Sales - Part 3

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stac8199
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149109
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Sales - Part 3
Updated:
2012-04-21 17:30:10
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Sales Part
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Warranties
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  1. What is the Revised Art. 2 rule concerning the colorful challenge to title?
    warranty that title shall not expose the B to colorful challenge to title
  2. What is the minority rule concerning the colorful challenge to title?
    if the title is good, then the warranty isn't breached even if there is a colorful challenge to title
  3. Will the disturbance of quiet possession breach the warranty of good title?
    maybe
  4. What is the majority rule concerning the colorful challenge to title?
    if there is a colorful challenge to title/shadow on the title, the warranty is breached
  5. What is the definition of clean title?
    goods shall be delivered free from any SI or other lien/encumbrance of which the B at the time of K had no knowledge
  6. What is the definition of Warranty of Good Title?
    • 2-312
    • title conveyed shall be good
    • its transfer is rightful
  7. When and how can a warranty of title be excluded or modified under 2-312(2)?
    only by specific language or by circumstances which give the B reason to know that the person selling doesn't claim title in himself
  8. If a B furnishes specifications to the S, must he hold the S harmless against any 3P infringement claims arising out of compliance with those specifications under 2-312(3)?
    yes
  9. Does the warranty of title extend to the B regardless of whether the S was in possession of the goods at the time of the sale or K?
    Yes
  10. The breach of warranty of good title occurs when, if at all?
    at the tender of delivery
  11. Is the warranty of title considered an implied warranty the disclaimer of which would be governed by 2-316?
    NO, it is different and its disclaimer is handled by 2-312(2)
  12. What are the 3 ways express warranties are created under 2-313(1)?
    • affirmation of fact or promise made by S to B relating to the goods
    • description of the goods
    • sample or model

    In all 3 instances the thing must become a part of the basis of the bargain
  13. What test is applied to determine if an affirmation of fact or promise constitutes an EW?
    • knowledge differential test
    • BoP on S regarding reliance or lack thereof
  14. Where do courts stand on the issue of whether a B must be aware of the EW to make a claim?
    they are split
  15. If a S makes an EW that is untrue, does he have a defense if he acted in good faith w/o knowledge of the defect?
    no
  16. How is an EW breached?
    whent he stuff isn't what it is supposed to be...even if done innocently
  17. Can advertisements create EW?
    yes but they must have been seen by the B or he was otherwise aware of them at the time of K
  18. Can CopCod create an EW by description of the goods under 2-313?
    yes
  19. Are magic words like "warrant" or "garauntee" needed to create an EW under 2-313?
    no
  20. Do replacement parts relate to the goods such that an affirmation of fact or promise about them would constitute an EW under 2-313?
    maybe depedning on if the phrase "which relates to the goods" is construed liberally or conservatively
  21. Is it possible to create an EW after the closing of a deal?
    yes via modification if it is otherwise reasonable and in order (i.e. - paying for good and S makes an additional comment about it)
  22. What is the general assumption about samples and models under 2-313?
    that any sample or model, just as any affirmation of fact, is intended to become a basis of the bargain
  23. Must there be an intent to create an EW before one will be created under 2-313?
    no
  24. Is the mere description of a good as being such and such sufficient to create an EW under 2-313?
    yes
  25. Any time a B wants to make an argument based on the goods' failure to be as warranted, he will be expected to state as precisely as possible what?
    • what type of warranty
    • what qualities it covers
    • how it was created
    • specific facts in the instant situation that brought this particular warranty beling relied upon into being
  26. What is the test utilized under the description of goods prong of EW for determining whether it was breached?
    what would RPP in B position, buying in that particular market, expect to be delivered when a K is made under this description
  27. Does an affirmation about the value of the goods or a statement purporting to be merely the S opinion or commendation of the goods create an EW under 2-313?
    no
  28. Do profits relate to goods for purposes of creating an EW by affirmation of fact or promise under 2-313?
    no
  29. What is the approach regarding food under the implied warranty of merchantability (2-314)?
    reasonable expectation approach - is the substance causing the harm natural to the product?

