold delivery, stop delivery, resell goods and bring claim for difference between agreed prices and market price or bring claim for any goods that were accepted by buyer. Section 13.2 Assessment Answer

54. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Reviewing What You Learned When seller breaches, buyer may cancel contract, bring claim against seller for return of money paid or for difference between agreed and market price, Section 13.2 Assessment Answer

55. Understanding Business and Personal Law Ownership and Risk of Loss in Sales or Goods Section 13.2 Contracts for the Sale of Goods Reviewing What You Learned reject nonconforming goods, cover the sale, accept nonconforming goods and bring claim against seller if no adjustment is made, or revoke acceptance. Section 13.2 Assessment Answer

56. Ownership and Risk of Loss in Sales or Goods Ownership and Risk of Loss in Sales or Goods End of Section 13.2