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52 Cards in this Set
- Front
- Back
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ARTICLE 2 |
GOVERNS THE LAW OF SALES. PRESENT TRANSFER OF GOODS FOR VALUE. ONLY APPLIES TO GOODS. MUST BE A TRANSFER OF OWNERSHIP (CROPS ARE GOODS) |
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ARTICLE 2 DOES NOT APPLY TO: (6 THINGS) |
1.SERVICE CONTRACTS 2.REAL PROPERTY 3.STOCKS 4.BONDS 5.BAILMENTS 6.GIFTS |
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BAILMENT |
GIVING POSSESSION OR CONTROL OF PERSONAL PROPERTY TO ANOTHER PERSON |
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BAILOR |
THE PERSON WHO GIVES UP THE PROPERTY |
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BAILEE |
THE PERSON WHO RECEIVES THE PROPERTY |
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MERCHANTS |
PEOPLE WHO REGULARLY DEAL IN THE TYPE OF GOODS INVOLVED IN THE TRANSACTION. MERCHANTS ARE HELD TO A HIGHER STANDARD THAN NON-MERCHANTS. |
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OPEN TERMS |
IF SOME OF THE TERMS OF THE CONTRACT ARE MISSING, YOU CAN FILL THEM IN IF:
1. THE PARTIES WANTED TO HAVE A CONTRACT
2. THERE IS A REASONABLE WAY TO FILL IN THE TERMS |
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TERMS OF A CONTRACT THAT CAN BE FILLED IN: |
PRICE- MUST BE REASONABLE TIME OF DELIVERY- MUST BE REASONABLE PAYMENT- MUST BE MADE WHEN ITEMS ARE DELIVERED DELIVERY- MUST BE AT SELLER'S PLACE OF BUSINESS IF NOT SPECIFIED
YOU CAN NEVER FILL IN THE QUANTITY*** |
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MERCHANT'S FIRM OFFER RULE |
ONLY APPLIES TO MERCHANTS, MUST BE IN WRITING AND SIGNED BY THE MERCHANT
A MERCHANT IS ONLY REQUIRED TO KEEP AN OFFER OPEN FOR 3 MONTHS. NO CONSIDERATION INVOLVED |
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ADDITIONAL TERMS |
ONLY APPLIES TO CONTRACTS BETWEEN MERCHANTS
IF THE OFFEREE ADDS NON MATERIAL TERMS AND THE OFFEROR DOES NOT OBJECT, THE NON MATERIAL TERMS BECOME PART OF THE CONTRACT |
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WRITTEN CONFIRMATION RULE |
ONLY APPLIES TO CONTRACTS BETWEEN MERCHANTS
IF ONE OF THE MERCHANTS CONFIRMS THE TERMS IN WRITING THE OTHER MERCHANT HAS 10 DAYS TO OBJECT OR THEY CANNOT RAISE THE STATUTE OF FRAUDS |
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SPECIFICALLY MANUFACTURED GOODS |
CANNOT RAISE STATUTE OF FRAUDS IF THE GOODS WERE SPECIFICALLY MADE FOR THE BUYER. GOODS CANNOT BE SOLD TO ANOTHER BUYER. |
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FREE ON BOARD CONTRACT (FOB)
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RISK OF LOSS PASSES FROM THE SELLER TO BUYER WHEN THE GOODS ARE GIVEN TO A CARRIER (FEDEX, UPS) |
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FREE ON BOARD DESTINATION CONTRACT |
RISK OF LOSS PASSES FROM THE SELLER TO BUYER WHEN THE GOODS REACH A SPECIFIC DESTINATION |
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FREE ALONG SIDE CONTRACT |
RISK OF LOSS PASSES FROM THE SELLER TO BUYER WHEN THE GOODS ARE ALONG SIDE A MEANS OF TRANSPORTATION (PLANE, SHIP, ETC) PLAN IS TO DIVIDE RISK OF LOSS |
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MERCHANT RISK OF LOSS RULE |
PASSES FROM MERCHANT SELLER TO NON MERCHANT BUYER WHEN THE GOODS ARE IN THE POSSESSION OF THE BUYER |
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NON-MERCHANT RISK OF LOSS RULE |
PASSES FRO THE NON-MERCHANT SELLER TO THE NON-MERCHANT BUYER WHEN THE GOODS ARE MADE AVAILABLE TO THE BUYER |
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IF IDENTIFIED GOODS ARE DESTROYED DURING SHIPPING |
GOODS MUST BE UNIQUE. CONTRACT IS VOID AND BUYER GETS $$ BACK.
