Sales Contracts

The Law of Sales Applies to tangible, movable, personal property Example Real Estate Goods (clothing, books, automobiles, pets, etc)

Payment When the buyer delivers the agreed price and the seller accepts it

Receipt of Goods The buyer takes physical possession of the goods Also known as Delivery Title of all property is transferred to the buyer

When Does Ownership Transfer?

If the seller is to deliver the goods to their destination Title transfers when the goods arrive at the buyer’s specified destination

If the seller is to ship, but not deliver, the goods to their destination Title passes to the buyer when the goods are delivered to the carrier

Cash, Check or Credit Sales Title transfers at the time and place when the sales contract is made

Collect on Delivery (COD) Sales The seller obtains title, control, and possession of the goods until the items are paid for

Sale on Approval “Trial Offers” Sellers keep the title and ownership rights until the buyer approves of the product. The buyer is liable for any damage to the goods due to negligence

Auctions Title passes when the money is exchanged With Reserve The auctioneer may withdrawal the goods at anytime before announcing completion of the sale Without Reserve The goods will be sold to the highest bidder regardless of price

Statement to assure the product’s qualities or performance Warranties Statement to assure the product’s qualities or performance

Expressed Warranty Made explicitly by the seller Example: May be spoken or written Example: A car salesperson stating that the car you are purchasing will not need an oil change for 50,000 miles Warning: Make sure the person is not just puffing to make a sale (being vague)

Full Warranty Expressed warranty that obligates the seller to repair or replace a defective product without cost to the buyer and within a reasonable time

Limited Warranty Provides less protection than a full warranty The seller must identify what it will cover

Implied Warranty An implicit, unstated warranty obligation imposed on all sellers in order to ensure minimal standards Example: The food you buy is fit for human consumption You new MP3 player will work when you use it for the first time

Exclusion of Warranties Must be stated that no warranty is included Seller must refrain from making any expressed warranties

Product Liability If goods are defective and dangerous the producer, manufacturer, suppliers, and sellers may all held responsible for any injuries

Purchasing Products

Uniform Commercial Code (UCC) A standard set of business laws regulating the sale of goods nationwide

Agencies Who Help Regulate the UCC

Consumer Product Safety Commission (CPSC) Has authority over most consumer goods Receives reports on unsafe products. It can order: Recall Repair Replacement Refund Ban from marketplace Fines/imprisonment of offenders

Food and Drug Administration (FDA) Regulates drugs, cosmetics, and food Determines Adulterated products Products that do not meet minimum standards

FDA REQUIRES Products be made with ingredients fit for human consumption Product Labels Include Manufacture's Name Address of the manufacturer, packagers, or distributor Reveal the quantity included in the package Uniform nutritional labeling

FDA Requirements Drug be inspected and followed for safety and approval for sale either by prescription or over-the-counter

US Department of Agriculture (USDA) Inspects meats and meat processing plants Ensures products are free from disease Check for sanitation

National Bureau of Standards Fixes standards of weights and measures for Gasoline pumps, Supermarket scales, Taxicab meters, etc. Violations are punishable by fine, imprisonment, and confiscation of goods

The Federal Trade Commission (FTC) Protects against any methods of business that are dishonest, fraudulent, or limit competition For Example:

Making Agreements to Control or Fix Prices Illegal to conspire to set prices

Using False Or Misleading Advertising Bait and Switch advertising a nonexistent bargain to lure customers and then selling the customers ore expensive merchandise

Conducting Illegal Lotteries A business can not use any gambling scheme or game that Requires payment of money to participate to promote sales

Using Unfair Pricing Methods Most common illegal activity Examples Saying price is wholesale when it is not Artificial Two-for-one Deals Loss Leaders Advertising a popular item at less than cost to get customers in, and then charging higher prices on other goods Deceptive Estimates

Selling Used Articles as New Most common when product is sold with no indication that it is used Example?

Identity Theft Utilizing another person’s unique personal information to secure unlawful gain

Other Unfair Trade Practices Use a brand-name or trademark similar to a competitor's Sending unordered merchandise to consumers and demanding payment or return You do not have to pay or return the items Businesses selling door-to-door must give buyer 3 days to cancel orders

EXCEPTIONS TO THE LAWS Patents Copyrights Allow the inventor to have exclusive rights to sell the product for 17 years Copyrights Allow the author to have exclusive rights to written or artistic work

Require licensing of employees How Do Governments Promote Compliance With Consumer Protection Statutes? Require licensing of employees Service businesses are required to provide estimates and detailed bills for all services Example: Auto mechanic Frequent inspections of businesses

What Can You Do If You Are A Victim ?

Personal Remedies Consumers Can Sue the Company Themselves very costly Join A Class Action Suits Two or more people acting on behalf of a larger group that has been harmed by a product Everyone gets a portion of the settlement

Government Remedies Cease and Desist Order government order telling the company to stop a specific action Consent Order defendant voluntarily stops harmful practice rather than go through legal battles Order Restitution Business is forced to return the money (or products) to consumers