1. 6.01 Understand Sales Law
What is the importance of the Uniform Commercial Code?
How do government agencies protect consumers?
BB30 Business Law 6.01 Summer 2013

2. SALES LAW & EXCHANGE OF OWNERSHIP
Sales Activity
List 5 items you bought in the last week.
List 2 “large” purchases your family has made in the last 2 years.
BB30 Business Law 6.01 Summer 2013

3. SALES LAW & EXCHANGE OF OWNERSHIP
Using the list of the items in the Sales Activity:
Did ALL of those constitute a sale?
What is the definition of a sale?
What did you do with the product?
What is the definition of ownership?
Were they goods or services?
Did money exchange hands for these items?
If you didn’t have the money to buy the item, how could you change ownership?
BB30 Business Law 6.01 Summer 2013

4. SALES LAW & EXCHANGE OF OWNERSHIP
E-commerce laws
E-commerce – conducting business using electronic means, especially the Internet
Jurisdictional issues – which state has jurisdiction in cases involving sellers & buyers in different states?
The ability to access a website in a particular state does not, by itself, give that state jurisdiction
States may gain jurisdiction over e-commerce transactions if the website allows users to purchase merchandise
Example: Amazon.com - jurisdiction lies with the state in which the buyer resides
Tax issues – jurisdiction helps to determine which state may tax Internet sites, and how buyer may be taxed
Authentication – helps to make certain that buyers and sellers are who they say they are
Digital signature – encoded message that appears at the end of a contract created online
BB30 Business Law 6.01 Summer 2013

5. UNIFORM COMMERCIAL CODE
Internet Search
Find out about the UCC.
Include:
General Information (First published, definition, goal/purpose)
Specific Information (leasing goods, contracts for goods/services, special rules)
Why is it important?
BB30 Business Law 6.01 Summer 2013

6. TRANSFER OF OWNERSHIP Payment vs. Delivery vs. Receipt of Goods
What is the proof?
Vendor vs. Vendee vs. Merchant vs. Casual Seller
Unconscionable Contract vs. Statute of Frauds
BB30 Business Law 6.01 Summer 2013

7. TRANSFER OF OWNERSHIP
Authorized Person vs. Buyers in a Sale Induced by Fraud Holders of Negotiable Instruments Merchants with Possession of Sold Goods
BB30 Business Law 6.01 Summer 2013

8. Existing Goods vs. Identified Goods vs. Future Goods
TRANSFER OF OWNERSHIP
Existing Goods vs. Identified Goods vs. Future Goods
BB30 Business Law 6.01 Summer 2013

9. When does ownership transfer?
Situation
Definition
Who owns item?
Tender of delivery
Seller notifies buyer of item being available.
Buyer once notified.
Seller ships goods
Seller is required to ship item but not deliver to buyer.
Buyer once the carrier is in possession of item.
Seller sends document of title
Seller provides the document of title to the buyer and the buyer can receive the goods at anytime.
Buyer once document of title is possessed.
Seller tenders items at place of sale
Buyer is offered item at the place of the sale.
Buyer once item is tendered.
Discuss each situation one box at a time.
BB30 Business Law 6.01 Summer 2013

10. When does risk of loss transfer?
Situation
Who is at risk?
FOB Shipping Point
Buyer is at risk once the item is shipped.
FOB Destination
Seller is at risk until the product is delivered to the buyer
You purchase a used car on autotrader.com from a dealer in Atlanta. While the car
is being driven to North Carolina it slides off the road and is damaged. What is type
delivery terms will protect you in this transaction?
BB30 Business Law 6.01 Summer 2013

11. RISK OF LOSS Situation Definition Who is at risk? Cash and Carry Sales
Pay cash and take immediate delivery
Buyer assumes risk at receipt.
Sales on Credit
Payment at a later date
COD Sales
Collect on delivery
Buyer assumes risk at receipt (when paid in full).
Sale or Return
Buyer has the option to return the goods
Sale on Approval
Buyer has goods on a trial basis
Buyer assumes risk at time of approval.
Sale of an Undivided Interest
Buyer owns a portion of the item
Each owner has a partial risk.
Auction
Buyer bids on item.
Ownership transfers when the gavel falls (unless reserve is not met).
Bulk Transfer
All or a major part of a business is sold.
Buyer must notify creditors of ownership transfer.
BB30 Business Law 6.01 Summer 2013