    liability for breach of IWM lies whenever the consumer wouldn't reasonably have expected to find the substance in the product
  30. Can the special knowledge and experience of the B have a bearing on the reasonableness of his expectations regarding the IWM (2-314)?
    yes
  31. How long and well a product will be expected to last under its IWM must be considered in light of what?
    its use and how it was treated
  32. Can price play a part in determining merchantability?
    yes
  33. If an otherwise harmless product causes harm, to be considered unfit and thereby breaching its IWM under 2-314, what is the standard?
    must have been reasonably foreseeable that the product would have caused harm to an appreciable number of consumers
  34. When is the IWM implied in a K for sale under 2-314?
    when the S is a M with respect to goods of that kind
  35. Does the serving of food/drink to be consumed either on the premises or elsewhere constitute a sale for purposes of the IWM under 2-314?
    yes
  36. What are the requirements for merchantability under 2-314?
    • pass w/o objection in the trade under K description
    • fungible goods - fair avg quality w/in description
    • fit for ordinary purpose
    • run w/in the variations permitted by K of even kind, quality, and quantity w/in each unit and among all units
    • adequately contained, packaged, and labeled as required
    • conform to the promise/affirmations of fact made on container or label if any
  37. Can IW arise from CoD or UoT?
    yes unless excluded or modified
  38. Does a specific designation of goods by the B exclude the S obligation that they be fit for the general purposes appropriate to such goods under 2-314?
    no
  39. Does the IWM apply to a person making an isolated sale of goods?
    no b/c not a merchant
  40. What does "fair average" mean with regards to IWM under 2-314?
    • goods centering around the middle belt of quality, not the least or the worst
    • however a fair percentage of the least is permissible but the goods aren't fair average if they are all of hte least or worst quality possible under description
  41. What must be shown in an action for breach of warranty?
    • the existence of the warranty
    • fact that warranty was broken
    • breach of warranty was the proximate cause of loss suffered
  42. What 3 things must you show to succeed under IWFFPP (2-315)?
    • S had reason to know the particular purpose for which B required the goods
    • S had reason to know B relying on S judgment or skill to furnish the appropriate goods
    • B did so rely
  43. Does strict liability apply to IWM and IWFFPP?
    yes
  44. Does merchantability require that the goods be perfect or be all that the B would hope?
    no...just must meet the B reasonable expectations regarding goods based solely on the fact that they were purchased from a M who deals in goods of that kind
  45. What is the key concept of merchantability under 2-314?
    that the goods be fit for their ordinary purpose
  46. Does the IWM under 2-314 apply to used goods?
    yes but the S obligation is only such as is appropriate to such goods...how fit the goods must be will depend on the circumstances of each case
  47. Does IWFFPP under 2-315 require the S to be an Art. 2 merchant?
    no
  48. If there are words or conduct that create an EW and then there are words or conduct tending to negate or limit that EW, how are these things construed under 2-316?
    as consistent with each other whenever reasonable meaning that the EW will still be present but may be watered down

    if the negation or limitation language can't be read consistently with the EW then it is inoperative
  49. Does 2-316 in any way prohibit or limit the degree to which the IWs may be disclaimed?
    no
  50. IW arise by what?
    omissions on the S part
  51. What is the procedure for disclaiming the IWM under 2-316?
    • must mention merchantability specifically
    • if in writing this must be conspicuous
  52. What is the procedure for disclaiming the IWFFPP under 2-316?
    • must be in writing
    • must be conspicuous
  53. Are words such as "as is", "with all faults" or other similar language sufficient to disclaim all IWs under 2-316?
    yes
  54. If the B before entering into the K has examined the goods, model, or sample fully or has refused to do so, are there still IW associated with defects that an examination ought to have revealed under 2-316?
    no
  55. Can IW be excluded or modified via CoPCoDUoT?
    yes
  56. What is the difference b/t 2-316 and 2-719?
    2-316 speaks in the language of procedure - matter of how to disclaim

