Exam 13: Special Contracts: Sale of Goods

There is a common element to the seller's right to exercise a lien,a stoppage in transit,or a repossession.In each case,the remedy is available only if the buyer is insolvent or bankrupt.

If goods are sold by both description and sample,the goods must

The Sale of Goods Act implies a term that goods will match their description.Which of the following statements is TRUE with respect to that term?

Which of the following statements is TRUE as a general rule?

Shasta contractually agreed to purchase a crystal vase from Status Home Furnishings.However,before she was able to take possession of it,and while it was still in the store,the crystal vase fell to the ground and shattered beyond repair as a result of a small earthquake.Which of the following statements is TRUE?

Hamish entered into a contract with Shania.Under the terms of that agreement,she was required to deliver a widget to his factory within one week.As payment for that widget,Hamish immediately gave Shania a cheque for $5000 and a used widget that he no longer required.Shania intended to re-calibrate that widget and sell it to another customer for $1000.A dispute has arisen between the parties.Hamish argues that the agreement is governed by the Sale of Goods Act.Shania disagrees and in support of her position,she points to a section in the statute that says that the buyer must provide "a money consideration,called the price." And,as she reminds Hamish,he did not give any cash to her.Is the parties' contract governed by the Sale of Goods Act? Explain your answer.

The passing of property under the Sale of Goods Act is important for a variety of reasons.Identify and explain the most important of those reasons.

Which of the following statements is TRUE with respect to the implied condition of merchantability?

Lalene agreed to purchase a specific vehicle from Ritooria Motors.Under the terms of that contract,Lalene immediately provided a cheque for $10 000 and promised to pay another $15 000 within one year.Ritooria promised to prepare the car for delivery within one week (by installing a CD player and adding new tires)and to call Lalene when the work was done.Ritooria cashed the cheque the next day and prepared the car as promised within one week.Before it contacted Lalene,however,the car was struck by lightning and completely destroyed.Unfortunately,neither party had insurance on the car.Ritooria insists that it is still entitled to receive another $15 000 from Lalene.She,in contrast,insists that she is entitled to a refund of the $10 000 that she previously paid.Which party is probably correct? Explain your answer.

The Sale of Goods Act may apply if you agree to

Lucy sells bulk foods to restaurants.Jean-Paul visited her warehouse and indicated that he wanted to buy a barrel of peanuts for use at his diner,the Healthy Nut.Lucy went into a back room and returned with a small bag of unsalted peanuts.Jean-Paul agreed to buy a barrel of the same.Lucy went to a back room again and returned with a sealed barrel of peanuts.She asked Jean-Paul if he wanted to inspect the goods,but he said,"No,I'm in too much of a hurry.Just have them delivered to my restaurant this afternoon." The barrel was delivered,but when Jean-Paul opened it,he discovered that the peanuts were salted.He therefore insists that he is entitled to reject them.Which of the following statements is TRUE?

Crystal purchased a specific,fully functioning widget from Husker Du Inc.She promised to pay the price of $10 000 within one month.As part of a promotional campaign,Husker Du agreed to deliver the widget to her factory for free.Husker Du Inc.delays shipping the widget to Crystal's place as it forgets about the order.During that delay Husker Du's employee carelessly left its truck unlocked on the street during his lunch break.The widget was stolen from the truck and has never been recovered.Husker Du nevertheless insists that Crystal had already acquired property in the widget by the time of the theft and that she therefore was required to honour her promise to pay $10 000.Is that argument correct? Did property pass to Crystal? Is she required to pay the price? Explain your answer.

Discuss the significance of a buyer's reasonable opportunity to inspect goods before accepting them.Can a buyer ever be held responsible for failing to use a reasonable opportunity to inspect goods? Can a buyer ever be held responsible for failing to detect a defect while inspecting goods? Explain your answers.

Meena offered to sell a widget to Thor for use in his factory.He hesitated to accept that offer because he was not sure that the widget would be compatible with the rest of his equipment.The parties therefore agreed that Thor would take possession of the widget for the purpose of testing it at his factory.Which of the following statements is TRUE?

The Sale of Goods Act applies only to the sale of goods.Goods include things like cars,cats,and cabbages.Identify and briefly explain three types of property to which the Act does not apply.

Aidan gave a $100 watch to Marian as a birthday present.The watch was made of cheap metal that gave Marian a rash.Which of the following statements is TRUE?

The Sale of Goods Act implies a

Which of the following statements is entirely TRUE with respect to the implied term for a sale by sample and the implied term for description?

Pavel bought a widget from Anna.The widget was both unmerchantable and unfit for its intended purpose.However,if Anna did not normally deal in widgets,Pavel could succeed in a claim on the basis of the widget's lack of merchantability,but not on the basis of its lack of fitness for its intended purpose.

Which of the following transactions would not be decided under the Sale of Goods Act?