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Part 3 Sales and Consumer Protection
Chapter 13 Sales Contracts: Formation, Title, and Risk of Loss
The Opening Case Questions
1. This is how the text ansewers this question; “To unravel this identity crisis, the court must
determine the goal of the original contract by examining: (1) the language used in the agreement and
the situation in which the contract was made; (2) the way that compensation was handled under the
contract and (3) the relationship between the goods and the services that were provided under the
contract. Ironically, Conopco's own complaint sabotaged its claim that the EY contract was a sale of
5. The Statute of Frauds requires that certain contracts be placed in writing. The writing could have
Questions for Review and Discussion
1. Goods are tangible items that are moveable and valuable to someone and a sale is the
3. Under Article 2-201 of the UCC, a contract for the sale of goods valued in excess of $500
must be in writing to be enforceable. There are exceptions to this rule, however. They include (1) the
4. Congress passed the E-Sign act to deal with problems associated with cyber-contracts and
cyber-signatures. The Uniform Electronic Transactions act was created by the NCCUSL to deal with
5. In an auction with reserve, the auctioneer may withdraw the goods at any time until he or
she announces completion of the sale. In an auction without reserve, after the auctioneer calls for bids
7. In a shipment contract, title passes to the buyer when the goods are given to the carrier. In
a destination contract, title passes to the buyer when the seller tenders the goods at the place of
8. Risk of loss, on the other hand, passes at different times depending on whether the seller is
a merchant. If the seller is a merchant, the risk of loss passes when the buyer receives the goods. If the
9. Sales that allow goods to be returned even though they conform to the contract are sales
on approval when the goods are primarily for the buyer’s use and sales or returns when the goods are
Cases for Analysis
1. No. The treatment for medical services was the primary purpose of the transaction between
4. No. Under the UCC, if the party against whom enforcement is sought admits in court that
5. Yes. The contract was unenforceable. It is necessary to put the quantity of goods to be
6. The seller, Wheel Sports Center, must suffer the loss. Under Section 2-509(3) of the Uniform
7. No. Although Gerard had voidable title to the bicycle because she purchased it from a minor,
8. Heiselman had title to the boat. When anyone entrusts goods to a merchant and the merchant sells
9. Brown suffered the loss. A contract that contains neither an f.o.b. term nor any other term
explicitly allocating loss is a shipment contract. A shipment contract is regarded as the normal one, and
10. No. Buyers receive an insurable interest in goods the moment the contract is made and the goods
are identified to the contract. The sugar falls into the definition of fungible goods, that is, “goods of
END CHAPTER THIRTEEN