*IF THEY ARE DAMAGED THE BUYER CAN EITHER VOID THE CONTRACT OR BUY THE GOODS AT A LOWER COST |
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IF UNIDENTIFIED GOODS ARE DESTROYED DURING SHIPPING |
CONTRACT IS STILL ENFORCEABLE. THE SELLER CAN SUBSTITUTE ANOTHER ITEM |
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SALE ON APPROVAL |
POSSESSION OF THE GOODS IS WITH THE BUYER. TITLE REMAINS WITH THE SELLER UNTIL THE BUYER ACCEPTS. |
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SALE ON RETURN |
TITLE PASSES TO THE BUYER AT THE TIME OF SALE, BUT THE BUYER CAN RETURN THE GOODS FOR A CERTAIN PERIOD OF TIME |
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CONSIGNOR |
PERSON WHO SELLS THE GOODS |
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CONSIGNEE |
PERSON WHO RECEIVES THE GOODS |
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CONSIGNMENT |
A SELLER CAN SELL GOODS AND PAY THE SUPPLIER AT A LATER DATE. |
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BUYERS RIGHTS (2 THINGS): |
1. HAS THE RIGHT TO INSPECT GOODS BEFORE PURCHASING (EXCEPT COD GOODS)
2. CAN REJECT NON-CONFORMING GOODS BEFORE PURCHASING |
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HOW DO BUYERS ACCEPT GOODS? (4 THINGS) |
1.VERBALLY TELLING THE SELLER 2. RE-SELLING THE GOODS 3.ALTERING THE GOODS 4. IF THEY TAKE TOO LONG TO OBJECT |
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IF A MERCHANT WANTS TO REJECT GOODS |
MUST FOLLOW THE INSTRUCTIONS OF THE SELLER INCLUDING SHIPPING THEM BACK OR SELING THEM IF THEY ARE PERISHABLE |
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IF A NON-MERCHANT WANTS TO REJECT GOODS |
ONLY OBLIGATION IS TO HOLD THE GOODS WITH REASONABLE CARE UNTIL THE SELLER PICKS THEM UP |
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SELLER'S RIGHTS |
1. CAN CURE DEFECTS ON A PRODUCT BEFORE IT EXPIRES 2.CAN FIX DEFECTIVE GOODS WHEN THE CONTRACT HAS EXPIRED IF: -THE SELLER BELIEVED THE BUER WOULD ACCEPT - THE SELLER SET THE GOODS AT A REDUCED PRICE |
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WHEN CAN A SELLER CANCEL A CONTRACT |
WHEN THEY ARE STILL IN POSSESSION OF THE GOODS AND LEARN THAT THE BUYER IS INSOLVENT (CAN'T PAY)
SELLER HAS 10 DAYS TO RECLAIM GOODS |
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EXPRESS WARRANTY |
SPECIFICALLY STATED BY THE MANUFACTURER (SELLER) |
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IMPLIED WARRANTY |
CALLED FOR BY LAW OR BY THE FACTS OF A PARTICULAR CIRCUMSTANCE |
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WARRANTY OF MERCHANTABILITY |
ONLY APPLIES TO MERCHANTS
IMPLIED WARRANTY CREATED BY ARTICLE 2 THAT SAYS GOODS ARE FIT FOR THEIR INTENDED USE |
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WARRANTY FOR A PARTICULAR PURPOSE |
IMPLIED WARRANTY, YOU RELY ON THE KNOWLEDGE OF THE SELLER |
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WARRANTY OF TITLE |
A SELLER PROMISES HE HAS VALID TITLE TO THE GOODS. BREACH OF WARRANTY OF TITLE IF THE GOODS ARE STOLEN |
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PROMISSORY NOTE |
TWO PARTY NEGOTIABLE INSTRUMENT. AN UNCONDITIONAL WRITTEN PROMISE.
MAKER----->PAYEE |
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DRAFT |
THREE PARTY NEGOTIABLE INSTRUMENT.
ONE PARTY (DRAWER) ORDERS A 2ND PARTY (DRAWEE) TO PAY A 3RD PARTY (PAYEE)
MUST BE IN WRITING |
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DRAWER |
THE PERSON WHO WRITES THE CHECK |
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PAYEE |
THE PERSON WHO IS PAID ON THE CHECK |
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DRAWEE |
THE BANK WHERE YOU GO TO COLLECT THE $$ |
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CASHIER'S CHECK |
ISSUED BY A BANK, THE BANK IS BOTH THE DRAWER AND THE DRAWEE |
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BEARER PAPER |
DOES NOT REQURE ENDORSEMENT, WHOEVER FINDS IT CAN CASH IT IN. MUST SAY CASH OR BEARER PAPER |
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ORDER PAPER |
PAYABLE TO A SPECIFIC PAYEE (PAYCHECK) |
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ACCOMMODATION PARTY |
LENDS THEIR NAME/CREDIT TO ANOTHER PARTY TO THE INSTRUMENT. ASSUMES LIABILITY IF THERE IS A FAILURE TO PAY |
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WHAT MUST BE PRESENT FOR SOMETHING TO BE A NEGOTIABLE INSTRUMENT |
MONEY UNCONDITIONAL PROMISE SUM CERTAIN (EXACT AMOUNT OF $) TIME SIGNED ORDER OR BEARER PAPER WRITING |
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HOLDER |
A PERSON IN POSSESSION OF A NEGOTIABLE INSTRUMENT. THEY CAN: 1. DEMAND PAYMENT 2. SUE TO COLLECT PAYMENT 3. GIVE UP RIGHT TO BE PAID |
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HOLDER IN DUE COURSE |
MUST TAKE A NEGOTIABLE INSTRUMENT FOR VALUE, IN GOOD FAITH, AND FOR CONSIDERATION. CANNOT BE A GIFT, MUST ACT HONESTLY AND CANNOT BE AWARE THAT IT HAS BEEN DISHONORED |
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REAL DEFENSES TO NEGOTIABLE INSTRUMENTS |
WORKS AGAINST HOLDER & HIDC 1.MINOR 2.DURESS 3.JUDICIALLY DECLARED INCOMPETENT 4.BANKRUPTCY 5.FRAUD IN FACT (TRICKED) 6.FORGERY 7.ALTERATION 8.ILLEGALITY |
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PERSONAL DEFENSES TO NEGOTIABLE INSTRUMENTS |
ONLY WORKS AGAINST THE HOLDER: 1.MENTAL ILLNESS 2.BREACH OF WARRANTY 3. FRAUD IN THE INDUCEMENT- A PARTY MAKES A FALSE STATEMENT AGAINST SOMEONE TO ENTER INTO A NEGOTIABLE INSTRUMENT |
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STOP PAYMENT ORDER |
ORAL - 14 DAYS WRITTEN- 6 MONTHS |
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STALE CHECK |
CHECKS ARE GOOD FOR 6 MONTHS |
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STATUTE OF LIMITATIONS UNDER ARTICLE 2 |
4 YEARS |
