buslaw16-title and risk of loss in sales of goods

8/9/2019 Buslaw16-Title and Risk of Loss in Sales of Goods

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1. Contrast voidable title with void title.

2. Discuss the rights of the parties when

goods that are entrusted to merchants are

sold to others in the ordinary course of business.

3. Determine, in a given case, when title to

goods passes from the seller to the buyer.

TITLE AND RISK OF LOSS IN

SALES OF GOODS

Chapter Outcomes:

Chapter 16



4. Decide, in different situations, whether thebuyer or the seller of goods must bear the

risk of loss.

5. Compare a sale on approval with a sale or

return.6. Describe when buyers and sellers of

goods have insurable interests in those

goods.

TITLE AND RISK OF LOSS IN

SALES OF GOODS

Chapter Outcomes (continued):

Chapter 16



Void and Voidable Title

Void Title

Voidable Title

Entrusting Goods to a Merchant

1616--11



LawLINKS

Chapter 16Chapter 16

Learn about a bill of sale by

going to

http://www.smartagreements.com

From the alphabetical listing of all Smart Agreements, select #14

Bill of Sale.



1616--11

1. Void t i tle means title that may voided if

the injured party elects to do so.

Topic Quiz

FALSE

Answer the following true/false questions:

It means there is no title at all!



1616--11

2. Void able t i tle means no title at all.

Topic Quiz

FALSE


It means the title may be voided if the

injured party elects to do so.



1616--11

3.The reason for the law givinggood title to people who buy

entrusted goods from

merchants is to give confidenceto people in the marketplace.

Topic Quiz

TRUE




A Question of Ethics


How would you defend the rule of law

exemplified in Example 16-3 from an

ethical point of view?



The Passage of Title and

Risk of Loss

1616--22

Shipment Contracts

Destination Contracts

No Delivery Required

Fungible Goods



The Passage of Title and

Risk of Loss (continued)

1616--22

Documents of Title

Agreement of the Parties

Revesting of Title in Seller

International Sales



LawLINKS


Read more about shipping terms

by going to:

http://www.smartagreements.com

First, click Business Law Topics,

then click Shipping Terms--Risk

of Loss.



1616--22

1. With a few exceptions,

whoever has title to goods also

bears the risk of loss.

Topic Quiz

TRUE




1616--22

2. When a contract calls for a

non-merchant buyer to pick upthe goods so that no delivery is

required, the risk of loss passes

to the buyer when the contractis made.

Topic Quiz

TRUE




1616--22

3. Fungible goods must be separated from

the bulk before title to them can pass toa buyer.

Topic Quiz

FALSE


They do not need to be separated.



Sales with Right of Return

1616--33

Sale on Approval

Sale or Return



1616--33

1. Goods that are sold on appr oval are

subject to the claims of the buyer¶s

creditors until the buyer decides to

accept them.

Topic Quiz

FALSE


They are not subject to the claims.



1616--33

2. Goods that are sold on appr oval remain the property

of the seller until the buyer¶s

approval has been expressed.

Topic Quiz

TRUE




1616--33

3. Goods that are sold on sale or retur n are

not subject to the claims of the buyer¶screditors.

Topic Quiz

FALSE


They are subject to the claims.



Insurable Interests

1616--44

People must have an insurableinterest in property to be able

to place insurance on it.



1616--11 Anyone with void title to goods, such as athief, can never give good title to another

person.

With few exceptions, such as when goodsare to be picked up by the buyer, whoever

has title to the goods bears the risk of loss.

1616--22

Goods sold on approval remain the

property of the seller until the buyer¶s

approval is expressed.

1616--33

SUMMARY



1616--44 Buyers have an insurable interest in goods the

moment a contract is made and the goods are

identified to the contract.

SUMMARY(continued)




Key Terms bill of sale c.f.

c.i.f. c.o.d.

destination contract document of title

f.a.s. vessel f.o.b.

f.o.b. the place of destination f.o.b. the place of shipment

fungible goods identified goods

insurable interest sale on approvalsale or return shipment contract

tender title

voidable title void title



Investigating on the Internet

Information about the UN Convention

on Contracts for the International Sale

of Goods (CISG) can be found at

http://www.ita.doc.gov/legal/cisg.html

Although the CISG follows the UCCrather closely, there are some

differences. In your notebook. list five

differences between the two laws.




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