Business Law in Practice Quiz
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Questions and Answers

Title for the goods in a sale typically transfers to the buyer before payment is made.

False (B)

Implied conditions and warranties do not significantly affect sale of goods transactions.

False (B)

Salish Sea Natural Products Limited has yet to launch any products in the Sea Goddess line.

False (B)

The business strategy of SSNP is focused solely on local markets within British Columbia.

<p>False (B)</p> Signup and view all the answers

Standard shipping terms are irrelevant to risk management in sale of goods.

<p>False (B)</p> Signup and view all the answers

The positive feedback from spas and salons guarantees the success of SSNP’s new product line.

<p>False (B)</p> Signup and view all the answers

Tabitha Joe wants to ensure that purchase and sale contracts with her customers are properly structured.

<p>True (A)</p> Signup and view all the answers

SSNP’s products are packaged in regular plastic packaging to attract consumers.

<p>False (B)</p> Signup and view all the answers

The Sale of Goods Act of 1893 reformed the common law of the time significantly.

<p>False (B)</p> Signup and view all the answers

Implied terms in the Sale of Goods Act apply by default unless explicitly excluded by the parties.

<p>True (A)</p> Signup and view all the answers

The Sale of Goods Act does not apply to transactions involving privity of contract.

<p>False (B)</p> Signup and view all the answers

All provinces in Canada have identical statutes based on the Sale of Goods Act.

<p>False (B)</p> Signup and view all the answers

A salon chain that has excluded the Sale of Goods Act in a contract can still rely on its implied terms.

<p>False (B)</p> Signup and view all the answers

Consumer transactions often prevent the exclusion of implied terms under provincial legislation.

<p>True (A)</p> Signup and view all the answers

Only express terms agreed upon at the time of the contract are considered valid in a sale of goods transaction.

<p>False (B)</p> Signup and view all the answers

In Example 2, the consumer purchased the product from a retail store rather than online.

<p>False (B)</p> Signup and view all the answers

The exclusion of the Sale of Goods Act is effective for consumer transactions.

<p>False (B)</p> Signup and view all the answers

Caveat emptor implies that buyers should take care of themselves before purchasing.

<p>True (A)</p> Signup and view all the answers

The Sale of Goods Act applies to the sale of services as defined in the provided content.

<p>False (B)</p> Signup and view all the answers

Under the Sale of Goods Act, hair dye is considered a good.

<p>True (A)</p> Signup and view all the answers

In commercial transactions, the Sale of Goods Act also applies to licenses for software.

<p>False (B)</p> Signup and view all the answers

A cooked meal served at a restaurant is classified as a provision of services rather than a sale of goods.

<p>False (B)</p> Signup and view all the answers

The terms of the Sale of Goods Act cannot be excluded or varied in consumer sales.

<p>True (A)</p> Signup and view all the answers

Intangible personal property such as intellectual property is covered by the Sale of Goods Act.

<p>False (B)</p> Signup and view all the answers

The contract stipulated that Pine Valley had the right to test the soil before it was shipped.

<p>True (A)</p> Signup and view all the answers

Pine Valley was required to pay Earthco for every soil test conducted under the contract, regardless of whether it was necessary.

<p>False (B)</p> Signup and view all the answers

The soil composition provided by Earthco matched the original sample of R Topsoil used in the initial approval.

<p>False (B)</p> Signup and view all the answers

Pine Valley did not exercise its testing right due to the lack of time constraints imposed by the City.

<p>False (B)</p> Signup and view all the answers

Earthco was held liable for supplying soil that did not match the contract description.

<p>False (B)</p> Signup and view all the answers

Specific goods are goods that are not yet in existence at the time the contract is entered into.

<p>False (B)</p> Signup and view all the answers

The trial judge's decision was ultimately in favor of Pine Valley.

<p>False (B)</p> Signup and view all the answers

The contract with Earthco included a provision allowing Pine Valley to approve the soil quality at their expense.

