1. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Legal Terminology Fifth Edition by Gordon W. Brown PowerPoints prepared by Kimberly Lundy

2. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Chapter 19 Personal Property and Bailments

3. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Personal Property oPersonal property (also called personalty or chattels) – anything subject to ownership other than real property.

4. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Types of Personal Property oTangible property – things that have substance and can be touched. oIntangible property (also called a chose in action) – not perceived through the senses, i.e., patents and copyrights.

5. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Types of Personal Property (Cont’d.) oFixture – personal property attached to real property. oTrade fixture – personal property necessary to carry on a trade or business.

6. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Sale of Goods oThe Uniform Commercial Code (UCC) is the law governing commercial transactions. nExample: Contracts for the sale of goods.

7. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Sale of Goods oGoods – anything that is moveable. nFuture goods – goods not yet existing. nFungible goods – usually sold by weight or measured in units. nConforming goods – goods in accordance with the contract.

8. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Contract for Sale of Goods (Cont’d.) nNonconforming goods – goods not in accordance with the contract terms.  Seller may cure (correct the defect within the contract period).  If seller does not cure, buyer has right to cover (buy similar goods and sue for the difference). nIdentified goods – specific goods selected as the subject of the contract.

9. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Sales oSale – defined by UCC as the passing of title (ownership) from seller to buyer for a price. nBill of Sale – written evidence of transfer of personal property. nContracts to Sell – if title is to pass in the future. nSale on Approval – if goods are for buyer’s use and can be returned even if conforming.

10. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Sales (Cont’d.) nSale or Return – if goods are primarily for resale and may be returned even if conforming. A gift is not a sale because donee (recipient) pays no price to donor (gift giver).

11. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Bulk Transfers oBulk Transfer – disposes of entire stock in one transaction.

12. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Contracts for Goods oOutput contract – contract to sell all the goods a company manufactures. oRequirements contract – contract to sell all the goods buyer needs. oShipment contract – seller turns goods over to a carrier for delivery to buyer. nTitle and risk of loss (responsibility for damage or destruction) pass to buyer when goods go to carrier.

13. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Contracts for Goods (Cont’d.) oShipment contract or f.o.b. place of shipment – free on board (no delivery charge) to place of shipment. oDestination Contract – f.o.b. place of destination. nTitle and risk of loss pass to buyer when goods are tendered at destination.

14. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. E-Commerce oElectronic commerce – the buying and selling of goods and services or transfer of money over the Internet.

15. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Warranties oWarranties – guarantees by sellers of goods as to their products.

16. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Express Warranties oExpress warranty – seller’s statement of fact or promises about goods. nFull warranty – requires seller to repair or replace defective goods or refund purchase price. nLimited warranty – label required for anything less than a full warranty.

17. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Implied Warranties oImplied warranties – imposed by law. nMay be excluded by seller if conspicuously noted. Example: “as-is” sales.

18. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Implied Warranties (Cont’d.) nWarranty of merchantability – warranty by merchant that goods sold will be fit for the ordinary purpose of their use.  Merchant – person who sells goods of the kind sold in the ordinary course of business or who has knowledge or skills peculiar to those goods. Not given by private parties.

19. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Implied Warranties oWarranty of fitness for a particular purpose – when a buyer relies on seller’s skill in selecting goods, seller warrants they are fit for the purpose for which they are to be used.

20. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Warranty of Title oWarranty of title – warrants that title is good. nMade by both merchants and private parties. nCannot be excluded by the seller.

21. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Auction Sales oAuction – sale of property to highest bidder (offeror). nAuction with reserve – seller may withdraw goods without accepting highest bid. nAuction without reserve – goods must be sold to highest bidder.

22. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Bailments oBailment – Bailor (owner of goods) places personal property in possession of another (bailee) without transfer of title. oMutuum – borrowing goods with intent of replacing with a similar amount of same goods. Not a bailment, as exact goods are not returned.

23. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Types of Bailments oMutual benefit bailment – both bailor and bailee benefit (i.e. leaving a watch to be repaired). nDuty of ordinary care is owed.

24. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Types of Bailments (Cont’d) oGratuitous bailment – no consideration by one party in exchange for benefits. nBailment for the sole benefit of bailor (i.e. storing a car at a friend’s house) – duty of slight care is owed. nBailment for the sole benefit of bailee (i.e. lending car to a friend) – duty to use great care.

25. Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Wrongful Possession oTortious bailee – one who has wrongful possession of another’s goods. nExamples: taking goods without authority or using another’s goods for other than agreed-upon purpose.