[REG] Delivery, risk of Loss and Title, Warranties

Delivery and risk of Loss

 

Delivery and risk of loss can be independent of title

General rule

- seller holds conforming goods for the buyer

- give the buyer reasonable notice to enable the buyer to take delivery

 

Process

1. Goods must be identified

2. parties must agree on contract terms

3. Default rules apply in the absence of an agreement

 

Nocarrier Cases - seller has no duty to deliver/ship the goods - buyer picks up the goods at the seller's place
not Merchant risk of loss passes to the buyer	Merchant risk of loss passes only upon actual delivery to the buyer
Carrier Cases - Parties agree that a common carrier will be used to ship the goods to the buyer
Shipment contracts risk of loss passes to the buyer when the goods are delivered to the carrier	Destination contracts risk of loss passes to the buyer when goods reach the delivery of the destination&seller tender

 

 

Nonconforming goods

risk of loss remains on the seller, regardless of the shipping terms, unless the buyer accepts the defective goods

* accommodation rule:  주문상품이 아닌 다른 대체품을 보내고 상대방에게(notify)하면 counteroffer된다. 이때 notify한다는 표현이 정확하게 없으면 그냥 breach of contract이다.

 

 

Nonfinal sales

Sale on approval Risk on seller until approval

Sale or Return Risk on buyer until returned,  Risk remains with the buyer until the goods are completely returned

 

 

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Warranties

common law services substantially performed, a minor breach - an innocent party may not cancel the contract - the party who commits the breach may need to pay monetary damages

UCC - seller must make a perfect tender - goods must conform to all warranties

 

- made by law implied or expressed, part of the basis of the bargain

- implied warranty of merchantability requires the seller to be a merchant

- every warranty could be disclaimed except the express warranty

 

4 Types

1) Express warrant: oral or written

    - made before the sale to induce the buyer to purchase the goods

    - can be made by any seller

    - express warranties once made, can not be disclaimed

2) Implied warranty of title

    - good title, the right to transfer the title, fit for ordinary purposes

    - do not infringe on any patent or trademark

    - it cannot be disclaimed by a general disclaimer such as "as is" or "with all faults"

      (merchantability can be disclaimed but not the title)

    - disclaimed only by specific language " I do not warrant title" 

3) Implied warranty of merchantability

     - disclaimed by a statement such as "as is" or "with all faults", using the word merchantability

     - made only by a merchant

     - requires the gods to be fit for ordinary purpose

4) Implied warranty of fitness for a particular purpose

    - select goods suitable for the buyer's particular purpose

    - made by any seller

Type	how arise	by whom	disclaimer
Express	By affirmation of fact, promise, description, model or sample	Any seller	cannot disclaim
Implied warranty of title	By sale of goods	Any seller	by specific language or circumstances showing seller does not claim title
Implied warranty of merchantability	By sale of goods of the kind regularly sold by the merchant	Merchant only	By disclaimer mentioning "merchantability"
Implied warranty of Fitness for particular purpose	by sale of goods where seller has reason to know of particular purpose and of buyer's reliance on seller to choose suitable goods	Any seller	by consipicuous written disclaimer
These may also be disclaimed by language such a s"as is", by inspection(or refusal to inspect), or by course of dealing, course of performance or usage of tade

 

anyone injured by a defective product can sue for breach of contract or warranty and commission of a tort

 

 

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Remedies and Entrusting

 

 

Anticipatory repudiation

sue immediately Cancel the contract Demand assurances Wait until the time for performance and sue then(if other party fails to perform)

 

Right to demand assurances if reasonable grounds exist

failure to give assurance of performance within a reasonable time > anticipatory repudiation

 

Remedies of Buyer and seller

*punitive damages-not available in sale, available only for fraud

Compensatory damages or specific performance

 

Duty to mitigate- avoid damages

 

 

 

Seller's remedies

- cancel or rescind sue for damages

- resell, sue the buyer for any losses(contract price-resale price+any incidental damages: storage, advertisement)

- withhold delivery

 

 

Liquidated Damages

Presence of a liquidated damage clause(common law, same) specifies the amount of damages, vaild amount - not a penalty

Absence of a liquidated damage clause(unique to UCC) - the buyer  has made a down payment and breaches, the seller may keep the lesser of  $500 or 20% of the sales price

 

 

Buyer's remedies

nonconforming goods

- reject the goods

- accept, sue for differ in value

* In contrast to common law, the seller pays any monetary damages even for a minor breach

- cover(다른 비슷한거 삼, 금액차이 seller에게 청구)

- MKT-contract price+incidental, consequential damages

 

Replevin(right to recover goods wrongfully in the hands of the seller)

   

Seller's insolvency

buyer may recover the goods from the seller if the goods are identified

 

 

 

Entrusting

an owner entrust goods to a merchant, merchant sells them to 3rd party

> owner can sue the merchant but unless it is a family heirloom, owner not able to get the goods back