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Questions and Answers
Title for the goods in a sale typically transfers to the buyer before payment is made.
Title for the goods in a sale typically transfers to the buyer before payment is made.
False
Implied conditions and warranties do not significantly affect sale of goods transactions.
Implied conditions and warranties do not significantly affect sale of goods transactions.
False
Salish Sea Natural Products Limited has yet to launch any products in the Sea Goddess line.
Salish Sea Natural Products Limited has yet to launch any products in the Sea Goddess line.
False
The business strategy of SSNP is focused solely on local markets within British Columbia.
The business strategy of SSNP is focused solely on local markets within British Columbia.
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Standard shipping terms are irrelevant to risk management in sale of goods.
Standard shipping terms are irrelevant to risk management in sale of goods.
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The positive feedback from spas and salons guarantees the success of SSNP’s new product line.
The positive feedback from spas and salons guarantees the success of SSNP’s new product line.
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Tabitha Joe wants to ensure that purchase and sale contracts with her customers are properly structured.
Tabitha Joe wants to ensure that purchase and sale contracts with her customers are properly structured.
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SSNP’s products are packaged in regular plastic packaging to attract consumers.
SSNP’s products are packaged in regular plastic packaging to attract consumers.
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The Sale of Goods Act of 1893 reformed the common law of the time significantly.
The Sale of Goods Act of 1893 reformed the common law of the time significantly.
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Implied terms in the Sale of Goods Act apply by default unless explicitly excluded by the parties.
Implied terms in the Sale of Goods Act apply by default unless explicitly excluded by the parties.
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The Sale of Goods Act does not apply to transactions involving privity of contract.
The Sale of Goods Act does not apply to transactions involving privity of contract.
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All provinces in Canada have identical statutes based on the Sale of Goods Act.
All provinces in Canada have identical statutes based on the Sale of Goods Act.
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A salon chain that has excluded the Sale of Goods Act in a contract can still rely on its implied terms.
A salon chain that has excluded the Sale of Goods Act in a contract can still rely on its implied terms.
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Consumer transactions often prevent the exclusion of implied terms under provincial legislation.
Consumer transactions often prevent the exclusion of implied terms under provincial legislation.
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Only express terms agreed upon at the time of the contract are considered valid in a sale of goods transaction.
Only express terms agreed upon at the time of the contract are considered valid in a sale of goods transaction.
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In Example 2, the consumer purchased the product from a retail store rather than online.
In Example 2, the consumer purchased the product from a retail store rather than online.
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The exclusion of the Sale of Goods Act is effective for consumer transactions.
The exclusion of the Sale of Goods Act is effective for consumer transactions.
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Caveat emptor implies that buyers should take care of themselves before purchasing.
Caveat emptor implies that buyers should take care of themselves before purchasing.
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The Sale of Goods Act applies to the sale of services as defined in the provided content.
The Sale of Goods Act applies to the sale of services as defined in the provided content.
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Under the Sale of Goods Act, hair dye is considered a good.
Under the Sale of Goods Act, hair dye is considered a good.
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In commercial transactions, the Sale of Goods Act also applies to licenses for software.
In commercial transactions, the Sale of Goods Act also applies to licenses for software.
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A cooked meal served at a restaurant is classified as a provision of services rather than a sale of goods.
A cooked meal served at a restaurant is classified as a provision of services rather than a sale of goods.
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The terms of the Sale of Goods Act cannot be excluded or varied in consumer sales.
The terms of the Sale of Goods Act cannot be excluded or varied in consumer sales.
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Intangible personal property such as intellectual property is covered by the Sale of Goods Act.
Intangible personal property such as intellectual property is covered by the Sale of Goods Act.
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The contract stipulated that Pine Valley had the right to test the soil before it was shipped.
The contract stipulated that Pine Valley had the right to test the soil before it was shipped.
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Pine Valley was required to pay Earthco for every soil test conducted under the contract, regardless of whether it was necessary.
Pine Valley was required to pay Earthco for every soil test conducted under the contract, regardless of whether it was necessary.
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The soil composition provided by Earthco matched the original sample of R Topsoil used in the initial approval.
The soil composition provided by Earthco matched the original sample of R Topsoil used in the initial approval.
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Pine Valley did not exercise its testing right due to the lack of time constraints imposed by the City.
Pine Valley did not exercise its testing right due to the lack of time constraints imposed by the City.
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Earthco was held liable for supplying soil that did not match the contract description.
Earthco was held liable for supplying soil that did not match the contract description.
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Specific goods are goods that are not yet in existence at the time the contract is entered into.
Specific goods are goods that are not yet in existence at the time the contract is entered into.
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The trial judge's decision was ultimately in favor of Pine Valley.
The trial judge's decision was ultimately in favor of Pine Valley.
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The contract with Earthco included a provision allowing Pine Valley to approve the soil quality at their expense.
The contract with Earthco included a provision allowing Pine Valley to approve the soil quality at their expense.
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Unascertained goods are goods that have not yet been set aside and identified as being the subject matter of a contract.
Unascertained goods are goods that have not yet been set aside and identified as being the subject matter of a contract.
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Pine Valley was required to replace the soil after the City's testing revealed its inadequacy.
Pine Valley was required to replace the soil after the City's testing revealed its inadequacy.
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The property in specific goods passes to the buyer when the contract is made, regardless of payment or delivery time.
The property in specific goods passes to the buyer when the contract is made, regardless of payment or delivery time.
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Future goods can include items that are currently in existence and can be purchased immediately.
Future goods can include items that are currently in existence and can be purchased immediately.
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If a seller must perform actions on specific goods to make them deliverable, ownership passes to the buyer only after those actions are completed.
If a seller must perform actions on specific goods to make them deliverable, ownership passes to the buyer only after those actions are completed.
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Risk of loss in specific goods remains with the seller even after the contract is made.
Risk of loss in specific goods remains with the seller even after the contract is made.
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A customer purchasing a display television in a store is buying a specific good.
A customer purchasing a display television in a store is buying a specific good.
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The passage of title for specific goods can occur even if the delivery occurs at a later date.
The passage of title for specific goods can occur even if the delivery occurs at a later date.
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SSNP owns the goods if the return period has not yet expired and no acceptance was signified.
SSNP owns the goods if the return period has not yet expired and no acceptance was signified.
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The property of unascertained goods passes to the buyer once the seller has set them aside and notified the buyer.
The property of unascertained goods passes to the buyer once the seller has set them aside and notified the buyer.
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Aura Spa was required to bear the loss of its products damaged due to the flood.
Aura Spa was required to bear the loss of its products damaged due to the flood.
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The email notification from SSNP was not necessary for the title to pass to Upscale Salons.
The email notification from SSNP was not necessary for the title to pass to Upscale Salons.
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If a seller takes steps to appropriate goods for a buyer without notifying them, the title automatically passes.
If a seller takes steps to appropriate goods for a buyer without notifying them, the title automatically passes.
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For specific goods, the title passes to the buyer immediately upon the seller's acceptance of the order.
For specific goods, the title passes to the buyer immediately upon the seller's acceptance of the order.
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SSNP destroyed the products of Upscale Salons after verifying their readiness for pick-up.
SSNP destroyed the products of Upscale Salons after verifying their readiness for pick-up.
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Once the property of goods is assigned to a buyer, the risk of damage immediately transfers to the seller.
Once the property of goods is assigned to a buyer, the risk of damage immediately transfers to the seller.
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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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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.
