Business Law: Sale of Goods Chapter 23

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Questions and Answers

What is the main responsibility of the seller in a transaction involving the sale of goods?

To bear all risk of loss until the goods are delivered

To arrange insurance coverage for the goods sold

To ensure the buyer receives the goods immediately upon payment

To clarify when title and risk are transferred to the buyer (correct)

Under what circumstances will the buyer not automatically gain title to the goods?

If the seller states that payment is required first

If there is an intention to transfer title at a later date (correct)

If the buyer is not yet in possession of the goods

If the goods are delivered before payment is made

What does the phrase 'risk follows title' imply in a sale of goods?

The seller retains risk until payment is complete

The risk is shared equally between buyer and seller

The buyer bears the risk once ownership is transferred (correct)

Ownership guarantees protection from all types of loss

What statutory provisions resolve disputes about when title passes if no agreement was made?

Sale of Goods Act Signup and view all the answers

How can parties best ensure clarity on the transfer of title in a sale?

By writing a clear contract specifying delivery and payment terms Signup and view all the answers

Which of the following is NOT a right conferred by ownership of goods?

The right to recover additional costs from the previous owner Signup and view all the answers

What occurs when there's a disagreement about the timing of title transfer?

The Sale of Goods Act provides a solution Signup and view all the answers

What does it mean to possess goods without holding title?

To have physical control but lack ownership rights Signup and view all the answers

What happens if a seller breaches a contract after the title has passed to the buyer?

The buyer must pay the purchase price and cannot return the goods. Signup and view all the answers

In the event of a breach of warranty, which of the following claims is a buyer entitled to?

Reduce the purchase price due to the breach. Signup and view all the answers

What is the right of repudiation concerning a breach of contract?

It permits termination of the contract and return of goods. Signup and view all the answers

When is it necessary for a seller to mitigate their loss?

When the buyer refuses to accept the goods. Signup and view all the answers

Which statement best describes the difference between conditions and warranties in sales contracts?

Breach of condition allows termination; breach of warranty does not. Signup and view all the answers

What obligation does a seller retain if the buyer breaches a warranty?

They may only claim damages incurred due to the breach. Signup and view all the answers

What determines whether damages or the right to return goods is granted to the innocent party?

The classification of the breached term as a condition or warranty. Signup and view all the answers

In which situation can a buyer return goods after a breach?

When there is a breach of a condition. Signup and view all the answers

What is the significance of identifying whether goods are specific, unascertained, or future in a contract?

It ensures the application of the correct legal rules. Signup and view all the answers

Under which circumstance does the property in specific goods pass to the buyer?

When the contract is formed for goods in a deliverable state. Signup and view all the answers

When do unascertained goods become specific goods in a contract?

Once the goods are manufactured and identified. Signup and view all the answers

What happens if specific goods in a deliverable state are destroyed after a contract is made?

The buyer still holds title and risk of loss. Signup and view all the answers

Which of the following accurately defines future goods in a contract?

Goods that do not exist at the time the contract is entered into. Signup and view all the answers

In a contract for the sale of specific goods that require alterations by the seller, when does the property pass to the buyer?

After the alterations are completed and the buyer is notified. Signup and view all the answers

What would be the buyer's right if specific goods that were agreed upon in a contract are lost before delivery?

The buyer retains the right to payment without requiring the goods. Signup and view all the answers

Which option best describes a seller's obligation regarding goods that need to be made deliverable?

To complete necessary work before the buyer receives the goods. Signup and view all the answers

Study Notes

Chapter 23: The Sale of Goods

Salish Sea Natural Products Limited (SSNP) is a business owned by Tabitha Joe, focused on natural hair and beauty products.
Their product line, "Sea Goddess", consists of temporary hair colorants in various colors.
Products are packaged in eye-catching, biodegradable packaging.
Samples have been sent to spas and salons to generate interest.
Joe's goal is to eventually sell Sea Goddess directly to consumers online.

Business Law in Practice

The sale of goods is influenced by contract and tort law, along with federal and provincial statutes.
These laws protect consumers from harm, ensure a fair market, and prevent unfair selling practices.
Laws related to the sale of goods are discussed in this chapter.

Introduction

The sale of goods is influenced by numerous laws (contract and tort) and regulations.
The main objectives of relevant laws are protecting parties to sales, particularly buyers, protecting consumers from harm, ensuring a fair and competitive market, and preventing unfair selling practices.

The Contract of Sale

The contract of sale is the legal foundation of any sale of goods transaction.
Key aspects to consider include the terms of the contract related to the sale, transfer of ownership, payment, and delivery, and remedies for breaches.

The Common Law

Buyers typically have expectations about goods' characteristics and attributes (like Sea Goddess being properly manufactured and safe.)
The historic common law principle "caveat emptor" ("let the buyer beware") implied buyers take responsibility for assessing goods before purchase.
However, judges later developed principles that better protected consumers and formalized them in sale of goods statutes.

Sale of Goods Legislation

Sale of Goods Act laws, in most areas of Canada, are based on England's 1893 legislation.
The legislation implied terms into every sale of goods transaction (unless terms were explicitly changed), concerning transfer of ownership, and risk of damage or loss.
Provinces may vary specific conditions or exclude such terms, especially for consumer transactions.
For the Sale of Goods Act to apply, a direct contract between the buyer and the seller must exist.

Implied Terms-Conditions and Warranties

Conditions and warranties are different types of implied terms in a sale of goods contract.
Breach of a condition gives the innocent party the option of repudiation (rejecting the contract) or pursuing a lawsuit after retaining the goods.
Implied terms include the seller's right to sell, the goods' merchantability, fitness for purpose, and correspondence with samples or descriptions.

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Description

This quiz covers Chapter 23, focusing on the sale of goods as it pertains to business law practices. It discusses the influence of contract and tort laws on consumer protection and market fairness. Test your knowledge on legal principles affecting businesses like Salish Sea Natural Products Limited.