bb30 business law 6.01summer 2013 6.01 understand sales law

25
BB30 Business Law 6.01 Summer 2013 6.01 Understand sales law

Upload: audrey-mcdaniel

Post on 18-Dec-2015

236 views

Category:

Documents


3 download

TRANSCRIPT

Page 1: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

6.01 Understand sales law

Page 2: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

SALES LAW & EXCHANGE OF OWNERSHIP

Sales Activity

List 5 items you bought in the last week. List 2 “large” purchases your family has

made in the last 2 years.

Page 3: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

SALES LAW & EXCHANGE OF OWNERSHIP

Using the list of the items in the Sales Activity: Did ALL of those constitute a sale?

What is the definition of a sale? What did you do with the product?

What is the definition of ownership? Were they goods or services? Did money exchange hands for these items?

If you didn’t have the money to buy the item,

how could you change ownership?

Page 4: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

SALES LAW & EXCHANGE OF OWNERSHIP

E-commerce laws E-commerce – conducting business using electronic means,

especially the Internet Jurisdictional issues – which state has jurisdiction in cases

involving sellers & buyers in different states? The ability to access a website in a particular state does not, by itself,

give that state jurisdiction States may gain jurisdiction over e-commerce transactions if the

website allows users to purchase merchandise Example: Amazon.com - jurisdiction lies with the state in which the buyer

resides Tax issues – jurisdiction helps to determine which state may

tax Internet sites, and how buyer may be taxed Authentication – helps to make certain that buyers and sellers

are who they say they are Digital signature – encoded message that appears at the end

of a contract created online

Page 5: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

UNIFORM COMMERCIAL CODE

Group Activity: Create a one page summary of the UCC.

Include: General Information (First published, definition,

goal/purpose) Specific Information (leasing goods, contracts for

goods/services, special rules) Why is it important?

Page 6: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

TRANSFER OF OWNERSHIP

Payment vs. Delivery vs. Receipt of Goods What is the proof?

Vendor vs. Vendee vs. Merchant vs. Casual Seller

Unconscionable Contract vs. Statute of Frauds

Page 7: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

TRANSFER OF OWNERSHIP

Authorized Person vs.

Buyers in a Sale Induced by Fraud vs.

Holders of Negotiable Instruments vs.

Merchants with Possession of Sold Goods

Page 8: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

TRANSFER OF OWNERSHIP

Existing Goods vs.

Identified Goods vs.

Future Goods

Page 9: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

When does ownership transfer?

Situation Definition Who owns item?

Tender of delivery Seller notifies buyer of item being available.

Buyer once notified.

Seller ships goods Seller is required to ship item but not deliver to buyer.

Buyer once the carrier is in possession of item.

Seller sends document of title

Seller provides the document of title to the buyer and the buyer can receive the goods at anytime.

Buyer once document of title is possessed.

Seller tenders items at place of sale

Buyer is offered item at the place of the sale.

Buyer once item is tendered.

Page 10: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

RISK OF LOSS

Situation Who is at risk?

FOB Shipping Point Buyer is at risk once the item is shipped.

FOB Destination Seller is at risk until the product is delivered to the buyer

You purchase a used car on autotrader.com from a dealer in Atlanta. While the caris being driven to North Carolina it slides off the road and is damaged. What is typedelivery terms will protect you in this transaction?

When does risk of loss transfer?

Page 11: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

RISK OF LOSS

Situation Definition Who is at risk?

Cash and Carry Sales Pay cash and take immediate delivery

Buyer assumes risk at receipt.

Sales on Credit Payment at a later date Buyer assumes risk at receipt.

COD Sales Collect on delivery Buyer assumes risk at receipt (when paid in full).

Sale or Return Buyer has the option to return the goods

Buyer assumes risk at receipt.

Sale on Approval Buyer has goods on a trial basis

Buyer assumes risk at time of approval.

Sale of an Undivided Interest

Buyer owns a portion of the item

Each owner has a partial risk.

Auction Buyer bids on item. Ownership transfers when the gavel falls (unless reserve is not met).

Bulk Transfer All or a major part of a business is sold.

Buyer must notify creditors of ownership transfer.

Page 12: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

WARRANTIES

Express Implied Warranty of Title Exclusions

Page 13: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

Express Warranty

Express warranty is also called a guarantee The promise or assurance of the quality

or life of a product “Guaranteed satisfaction or your money

back” “Lifetime guarantee”

Page 14: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

Express Warranty

Can be oral or written Written form recommended Parol evidence rule applies: evidence of

oral statements made before signing a written contract cannot be presented in court to change or add to the terms of that written agreement

Magnuson-Moss Act – requires that written warranties be labeled as full or limited

Page 15: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

Express Warranty

Puffery by salesman is not a warranty, but an opinion of the salesperson.

Express warranties are created by: Statement of fact or promise by seller Description of goods Use of same item or model

Page 16: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

Implied Warranty

A guarantee of quality imposed by law but not in writing Implied warranty deals with sale of

goods Regulated by UCC Given by all sellers

Page 17: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

Implied Warranties

Warranty of fitness for a particular purpose

Seller knows the purpose for which goods are needed

Seller advises buyer in making purchase Buyer relies on seller’s advice to make decision Seller infers that the goods are fit for a

particular purpose A warranty exists

Page 18: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

Implied Warranties

Warranty of Merchantability Given by a merchant only Merchant infers that goods pass in the

trade without objection Goods are fit for the ordinary purpose such

goods are used for Conform to any promises or statements

made on the container or label

Page 19: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

Implied Warranties

Usage of TradeAn implied warranty that is a well established custom or practice among people in specific trades or businesses Example: When a person sells a

thoroughbred horse there is an implied warranty that papers are provided to prove the animal’s pedigree as a thoroughbred. It is expected in the horse trading business

Page 20: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

Warranty of Title

Seller warrants that the title is good and transfer is rightful

Seller warrants that goods will be delivered free of any financial obligations about which the buyer had no knowledge

Page 21: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

Warranty of Title

Sale of Stolen Goods If stolen goods are sold to an innocent

purchaser, the true owner is entitled to return of the goods

The buyer can pursue remedy against the seller for breach of warranty of title

Page 22: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

Full Warranty

A full warranty requires that the defective product be repaired or replaced for free within a reasonable length of time after complaint is made. If the product cannot be fixed, the

consumer has the option to get their money refunded.

Have you ever tried to return merchandise that you thought was under warranty but was not?

Page 23: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

Limited Warranty

A limited warranty provides a restricted guarantee. Must state “Limited” Warranty Be sure to read and understand the

limits of the warranty before purchasing…caveat emptor!

Page 24: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

Limited Warranty

Caveat Emptor - Latin for “Buyer Beware” It is the duty of the consumer to make

informed decisions. Be sure to read labels and research

products before buying. Comparison shop. It is the duty of the seller to provide

appropriate information for the consumer.

Page 25: BB30 Business Law 6.01Summer 2013 6.01 Understand sales law

BB30 Business Law 6.01Summer 2013

Limited Warranty

Caveat Venditor - Latin for “Seller Beware” It is the duty of the seller to make informed

decisions. Example: Banks, credit card companies and

businesses who extend credit to customers check credit histories and applications before extending credit.