<p>True (A)</p> Signup and view all the answers

Unascertained goods are goods that have not yet been set aside and identified as being the subject matter of a contract.

<p>True (A)</p> Signup and view all the answers

Pine Valley was required to replace the soil after the City's testing revealed its inadequacy.

<p>True (A)</p> Signup and view all the answers

The property in specific goods passes to the buyer when the contract is made, regardless of payment or delivery time.

<p>True (A)</p> Signup and view all the answers

Future goods can include items that are currently in existence and can be purchased immediately.

<p>False (B)</p> Signup and view all the answers

If a seller must perform actions on specific goods to make them deliverable, ownership passes to the buyer only after those actions are completed.

<p>True (A)</p> Signup and view all the answers

Risk of loss in specific goods remains with the seller even after the contract is made.

<p>False (B)</p> Signup and view all the answers

A customer purchasing a display television in a store is buying a specific good.

<p>False (B)</p> Signup and view all the answers

The passage of title for specific goods can occur even if the delivery occurs at a later date.

<p>True (A)</p> Signup and view all the answers

SSNP owns the goods if the return period has not yet expired and no acceptance was signified.

<p>True (A)</p> Signup and view all the answers

The property of unascertained goods passes to the buyer once the seller has set them aside and notified the buyer.

<p>True (A)</p> Signup and view all the answers

Aura Spa was required to bear the loss of its products damaged due to the flood.

<p>False (B)</p> Signup and view all the answers

The email notification from SSNP was not necessary for the title to pass to Upscale Salons.

<p>False (B)</p> Signup and view all the answers

If a seller takes steps to appropriate goods for a buyer without notifying them, the title automatically passes.

<p>False (B)</p> Signup and view all the answers

For specific goods, the title passes to the buyer immediately upon the seller's acceptance of the order.

<p>False (B)</p> Signup and view all the answers

SSNP destroyed the products of Upscale Salons after verifying their readiness for pick-up.

<p>True (A)</p> Signup and view all the answers

Once the property of goods is assigned to a buyer, the risk of damage immediately transfers to the seller.

<p>False (B)</p> Signup and view all the answers

Flashcards

Sale of Goods Legislation

Laws that govern the terms and rules for selling and transferring ownership of goods. This includes implied guarantees and responsibilities of traders.

Implied Conditions & Warranties

Guarantees in a sales agreement, not specifically stated but understood in a sale— for instance, goods are of acceptable quality and fit for the purpose.

Standard Shipping Terms

Pre-defined shipping guidelines in contracts that allocate risks and duties (delivery, insurance).

Title Transfer

Point in the sales process when ownership of a product formally changes from seller to buyer. Crucial for liability and risk allocation.

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Breach of Contract (Sale of Goods)

Failure to fulfill agreements made in a sales contract, resulting in a legal recourse for the harmed party.

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Purchase and Sale Contracts

Formal agreements that outline the specifics of a sales transaction (price, delivery, payment terms).

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Risk Management (Sales)

Identifying and mitigating potential issues (like defects, damage) within a sales transaction, protecting both vendor and customer.

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Negotiating Sales Contracts

Process of discussing and agreeing upon the specifics of a contractual agreement for a sale— price, timeline, liabilities (e.g. product defects, damage).

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Sale of Goods Act (1893)

English legislation that summarizes, rather than reforms, the common law of the sale of goods, implying terms into sales contracts unless otherwise agreed by the parties.

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Implied terms

Terms automatically part of a sale of goods contract unless specifically excluded by the parties.

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Privity of contract

The legal relationship between the customer and the seller that must exist for the Sale of Goods Act to apply to a sale transaction.

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Consumer transaction

A sale between a non-business consumer and a business, may have specific limitations around excluding implied terms within the Sale of Goods Act.

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Express terms

Terms explicitly agreed upon by the parties in a sale contract, overriding implied terms if they conflict.

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Exclusion

The act of deliberately preventing the Sale of Goods Act from applying to a specific sale contract

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Sale of Goods Legislation (Canada)

Provincial laws in Canada, based on the 1893 English law, governing the sale of goods, except in Quebec.