12. WARRANTIES Express Implied Warranty of Title Exclusions
BB30 Business Law 6.01 Summer 2013

13. Express Warranty Express warranty is also called a guarantee
The promise or assurance of the quality or life of a product
“Guaranteed satisfaction or your money back”
“Lifetime guarantee”
BB30 Business Law 6.01 Summer 2013

14. Express Warranty Can be oral or written Written form recommended
Parol evidence rule applies: evidence of oral statements made before signing a written contract cannot be presented in court to change or add to the terms of that written agreement
Magnuson-Moss Act – requires that written warranties be labeled as full or limited
BB30 Business Law 6.01 Summer 2013

15. Express Warranty
Puffery by salesman is not a warranty, but an opinion of the salesperson.
Express warranties are created by:
Statement of fact or promise by seller
Description of goods
Use of same item or model
BB30 Business Law 6.01 Summer 2013

16. Implied Warranty
A guarantee of quality imposed by law but not in writing
Implied warranty deals with sale of goods
Regulated by UCC
Given by all sellers
BB30 Business Law 6.01 Summer 2013

17. Implied Warranties Warranty of fitness for a particular purpose
Seller knows the purpose for which goods are needed
Seller advises buyer in making purchase
Buyer relies on seller’s advice to make decision
Seller infers that the goods are fit for a particular purpose
A warranty exists
BB30 Business Law 6.01 Summer 2013

18. Implied Warranties Warranty of Merchantability
Given by a merchant only
Merchant infers that goods pass in the trade without objection
Goods are fit for the ordinary purpose such goods are used for
Conform to any promises or statements made on the container or label
BB30 Business Law 6.01 Summer 2013

19. Implied Warranties
Usage of Trade
An implied warranty that is a well established custom or practice among people in specific trades or businesses
Example: When a person sells a thoroughbred horse there is an implied warranty that papers are provided to prove the animal’s pedigree as a thoroughbred. It is expected in the horse trading business
BB30 Business Law 6.01 Summer 2013

20. Warranty of Title
Seller warrants that the title is good and transfer is rightful Seller warrants that goods will be delivered free of any financial obligations about which the buyer had no knowledge
BB30 Business Law 6.01 Summer 2013

21. Warranty of Title Sale of Stolen Goods
If stolen goods are sold to an innocent purchaser, the true owner is entitled to return of the goods
The buyer can pursue remedy against the seller for breach of warranty of title
BB30 Business Law 6.01 Summer 2013

22. Full Warranty
A full warranty requires that the defective product be repaired or replaced for free within a reasonable length of time after complaint is made.
If the product cannot be fixed, the consumer has the option to get their money refunded.
Have you ever tried to return merchandise that you thought was under warranty but was not?
BB30 Business Law 6.01 Summer 2013

23. Limited Warranty A limited warranty provides a restricted guarantee.
Must state “Limited” Warranty
Be sure to read and understand the limits of the warranty before purchasing…caveat emptor!
BB30 Business Law 6.01 Summer 2013

24. Limited Warranty Caveat Emptor - Latin for “Buyer Beware”
It is the duty of the consumer to make informed decisions.
Be sure to read labels and research products before buying. Comparison shop.
It is the duty of the seller to provide appropriate information for the consumer.
BB30 Business Law 6.01 Summer 2013

25. Caveat Venditor - Latin for “Seller Beware”
Limited Warranty
Caveat Venditor - Latin for “Seller Beware”
It is the duty of the seller to make informed decisions.
Example: Banks, credit card companies and businesses who extend credit to customers check credit histories and applications before extending credit.
BB30 Business Law 6.01 Summer 2013

26. Sales Law Story Activity
Create a story using the guidelines and rubric included in the packet.
BB30 Business Law 6.01 Summer 2013

27. Visit each poster and complete the Gallery Walk Handout.
Create a small poster for the assigned topic on Consumer Protection. (This should be a review from Principles of Business.)
Visit each poster and complete the Gallery Walk Handout.
Turn in for a grade.
BB30 Business Law 6.01 Summer 2013

28. Consumer Protection Blog
Reply to 4 of the 6 blogs.
Turn in for grade
BB30 Business Law 6.01 Summer 2013

29. Consumer Laws and Protection Honors Activity
Complete one of the four scenarios and present your findings to the class.
I’m hatin’ it
Taco Jail
I’m lovin’ it
Taco Bell
Instructions, rubric and additional resources are located in the Obj folder on the webpage.
BB30 Business Law 6.01 Summer 2013