title
right of ownership
identification
when specific goods are designated as the subject matter of a sales or lease contract. Gives the buyer or lessee the right to insure the goods and the rights to recover from third parties who damage the goods.
1) in existence
2) identified as the specific goods designated in the cotnract
before any interest in specific goods can pass form the seller or lessor to the buyer or lessee, the goods must be...
identification of existing goods
if the contract calls for the sale or lease of specific and ascertained goods that are already in existence, identification takes place at the time the contract is made.
identification of future goods
goods that are not in existence at the time of contracting. in a sale or lease of any other future goods, identification occurs when the seller or lessor ships, marks, or otherwise designates the goods as those to which the contract refers.
goods that are part of a larger mass
goods that are part of a larger mass are identified when the goods are marked, shipped, or somehow designated by the seller or lessor as the particular goods to pass under the contract.
Fungible goods
goods that are alike naturally, by agreement, or by trade usage. If the owners of these goods hold title as tenants in common, a seller-owner can pass title and risk of loss to the buyer without actually separating the goods.
when title passes
unless otherwise stated, title passes to the buyer at the time and the place the seller performs by delivering the goods.
shipment contract
when the seller is required or authorized to ship goods by carrier. The seller is required only to deliver the goods into the hands of a carrier, and title passes to the buyer at the time and place of shipment.
The risk of loss in a shipment contract pass
destination contract
seller is required to deliver the goods to a particular destination. title passes to the buyer when the goods are tendered at that destination. The risk of loss passes to the buyer or lessee when the goods are tendered to the buyer or lessee at the specif
tender of delivery
occurs when the seller places or holds conforming goods at the buyer's disposal, enabling the buyer to take possession.
document of title
bill of lading". a receipt for goods that is signed by a carrier and serves as a contract for the transportation of the goods.
"Warehouse receipt" a receipt issued by a warehouser for goods stored in a warehouse.
leasehold interest
acquires a right to posses and use goods
void title
legally, no title exists. Buyer acquires no title and the real owner can reclaim the goods form the buyer.
voidable title
a seller has this to goods obtained by fraud, paid for with a check that was later dishonored, purchased from a minor, or purchased on credit when the seller was insolvent.
insolvent
occurs when a person cease to pay debts in the ordinary course of business, cannot pay debts as they become due, or is insolvent under federal bankruptcy law. (Unable to pay debts)
good faith purchaser
one who buys without knowledge of circumstances that would make an ordinary person inquire about the validity of the seller's title to the goods. The original owner normally cannot recover goods from a good faith purchaser if the buyer purchased for value
entrustment rule
entrusting goods to a merchant who deals in goods of that kind give the merchant the power to transfer all rights to a buyer in the ordinary course of business. Includes both turning over the goods to the merchant and leaving purchased goods with the merc
buyer in the ordinary course of business
1) they buy goods in good faith
2) goods are purchased without knowledge that the sale violates the rights of another person in the goods
3) goods are purchased in the ordinary course from a merchant in the business of selling goods of that kind
4) sale t
bailment
temporary delivery of personal property, without passage of title, into the care of another, called a bailee.
bailee
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.
negotiable document
when a party can transfer the rights by signing and delivering, or in some situations simply delivering, the document. The rights of the goods - free of any claims against the party that issued the document - pass with the document to the transferee.
non-negotiable document
the transferee obtains only the rights goods that the party transferring it had, subject to any prior claims.
when risk of loss passes from a bailee
1) the buyer receives a negotiable document of title for the goods
2) bailee acknowledges the buyer's right to possess the goods
3) buyer receives a non-negotiable document of title, and the buyer has had a reasonable time to present the document to the b
sale on approval
if the goods are for the buyer to use. When the seller allows the buyer to take the goods on a trial basis.
sale or return
if the goods are for the buyer to resell. a sale of goods in the present that may be undone at the buyer's option within a specified time period.
risk of loss when seller (lessor) breaches
goods that are so non-conforming that the buyer rejects them, means the risk of loss does not transfer to the buyer.
with non-conforming goods, the risk of loss does not pass to the buyer until...
1) defects are cured
2) buyer accepts the goods in spite o
cured
the goods are repaired, replaced, or discounted in price by the seller
risk of loss when buyer (lessee) breaches
when a buyer or lessee breaches a contract, the risk of loss immediately shifts to the buyer or lessee.
limitations...
1) seller or lessor must have already identified the contract goods
2) the buyer or lessee bears the risk for only a commercially reason
insurable interest
allows buyer or lessee to obtain the necessary insurance coverage for those goods even before the risk of loss has passed.
security interest
a right to secure payment