    2-719 is all substance and focuses on outcomes - what ends are to be tolerated as reasonable limitations on B rights to remedies
  57. If the B's PO constitutes the offer of K, does any language in the S form that raises for the first time a disclaimer or limitation of liability work its way into the K under 2-207?
    no b/c constitutes a material alteration
  58. In the situation where the B gives precise and complete specifications to the S does the IWFFPP arise?
    not normally b/c the B isn't relying on the S
  59. Is it sufficent to find that the B has refused to examine for purposes of 2-316(3) if the goods are merely available for inspection?
    no there must in addition be a demand by the S that the B examine the goods fully which works to put the B on notice that he is assuming the risk of defects which the examination ought to reveal
  60. What determines which defects are excluded by examination under 2-316(3)?
    the particular B skill and the normal method for examining goods in the circumstances
  61. In the situation where the B gives precise and complete specs to the S does the IWM arise?
    not unless consistent with the specs
  62. In NC, horizontal privity applies to whom and to what under 2-318?
    PI of any natural person in B family, household, or guest if their use of the goods was reasonably foreseeable
  63. Can a S exclude or limit the operation of 2-318 in NC?
    No
  64. Does either alternative A or alternative B under 2-318 extend to cover economic loss only?
    nope...only alternative C could apply in this instance
  65. At CL can remote purchasers sue M for PI and property damage as well as economic loss?
    • yes to PI and property damage
    • no to economic loss
  66. To whom and for what does privity extend under Alternative B of 2-318?
    • Natural persons, not just family, who may reasonably be expected to use the goods
    • limited to PI
  67. To whom and for what does privity extend under Alternative C of 2-318?
    • any person who can reasonably be expected to use the goods
    • extends to business entities and economic loss
  68. According to Revised Art. 2, if you have a CoA for breach of IWM then you should sue under what?
    products liability
  69. According to the Revised Art. 2, if you have a CoA for breach of an EW or IWFFPP then you should sue under what?
    UCC
  70. What is the test associated with determining whether an EW has been created?
    Did the S state a fact of which the B is ignorant or did S merely state an opinion or judgment?
  71. How does the Revised Art. 2 treat remedial promises?
    these if made by the S to the immediate B create an obligation that the promise will be performed upon the happening of the specified event
  72. Under the MMWA, what are the 104 requirements associated with full warranties?
    • remedy w/in a reasonable time (no charge)
    • can't limit IW
    • can't exclude CD if conspicious
    • if try to fix and can't then get refund
  73. With whose rights is the MMWA concerned?
    only the rights of those who purchase consumer products
  74. What does the MMWA do?
    allows remote purchasers to sue the manufacturer even though there is a lack of direct privity b/t the parties
  75. What determines whether the MMWA is relevant to the circumstances?
    • the nature of the goods being sold
    • situation of the B is irrelevant
  76. What are the 2 types of warranties created under the MMWA?
    full and limited
  77. What is a full warranty under the MMWA?
    • one that meets the minimum standards set forth in 104
    • can limit duration as long as duration is a reasonable period of time
    • if unable to fix then B can elect either replacement or refund
  78. What is a limited warranty under MMWA?
    one that doesn't meet the minimum requirements of 104
  79. Does the MMWA provide for or create any IWs?
    no
  80. Must all warranties under the MMWA be written?
    yes
  81. Who can sue to enforce the MMWA?
    • the US AG and FTC to enforce compliance
    • any individual consumer who is damaged by supplier's failure to comply may bring a private CoA for damages and other equitable relief
  82. Does the MMWA provide for any S remedies and if so what are they?
    no
  83. How must the warranties under the MMWA be disclosed?
    • fully and conspicuously in simple and readily understood language
    • designation of full or limited must also be clearly and conspicuously
  84. If the remedial promise is triggered when a K obligation is breached then which law governs?
    K law should apply
  85. If the remedial promise results from breach of a K obligation and the S can't fix the problem, what does the B get?
    • value of promise (plus ID and CD)
    • value of 3P repair
    • return of purchase price
  86. If a remedial promise is triggered b/c of disclaimer or breach of EW then what applies?
    UCC (2-719 first then 2-711 if that fails)

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