1. The Sale and Lease of Goods Section 13.1

2. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Why It’s Important As you learn more about the law of sales, you will be better able to protect your legal rights and your money when buying or selling a product.

3. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Pre-Learning Question How often do you enter into sales contracts?

4. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods The law of sales governs contracts for the sale and lease of goods. Sales

5. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods A sale is a contract in which ownership of goods is transferred from the seller to the buyer for consideration. The consideration is also known as the price, or the money that is paid for goods. Sales

6. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Goods are all things that are moveable, such as your clothing, books, pens, food, car, and even the gas you put in your car. Money, stocks, and bonds are not considered goods. Sales

7. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods $ ShirtStore ShirtStore 13.1 Sales

8. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods The Uniform Commercial Code (UCC) is a collection of laws that governs various types of business transactions. When you have a contract involving goods, the UCC will apply. The UCC

9. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods A sales contract may involve either a sale or a contract to sell. The Sales Contract

10. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Every time you buy goods and take ownership of them, a sale occurs. However, if you will take ownership at some future time, the agreement is a contract to sell, not a sale. The Sales Contract

11. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods When a contract includes both goods and services, the dominant element determines the type of contract. Contracts for Both Goods and Services

12. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods If the sale of goods dominates, the laws of the UCC apply. If the performance of service dominates, the common law of contract applies. Contracts for Both Goods and Services

13. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Special Rules for Sales Contracts With some exceptions, the UCC applies to all sellers and buyers of goods.

14. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Special Rules for Sales Contracts A merchant is a business or person who deals regularly in the sale of goods or who has a specialized knowledge of goods. A nonmerchant is a casual or occasional seller.

15. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Special Rules for Sales Contracts A sales contract must contain the same elements as other contracts, but the UCC has relaxed some of the strict rules of contract law.

16. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Good Faith Parties to a sales contract must treat each other fairly.

17. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Methods of Dealing and Usage of Trade When parties have previously dealt with each other, those methods of dealing may be used to supplement or qualify the terms of their sales contract.

18. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Methods of Dealing and Usage of Trade This rule is true with any usage of trade, which is the method of dealing that is commonly used in the particular field.

19. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Formation of a Sales Contract You may make a contract in any manner that shows that the parties have reached an agreement.

20. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Acceptance of an Offer In most situations, you may accept an offer by any means and in any reasonable manner.

21. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Different or Additional Terms An acceptance may have different or additional terms added without a complete rejection of the offer.

22. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Firm Offer A firm offer is a merchant’s written promise to hold an offer open for the sale of goods. It does not require payment to be binding.

23. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Open-Price Terms A sales contract may be made without a settled price. Unless the parties agree on a price prior to delivery, a reasonable price can be settled at the time of delivery.

24. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Output and Requirement Terms Output and requirement contracts are allowed even if they are not definite.

25. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Output and Requirement Terms An agreement to buy all of the manufacturer’s goods is an output contract. A requirement contract occurs when a seller agrees to supply the needs of a buyer.

26. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Modification No consideration is necessary to change a contract for the sale of goods. The modification may be oral, unless the original agreement is in writing and states that it must be modified in writing.

27. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Leasing Goods You can apply the sale-of-goods rules to the leasing of goods, with a few modifications.

28. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Pre-Learning Question Do you think sales contracts are enforceable if they are oral and not written?

29. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Many sales contracts are oral rather than written. As long as the price is less than $500, an oral contract for the sale of goods is enforceable. Form of Sales Contracts

30. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods If the price is $500 or more, a sales contract must be in writing to be enforceable with the following exceptions: Form of Sales Contracts

31. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Written confirmation of an oral contract between two merchants is sent within a reasonable time, and no objection is made within ten days. Exceptions to the $500 rule

32. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods The contract involves specially manufactured goods that cannot be resold easily. Exceptions to the $500 rule

33. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods The buyer receives and accepts the goods or pays for them. The parties admit in court that they entered into an oral contract. Exceptions to the $500 rule

34. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Anton Carapoli makes handcrafted violins for professional musicians. His instruments are famous and sell for over $20,000.

35. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods If Carapoli and a buyer contract orally for a violin, is the contract enforceable if the buyer later refuses to pay the agreed sum?

36. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods ANSWER Yes. A Carapoli violin is a specially manufactured good.

37. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Pre-Learning Question What other types of sales might be governed by UCC rules?

38. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Other sales governed by the UCC rules include auction sales and bulk transfers. Other Sales Governed by UCC Rules

39. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Auction Sales In an auction with reserve, the auctioneer does not have to sell the goods for the highest bid if it’s lower than the reserve amount. The auctioneer may withdraw the goods at any time before a sale is completed.

40. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Auction Sales In an auction without reserve, the auctioneer must sell the goods to the highest bidder. The goods cannot be withdrawn from bidding unless no bid is made.

41. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Auction Sales An auction sale is with reserve unless it is expressly stated that it is without reserve.

42. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Bulk Transfers Sometimes a business transfers all merchandise and supplies at once, which is known as a bulk transfer.

43. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Bulk Transfers The UCC rules require that the buyer of the bulk goods notify all of the seller’s creditors at least ten days before the transfer will take place.

44. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned 1. 1.When do you use the law of sales? Section 13.1 Assessment

45. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned For the sale and lease of goods Section 13.1 Assessment Answer

46. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned 2. 2.What special rules apply to sales contracts? Section 13.1 Assessment

47. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned Must be in good faith; may be supplemented with methods of dealing and usage of trade; may result from the parties’ conduct; offer may be accepted by any reasonable means; Section 13.1 Assessment Answer

48. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned acceptance may include terms different than those in offer; consideration not required for firm offer; price need not be settled; output and requirement contracts allowed; may be modified without consideration. Section 13.1 Assessment Answer

49. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned 3. 3.When must sales contracts be in writing? What are the exceptions? Section 13.1 Assessment

50. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned For sale of goods for $500. Exceptions: oral contracts between two merchants when a confirmation is sent and no objection made; oral contracts for specially manufactured goods; admissions in court; executed oral contracts Section 13.1 Assessment Answer

51. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned 4. 4.What are some rules for auctions and bulk sales? Section 13.1 Assessment

52. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned In an auction with reserve, the auctioneer need not accept the highest bid. In an auction without reserve, the auctioneer must accept the highest bid. Section 13.1 Assessment Answer

53. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned The UCC rules require that the buyer of bulk goods in a bulk transfer notify all of the seller’s creditors at least ten days before the transfer will take place. Section 13.1 Assessment Answer

54. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Section 13.1 Assessment Critical Thinking Activity Law of Sales When you contract for something that includes both goods and services, such as having wall-to-wall carpeting installed in your home, how should you determine whether to apply the law of sales?

55. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Section 13.1 Assessment If the sale of goods is dominant, the laws of the UCC apply. If the performance of services is dominant, the common law of contract applies. Critical Thinking Activity Answer Law of Sales

56. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Section 13.1 Assessment Legal Skills in Action Auctions Conduct a two-part mock auction of music CDs in front of your class.

57. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Section 13.1 Assessment Legal Skills in Action Auctions Have your classmates bring in CDs to be auctioned. (Be sure to mention that everything will be returned to the rightful owners after the auction.)

58. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Section 13.1 Assessment Legal Skills in Action Auctions Arrange for the first part of the role-play to be an auction without reserve and for the second part to be an auction with reserve.

59. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Section 13.1 Assessment Legal Skills in Action Answer Auctions Mock auctions will vary, but should recognize the differences between auctions with and without reserve.

60. The Sale and Lease of Goods End of Section 13.1

61. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods

62. The Sale and Lease of Goods Section 13.2

63. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods What You’ll Learn How to differentiate between passage of title and risk of loss in a sales contract (p. 277) What you can do when someone breaches a sales contract (p. 281)

64. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Why It’s Important Being informed about ownership and risk of loss when you make sales contracts will help you protect your investment when buying or selling products.

65. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Legal Terms title (p. 276) bill of sale (p. 276) voidable title (p. 276) risk of loss (p. 278) identified goods (p. 278) future goods (p. 278)

66. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Legal Terms carrier (p. 278) f.o.b. (p.278) destination contract (p. 279) bill of lading (p. 281) warehouse receipt (p. 281)

67. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Title Voidable Title Buying from a Merchant Section Outline Passage of Title and Risk of Loss Shipment Contract Destination Contract Documents of Title

68. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Remedies for Breach of Sales Contract Seller’s Remedies Buyer’s Remedies Section Outline

69. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Pre-Learning Question What does it mean to “have title” to something?

70. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods The right of ownership to goods is known as title. People who own goods have title to them. Title

71. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods A bill of sale is formal evidence of ownership. You receive this document when you buy goods. It only proves that you once had title, not that you still own the goods. Title

72. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Price Name and address of buyer and of seller Receipt Goods sold Elements of a Bill of Sale

73. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods WarrantyDate Signature of seller Elements of a Bill of Sale

74. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Anyone who obtains property as a result of another’s fraud, mistake, undue influence, or duress holds only voidable title to the goods. Voidable Title

75. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Voidable title means title that may be voided if the injured party elects to do so. Voidable Title

76. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods The UCC has a special rule that allows merchants who have no title to goods to pass on good title to their consumers. Buying from a Merchant

77. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods This occurs when you entrust your own goods to a merchant who sells them in the ordinary course of business. Buying from a Merchant

78. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods This gives consumers confidence that they will receive good title when buying from a merchant. This rule does not apply to stolen goods. Only the rightful owner has title to stolen property. Buying from a Merchant

79. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Pre-Learning Question How do you think title is passed from one to another?

80. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Sometimes it is necessary to determine who has title to goods—the seller or the buyer. Passage of Title and Risk of Loss

81. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Similarly, it is sometimes necessary to determine who must bear the risk of loss, or the responsibility for loss or damage to goods. Passage of Title and Risk of Loss

82. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods The reason is that goods may be stolen, damaged, or destroyed after the sales contract has been entered but before the transaction is completed. Passage of Title and Risk of Loss

83. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Title to goods cannot be transferred under a sales contract until the goods have been identified. Identified goods are goods that presently exist and that have been set aside for a contract. Passage of Title and Risk of Loss

84. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Goods that are not both existing and selected are known as future goods, such as crops not yet grown or items not yet manufactured. No one can have title to future goods. Passage of Title and Risk of Loss

85. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Ed Johnson goes to the Buy-a-Heap car dealership and buys a used car. Later, the police pull him over and tell him that the car was stolen.

86. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Assuming the police are correct, does Johnson have ownership of the car?

87. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods ANSWER No. Only the rightful owner has title to stolen property.

88. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods A shipment contract is one in which the seller turns the goods over to a carrier for delivery to a buyer. A carrier is a transportation company. Shipment Contract

89. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Both title and risk of loss pass to the buyer when the goods are given to the carrier. Shipment Contract

90. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods The term f.o.b., or free on board, means that goods will be delivered free to the designated place. The buyer must pay the freight charges from the shipping point to the destination. Shipment Contract

91. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods When a contract requires the seller to deliver the goods to a destination, it is a destination contract. Destination Contract

92. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Both title and risk of loss pass to the buyer when the seller leaves the goods at the place of destination. Destination Contract

93. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods When no delivery is required and the contract calls for the buyer to pick up the goods, title passes to the buyer when the contract is made. No Delivery

94. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods When goods are not to be shipped by carrier, the passage of risk of loss depends on whether the seller is a merchant. No Carrier

95. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods If the seller is a not a merchant, the risk of loss passes to the buyer when the seller delivers the product, or the seller offers to turn the goods over to the buyer. No Carrier

96. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods If the seller is a merchant, the risk of loss is transferred from the seller to the buyer when the buyer receives the goods. No Carrier

97. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Sometimes when you buy goods you receive a document of title, rather than the actual goods. Documents of Title

98. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods A bill of lading is a receipt for shipment of goods given by a transportation company, or carrier, to a shipper when the carrier accepts goods for shipment. Documents of Title

99. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods A warehouse receipt is a document given to a customer by the warehouse that is storing his or her goods. Documents of Title

100. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Pre-Learning Question What remedies do buyers and sellers have in the event of a breach of a sales contract?

101. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods The UCC prescribes specific remedies for both the buyer and the seller when there is a breach of a sales contract. Remedies for Breach of Sales Contract

102. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods 1.Cancel the contract. 2.Withhold delivery of goods. Seller’s Remedies

103. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods 3.Stop delivery of any goods that are still in the possession of the carrier. 4.Resell any goods that have been rightfully withheld. Seller’s Remedies

104. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods 5.Bring a claim against the buyer for the difference between the agreed price and the market price or for the price of any goods that were accepted by the buyer. Seller’s Remedies

105. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods 1.Cancel the contract. 2.Bring a claim against the seller for the return of any money that has been paid or for the difference between the agreed price and the market price. Buyer’s Remedies

106. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods 3.Refuse to accept the goods if they do not conform to the contract. 4.Cover the sale. Buyer’s Remedies

107. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods 5.Give notice to the seller that the goods have been accepted but that they do not conform to the contract. 6.Revoke the acceptance and return the goods. Buyer’s Remedies

108. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned 1. 1.When does title pass from the seller to the buyer in a sales contract? When does the risk of loss pass? Section 13.2 Assessment

109. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned Shipping contract: title and risk of loss pass to buyer when goods are given to carrier. Destination contract: title and risk of loss pass to buyer when goods reach destination. Section 13.2 Assessment Answer

110. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned If buyer must pick up goods, title passes when contract is made. If seller is a merchant, risk of loss passes when buyer receives goods. If not, risk passes to buyer when seller tenders goods. Section 13.2 Assessment Answer

111. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned 2. 2.What remedies are available when a seller breaches a sales contract? When a buyer breaches a contract? Section 13.2 Assessment

112. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned When buyer breaches, seller may cancel contract, withhold delivery, stop delivery, resell goods and bring claim for difference between agreed prices and market price, or bring claim for any goods that were accepted by buyer. Section 13.2 Assessment Answer

113. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned When seller breaches, buyer may cancel contract, bring claim against seller for return of money paid or for difference between agreed and market price, Section 13.2 Assessment Answer

114. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned reject nonconforming goods, cover the sale, accept nonconforming goods and bring claim against seller if no adjustment is made, or revoke acceptance. Section 13.2 Assessment Answer

115. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Section 13.2 Assessment Critical Thinking Activity Fairness Suppose you leave your ring at a jewelry store to be appraised and the store sells it by mistake to an innocent purchaser. Under the UCC, the innocent purchaser receives good title to your ring.

116. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Section 13.2 Assessment Critical Thinking Activity Fairness Is this rule fair? Support your argument.

117. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Section 13.2 Assessment Critical Thinking Activity Answer Fairness Answers may vary. This law gives consumers confidence that they will receive title to goods bought from a merchant.

118. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Section 13.2 Assessment Legal Skills in Action Contracts Involving Minors If you are under the age of eighteen when you buy goods, you can return the goods and get your money back. You lose this right when you become eighteen.

119. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Section 13.2 Assessment Legal Skills in Action Contracts Involving Minors Present a point of view to the class regarding whether this rule is reasonable.

120. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Section 13.2 Assessment Legal Skills in Action Answer Contracts Involving Minors Presentations will vary, but should recall a minor’s capacity to contract.

121. The Sale and Lease of Goods End of Section 13.2

122. The Sale and Lease of Goods Section 13.3

123. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods What You’ll Learn Tips for safer Internet shopping (p. 284) How to identify consumer-friendly Web sites for international online shopping (p. 286)

124. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods What You’ll Learn How to describe the law that permits the use of electronic signatures on contracts (p. 286) How to identify legal safeguards to protect your right to computer privacy (p. 286)

125. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Why It’s Important Electronic commerce is on the cutting edge of today’s business world. As you learn more about electronic commerce, you will advance further in today’s society.

126. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Legal Terms electronic commerce (p. 284) electronic signature (p.286) online privacy (p. 286) Federal Trade Commission (FTC) (p. 287)

127. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Electronic Commerce Shopping Safely on the Internet Worldwide Shopping Electronic Signatures Section Outline Online Privacy

128. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Pre-Learning Question What is electronic commerce?

129. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Electronic commerce, also called e- commerce, is the buying and selling of goods and services, or the transfer of money, over the Internet. Electronic Commerce

130. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Shopping online offers many benefits. You can shop when you want, you can find almost anything you want, and prices may be very good. However, there can be some dangers to shopping on the Internet. Shopping Safely on the Internet

131. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods To avoid these dangers, here are some tips: Shopping Safely on the Internet Shop with companies you know. Keep your password private. Pay by credit or charge card. Keep a record.

132. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Internet auctions offer good buys, but they can be risky. Do your homework before buying online. Internet Auctions 1.Know the seller. 2.Know the product. 3.Know the auction site. 4.Know how to bid.

133. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Online shopping has opened up a world of available goods. Answer these questions to determine whether a Web site is safe for international online shopping. Worldwide Shopping

134. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Are the prices listed in U.S dollars or another currency? Does the company ship internationally? How long will delivery take? Worldwide Shopping

135. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Will unexpected taxes or duties be added to the price? Who can help you resolve any problems? Worldwide Shopping

136. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods E-Sign is a federal law that permits the use of electronic signatures and records. An electronic signature is a method of signing an electronic message. Electronic Signatures

137. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods It identifies a particular person as the source of the message. It indicates that person’s approval of the information in the message. Electronic Signatures

138. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Under E-Sign, an electronic signature can be used on a contract if the parties agree. The Uniform Electronic Transactions Act (UETA), adopted by numerous states, is a similar law. Electronic Signatures

139. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Your friend, Eric, is a film collector and wants to buy a new DVD from an online retailer. List some safety precautions he can take in making his purchase.

140. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods ANSWER Answers may include shopping with a company he knows, keeping his password private, paying by credit card, and keeping a record.

141. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods If Eric wanted to buy a rare, collector’s film from a small international online retailer, what are some of the additional concerns he should address before making his purchase?

142. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods ANSWER He should ask about currencies, shipping, duties and taxes, customer service, and return policies.

143. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Pre-Learning Question How is your online privacy protected?

144. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Online privacy is a part of your more general right to privacy. It concerns your identity, movement, and personal commercial activities on the Internet. Online Privacy

145. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Many laws protect your rights to online privacy. Children (under thirteen) are protected with special statutes, such as the Children’s Online Privacy Protection Act. Online Privacy

146. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Many state legislatures are adopting laws regulating Internet privacy, which can create confusion among consumers. There is a movement for the U.S. Congress to set national standards that override state legislation. Online Privacy

147. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods The Federal Trade Commission (FTC) investigates violations of the FTC Act, which states that, “unfair or deceptive acts or practices in or affecting commerce are hereby declared unlawful.” Online Privacy

148. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned 1. 1.What are some tips for safe Internet shopping? Section 13.3 Assessment

149. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned Shop with companies you know; keep password private; pay by credit card; keep records of purchases. Section 13.3 Assessment Answer

150. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned 2. 2.How can you determine the consumer friendliness of a Web site when shopping internationally? Section 13.3 Assessment

151. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned Consider whether the prices are in U.S. dollars and whether international shipping is offered. Research delivery times and taxes. Section 13.3 Assessment Answer

152. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned 3. 3.Describe the law that permits the use of electronic signatures on contracts. Section 13.3 Assessment

153. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned Electronic signatures can be used on a contract if the parties agree. Section 13.3 Assessment Answer

154. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned 4. 4.Identify legal safeguards that protect your right to computer privacy. Section 13.3 Assessment

155. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Reviewing What You Learned The right to Internet privacy is protected by many laws. Children under thirteen are given special protection. Section 13.3 Assessment Answer

156. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Section 13.3 Assessment Critical Thinking Activity Internet Transaction Indicate as true or false whether the UCC law of sales governs the following transactions made over the Internet:

157. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Section 13.3 Assessment Critical Thinking Activity Internet Transaction Buying a used computer Hiring lawn care services Buying stocks Selling a parcel of land Buying unborn puppies

158. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Section 13.3 Assessment Critical Thinking Activity Answer Internet Transaction Buying a used computer (true) Hiring lawn care services (false) Buying stocks (false) Selling a parcel of land (false) Buying unborn puppies (true)

159. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Section 13.3 Assessment Legal Skills in Action Internet Fraud With your classmates, brainstorm about various types of Internet fraud. Discuss ways to avoid becoming a victim of fraud.

160. Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Section 13.3 Assessment Legal Skills in Action Answer Internet Fraud Discussions will vary, but should recognize how the safety tips for Internet shopping help reduce fraud.

161. The Sale and Lease of Goods End of Section 13.3