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Contract Law

The legal framework governing agreements between parties, and how it affects the sale of goods.

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Caveat Emptor

The legal principle that buyers are expected to take responsibility for inspecting goods and understanding the risks associated with a purchase.

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Sale of Goods Act

A law that governs the conditions and rules for transferring ownership of goods in a sale, including implied guarantees and responsibilities of sellers.

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Implied Warranty (Goods)

A guarantee, not explicitly mentioned in the contract, that goods will be fit for their intended purpose and meet acceptable quality standards.

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What does 'Goods' mean?

Tangible, movable personal property, including things attached to land if they can be removed. This does not include land, buildings, services, or intangible assets like intellectual property.

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What is the difference between a sale of goods and the provision of services?

A 'sale of goods' involves transferring ownership of a tangible product, while the 'provision of services' involves providing labor or expertise.

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What kind of contract is a restaurant meal considered?

A restaurant meal is considered a 'sale of goods' because it primarily involves the transfer of tangible food.

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Excluding the Sale of Goods Act

Contracts may attempt to exclude the applicability of the Sale of Goods Act, but these exclusions are often ineffective when a consumer is involved.

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How does the Sale of Goods Act protect Consumers?

It ensures consumers are not bound by unfair terms that attempt to exclude fundamental protections like implied warranties.

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SGA Implied Condition

A legal guarantee that goods sold by description will match the description in a contract.

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Exclusionary Clauses

Contract terms that limit or remove a party's liability for certain events or consequences.

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Waiver of Testing

When a buyer chooses not to inspect goods before accepting delivery, they take on the risk of any defects.

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Soil Composition

The specific mixture of sand, silt, and clay in soil, impacting its drainage properties.

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Dry Pond

A pond designed to collect excess water runoff, helping control flooding.

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Testing in Contract

Contract clauses specifying the right and responsibility for inspecting goods before delivery.

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Liability for Defects

Who is responsible for problems with goods sold - the buyer or the seller?

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Court Overruled

When an appeal court disagrees with a lower court's decision, changing the original ruling.

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Specific Goods

Goods that exist and are identified at the time of contract formation. They can be specifically pointed to and identified.

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Unascertained Goods

Goods not yet set aside and identified as the subject of the contract, like a generic product from a larger batch.

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Future Goods

Goods that don't exist yet but will be produced in the future, like a pre-order item.

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Rule 1: Property Passes at Contract Formation

When specific goods are in a deliverable state, ownership transfers to the buyer upon contract formation, regardless of payment or delivery timing.

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Rule 2: Property Passes After Seller's Action

If the seller must do something to make specific goods ready for delivery, ownership only transfers after completion and buyer notification.

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Example: ABC Discounter (Rule 1)

ABC buys 200 specific packages of goods, pays in full, and goods are set aside. A fire destroys the goods before delivery. ABC bears the loss because ownership transferred at contract formation.

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Deliverable State

Goods are in a condition ready for delivery to the buyer, according to the contract terms.

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Proper Rule Application

It's crucial to identify whether goods are specific, unascertained, or future goods to apply the correct ownership transfer rule.

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Appropriation of Goods

The process of selecting and setting aside specific goods from a larger stock to fulfill a particular contract. This is crucial for transferring ownership, as it links the goods to the contract.

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Assent to Appropriation

Agreement of the both buyer and seller to the specific selection of goods for the contract. It can be expressed explicitly or implied by actions.

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Title Passing

The legal moment when ownership of goods transfers from seller to buyer. This point determines who bears the risk of loss or damage to the goods.

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Risk of Loss

The responsibility for any damage or loss to the goods after the contract is formed. Generally, ownership coincides with the allocation of risk.

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Unconditional Appropriation

When goods are definitively set aside for a contract without any conditions or contingencies. The buyer has final approval of the selection.

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Express Assent

Clear and explicit approval of the buyer or seller to the appropriation of goods. It can be written, verbal, or implied by actions.

