Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
26 Cards in this Set
- Front
- Back
|
Interest |
A legal right in something. More than one party can have legal interest in a particular good. |
|
|
Title |
Normal rights of ownership to a particular good. |
|
|
Existence |
Goods must exist before title can pass.
|
|
|
Identification |
Goods must be identified to the contract before title can pass. The parties must agree in their contract how and when they will identify the goods. |
|
|
What are the standard rules for identifying goods if neither parties specify how the goods are identified? |
1. If the agreement describes specific goods that already exist, such as naming the VIN for a vehicle or ID number on a contract. 2. For Unborn animals, identification generally takes place when they are conceived; and for crops, identification takes place when they are planted. 3. For other goods, identification occurs when seller marks, ships or in some way indicates the exact goods that are going to the buyer. |
|
|
Passing of Title |
Title may pass in any manner on which the parties agree. |
|
|
When does insurable interest exist for the buyer and for the seller? |
For the buyer, insurable interest is created when the goods are identified (either by the planting of the crop, conceiving of the animal, setting aside of the goods, or any other identification methods aforementioned). The seller retains insurable interest in goods as long as she has the title to the goods, or a security interest to them (the buyer still owes her payments on the goods). |
|
|
Bona Fide Purchaser |
A purchaser of goods that can prove that they gave value for the goods and they purchased the goods in good faith. |
|
|
Void Title |
The title when an object is stolen. When goods with a void title is transferred, the new purchaser has gets no title at all. |
|
|
Voidable Title |
Limited rights in goods, inferior to those of the owner.The title when a purchaser purchases the goods using fraud or deception, such as using a bad check. If the purchaser then sells the goods to a bona fide purchaser, the bona fide purchaser now has a good title. |
|
|
Buyer in the ordinary course of business (BIOC) |
One who acts in good faith, without knowing that the sale violates the owner's rights. |
|
|
Creditor's rights in ordinary sales. |
UCC Section 9-320 generally permits a buyer in the ordinary course of business to take the goods free and clear of the security interest, which means that the bank who had security interest in the car someone is selling cannot take the car back from you, the buyer, even though the seller did not pay the bank on time. |
|
|
Bulk Sale |
A bulk sale is one that includes almost all of the inventory of a store. UCC Article 6 places special obligations on both parties in a bulk transaction, requiring sellers and buyers to make sure that creditors are notified before the transaction takes place, so the creditors can protect their interests. |
|
|
Returnable Goods |
Goods which a seller allows the buyer to return even when there is no clear defect or complaints with the goods. Because banks may extend a loan to a business based on inventory, the issue arises whether returnable goods should be included as a merchant's inventory and therefore subject to the interest of the bank. |
|
|
Sale on approval |
Occurs when a buyer takes goods intended to use them himself but has the right to return them. Under UCC section 2-326(2), in a sale on approval, the goods are not subject to the buyer's creditors until the buyer accepts them. |
|
|
Sale or return |
Occurs when a buyer takes goods intending to resell them but has the right to return them to the seller. Under the UCC Section 2-326, in a sale or return, the goods are subject to the claims of the buyer's creditors. |
|
|
Risk of Loss |
An provision under the UCC that applies for the sale of goods to determine who bears the risk of loss. UCC section 2-509(4) states that the parties may allocate the risk of loss any way they wish. |
|
|
Shipment contract |
The seller is responsible until the good is delivered to the carrier. |
|
|
Destination Contract |
The seller is responsible for delivering the goods to the buyer. |
|
|
Bailor |
The one who owns goods legally held by another |
|
|
Bailee |
The one with temporary possession of another's goods. |
|
|
Passing of risk in case of merchant and non-merchants |
If the seller is a merchant, the buyer has greater protection in that the risk of loss passes to the buyer upon receipt of the goods. When the seller is a non-merchant, the risk passes when the seller makes them available to the buyer, or tenders the goods. |
|
|
Nonconforming goods |
Merchandise that differs from that specified in the contract. |
|
|
Seller Breaches and Buyer Rejects |
When the buyer rejects nonconforming goods, the risk of loss remains with the seller until he cures the defect or the buyer decides to accept the goods. |
|
|
Seller Breaches, Buyer Accepts, but Then Revokes |
When a buyer accepts goods but then rightfully revokes acceptance, the risk remains with the seller to the extent the buyer's insurance will not cover the loss. |
|
|
When the Buyer Breaches |
When a buyer breaches the contract before taking possession, it assumes the risk of loss to the extent the seller's insurance is deficient. |
