BUSINESS LAW - CHAPTER 15 (The Formation of Sales and Lease Contracts)

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BUSINESS LAW - CHAPTER 15 (The Formation of Sales and Lease Contracts)
2014-03-27 17:01:53
Business Law Contracts

Business Law
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  1. Sale
    The passing of title to property from the seller to the buyer for a price.
  2. Lease
    Under Article 2A of the UCC, a transfer of the right to possess and use goods for a period of time in exchange for payment.
  3. Tangible/Intangible Property
    Tangible Property = Property that has physical existence and can be distinguished by the senses of touch and sight.

    Intangible Property = Property that cannot be seen or touched but exists only conceptually, such as corporate stocks. Such property is not governed by Article 2 of the UCC.
  4. Predominant-Factor Test
    A test courts use to determine whether a contract is primarily for the sale of goods or for the sale of services.
  5. Merchant
    Under the UCC, a person who deals in goods of the kind involved in the sales contract or who holds herself or himself out as having skill or knowledge peculiar to the practices or goods being purchased or sold.
  6. Goods
    Items held for sale in the regular course of business, as in a retail store.
  7. UCC
    Uniform Commercial Code
  8. Lessor/Lessee 
    Lessor = A person who transfers the right to the possession and use of goods to another in exchange for rental payments.

    Lessee = A person who acquires the right to the possession and use of another’s goods in exchange for rental payments.
  9. Requirements / Output Contracts
    An agreement in which a buyer agrees to purchase and the seller agrees to sell all or up to a stated amount of what the buyer needs or requires.
  10. Firm Offer
    An offer (by a merchant) that is irrevocable without the necessity of consideration for a stated period of time or, if no definite period is stated, for a reasonable time (neither period to exceed three months).
  11. Irrevocable Offer
    Buy or sell offer that includes the offeror's commitment to keep it open for a stated period. If the offer is withdrawn during this period, the offeror becomes liable for damages to the offeree for breach of contract. If no closing date is stated in the offer, a reasonable period (typically 90 days) is assumed in law.

    • A firm offer is itself a contract,
    • as regulated by the Uniform Commercial Code (UCC).
  12. Course of Dealing
    Prior conduct between the parties to a contract that establishes a common basis for their understanding.
  13. Usage of Trade
    Any practice or method of dealing that is so regularly observed in a place, vocation, or trade that parties justifiably expect it will be observed in their transaction.
  14. Course of Performance
    The conduct that occurs under the terms of a particular agreement, which indicates what the parties to that agreement intended it to mean.
  15. ROL (Risk Of Loss)
    • The liability of  a carrier, borrower or user of property or goods, or an insurance
    • company to compensate if there is damage or loss.  Between the time a contract is made and the time it is fully performed, goods identified to the contract may be lost, stolen, damaged, or destroyed. Risk of loss
    • law determines whether the buyer or seller is financially responsible for the loss.
  16. Identification
    In a sale of goods, the express designation of the goods provided for in the contract.
  17. Fungible Goods
    Goods that are alike by physical nature, agreement, or trade usage.
  18. Bailee
    Under the UCC, a party who, by a bill of lading, warehouse receipt, or other document of title, acknowledges possession of goods and/or contracts to deliver them.
  19. Cure
    The rights of a party who tenders nonconforming performance to correct his or her performance within the contract period.
  20. CISG
    Contracts for the INTERNATIONAL Sale of Goods (Like the UCC, but international)