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6.01 Understand sales law

6.01 Understand sales law. SALES LAW & EXCHANGE OF OWNERSHIP. Sales Activity List 5 items you bought in the last week. List 2 “large” purchases your family has made in the last 2 years. SALES LAW & EXCHANGE OF OWNERSHIP. Using the list of the items in the Sales Activity:

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6.01 Understand sales law

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  1. BB30 Business Law 6.01 Summer 2013 6.01 Understand sales law

  2. SALES LAW & EXCHANGE OF OWNERSHIP Sales Activity • List 5 items you bought in the last week. • List 2 “large” purchases your family has made in the last 2 years. BB30 Business Law 6.01 Summer 2013

  3. SALES LAW & EXCHANGE OF OWNERSHIP Using the list of the items in the Sales Activity: • Did ALL of those constitute a sale? • What is the definition of a sale? • What did you do with the product? • What is the definition of ownership? • Were they goods or services? • Did money exchange hands for these items? • If you didn’t have the money to buy the item, how could you change ownership? BB30 Business Law 6.01 Summer 2013

  4. SALES LAW & EXCHANGE OF OWNERSHIP E-commerce laws • E-commerce – conducting business using electronic means, especially the Internet • Jurisdictional issues – which state has jurisdiction in cases involving sellers & buyers in different states? • The ability to access a website in a particular state does not, by itself, give that state jurisdiction • States may gain jurisdiction over e-commerce transactions if the website allows users to purchase merchandise • Example: Amazon.com - jurisdiction lies with the state in which the buyer resides • Tax issues – jurisdiction helps to determine which state may tax Internet sites, and how buyer may be taxed • Authentication – helps to make certain that buyers and sellers are who they say they are • Digital signature – encoded message that appears at the end of a contract created online BB30 Business Law 6.01 Summer 2013

  5. UNIFORM COMMERCIAL CODE • Group Activity: • Create a one page summary of the UCC. • Include: • General Information (First published, definition, goal/purpose) • Specific Information (leasing goods, contracts for goods/services, special rules) • Why is it important? BB30 Business Law 6.01 Summer 2013

  6. TRANSFER OF OWNERSHIP • Payment vs. Delivery vs. Receipt of Goods • What is the proof? • Vendor vs. Vendee vs. Merchant vs. Casual Seller • Unconscionable Contract vs. Statute of Frauds BB30 Business Law 6.01 Summer 2013

  7. TRANSFER OF OWNERSHIP Authorized Person vs. Buyers in a Sale Induced by Fraud vs. Holders of Negotiable Instruments vs. Merchants with Possession of Sold Goods BB30 Business Law 6.01 Summer 2013

  8. TRANSFER OF OWNERSHIP Existing Goods vs. Identified Goods vs. Future Goods BB30 Business Law 6.01 Summer 2013

  9. When does ownership transfer? BB30 Business Law 6.01 Summer 2013

  10. RISK OF LOSS When does risk of loss transfer? You purchase a used car on autotrader.com from a dealer in Atlanta. While the car is being driven to North Carolina it slides off the road and is damaged. What is type delivery terms will protect you in this transaction? BB30 Business Law 6.01 Summer 2013

  11. RISK OF LOSS BB30 Business Law 6.01 Summer 2013

  12. WARRANTIES • Express • Implied • Warranty of Title • Exclusions BB30 Business Law 6.01 Summer 2013

  13. Express Warranty Express warranty is also called a guarantee • The promise or assurance of the quality or life of a product • “Guaranteed satisfaction or your money back” • “Lifetime guarantee” BB30 Business Law 6.01 Summer 2013

  14. Express Warranty • Can be oral or written • Written form recommended • Parol evidence rule applies: evidence of oral statements made before signing a written contract cannot be presented in court to change or add to the terms of that written agreement • Magnuson-Moss Act – requires that written warranties be labeled as full or limited BB30 Business Law 6.01 Summer 2013

  15. Express Warranty • Pufferyby salesman is not a warranty, but an opinion of the salesperson. • Express warranties are created by: • Statement of fact or promise by seller • Description of goods • Use of same item or model BB30 Business Law 6.01 Summer 2013

  16. Implied Warranty A guarantee of quality imposed by law but not in writing • Implied warranty deals with sale of goods • Regulated by UCC • Given by all sellers BB30 Business Law 6.01 Summer 2013

  17. Implied Warranties • Warranty of fitness for a particular purpose • Seller knows the purpose for which goods are needed • Seller advises buyer in making purchase • Buyer relies on seller’s advice to make decision • Seller infers that the goods are fit for a particular purpose • A warranty exists BB30 Business Law 6.01 Summer 2013

  18. Implied Warranties • Warranty of Merchantability • Given by a merchant only • Merchant infersthat goods pass in the trade without objection • Goods are fit for the ordinary purpose such goods are used for • Conform to any promises or statements made on the container or label BB30 Business Law 6.01 Summer 2013

  19. Implied Warranties Usage of Trade An implied warranty that is a well established custom or practice among people in specific trades or businesses • Example: When a person sells a thoroughbred horse there is an implied warranty that papers are provided to prove the animal’s pedigree as a thoroughbred.It is expected in the horse trading business BB30 Business Law 6.01 Summer 2013

  20. Warranty of Title Seller warrants that the title is good and transfer is rightful Seller warrants that goods will be delivered free of any financial obligations about which the buyer had no knowledge BB30 Business Law 6.01 Summer 2013

  21. Warranty of Title • Sale of Stolen Goods • If stolen goods are sold to an innocent purchaser, the true owner is entitled to return of the goods • The buyer can pursue remedy against the seller for breach of warranty of title BB30 Business Law 6.01 Summer 2013

  22. Full Warranty A full warranty requires that the defective product be repaired or replaced for freewithin a reasonable length of time after complaint is made. • If the product cannot be fixed, the consumer has the option to get their money refunded. • Have you ever tried to return merchandise that you thought was under warranty but was not? BB30 Business Law 6.01 Summer 2013

  23. Limited Warranty A limited warranty provides a restricted guarantee. • Must state “Limited” Warranty • Be sure to read and understand the limits of the warranty before purchasing…caveat emptor! BB30 Business Law 6.01 Summer 2013

  24. Limited Warranty Caveat Emptor - Latin for “Buyer Beware” • It is the duty of the consumer to make informed decisions. • Be sure to read labels and research products before buying. Comparison shop. • It is the duty of the seller to provide appropriate information for the consumer. BB30 Business Law 6.01 Summer 2013

  25. Limited Warranty Caveat Venditor - Latin for “Seller Beware” • It is the duty of the seller to make informed decisions. • Example: Banks, credit card companies and businesses who extend credit to customers check credit histories and applications before extending credit. BB30 Business Law 6.01 Summer 2013

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