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Implied Assent

Assent to appropriation that is inferred from actions or conduct. For instance, the buyer picking up the designated goods.

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Study Notes

Business Law in Practice

  • Salish Sea Natural Products Limited (SSNP) is a natural hair and beauty products company owned by Tabitha Joe.
  • The company manufactures products from locally sourced natural ingredients.
  • The company's "Sea Goddess" line includes temporary hair colorants.
  • The products are packaged with designs by local artists in biodegradable containers.
  • SSNP wants to ensure proper purchase and sale contracts are in place before manufacturing larger quantities.

Introduction

  • The sale of goods is governed by laws and regulations, including contract and tort law.
  • Key objectives of sales laws include protecting parties (particularly buyers), consumers, and promoting a fair marketplace.
  • The laws relating to these objectives are discussed in the related chapters.
  • Examples of legal issues covered include: the sale of goods contract, the impact of sale of goods legislation, the implied terms within the sale of goods contact, ownership and risk transfer during a sale, and remedies available for breached sales contracts.

The Sale of Goods

  • The sale of goods is important to Canada's economy.
  • The contract of sale is the legal foundation for sales transactions.
  • Key aspects of sales contracts include terms of the sale, the transfer of ownership, payment, delivery, and remedies for contract breach.
  • Common law expectations: Buyers expect goods to be safe and properly manufactured for their intended use, which may require additional contract terms.

Sale of Goods Legislation

  • English judges in the 1800s created the basic principles of sale of goods law.
  • In response to the harshness of caveat emptor, laws developed common-law rules that implied terms into contracts, including, but not limited to, goods corresponding to description, reasonable quality, and transfer of ownership.
  • The Sale of Goods Act of 1893 provided a uniform framework for sales legislation, adopted in all Canadian provinces except Québec.

Implied Terms - Conditions and Warranties

  • Conditions: Allow the buyer to repudiate a contract, return goods, and receive a refund; or proceed under contract and sue for damages.
  • Warranties: Provide a remedy solely through damages.
  • Implied conditions include: Seller has the right to sell the goods, reasonably fit for their intended use, of merchantable quality, correspond to sample, and by description.

Quiz Questions and Answers

  • (Page 5):*
  • Question 23.1: Correct choice is caveat emptor.
  • (Page 6):*
  • **Question 23.3: ** Correct choice is that Sale of Goods Acts contain implied terms that may vary from province to province.
  • (Page 6):*
  • Question 23.2: The correct answer is c, She cannot take action under the Sale of Goods Act because Grundy provided a service, not a good.
  • (Page 7):*
  • Question 23.4: The correct answer is a, a reasonable quality, considering the description of the goods.
  • (Page 8):*
  • Question 23.5: Correct answer is b, The goods will match the seller’s description
  • (Page 8):*
  • Question 23.7: The correct answer is breach of implied term.
  • (Page 11 to 17):* Additional quiz questions from the book.
  • (Page 21 to 24):* Additional quiz questions from the book related to transfer of title.
  • (Page 26 to end):* Chapter summary covering topics like remedies for breach of contract and key terms.

International Perspective 23.1

  • In international trade, standardized shipping terms are important for clear communication (Incoterms).
  • The United Nations Commission on International Trade Law (UNCITRAL)'s Convention on the International Sale of Goods (CISG) is a key agreement.
  • The CISG applies to business-to-business contracts for goods but not for services or technology, leases, or goods for personal use.

Shipping Terms

  • Business uses standardized terms for delivery and payment (e.g. FOB, CIF, COD).
  • Bills of lading are contracts between sellers and carriers. These outline delivery terms and liabilities.

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Chapter 23: The Sale of Goods PDF

Description

Test your understanding of business law principles as they apply to the sale of goods. This quiz covers topics such as contract law, consumer protection, and the legal implications for companies like Salish Sea Natural Products Limited. Enhance your knowledge of the regulations that govern marketplace transactions.

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