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Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Legal TerminologyFifth Edition
by
Gordon W. Brown
PowerPoints prepared by Kimberly Lundy
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Chapter 19
Personal Property
and Bailments
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Personal Property
Personal property (also called personalty or chattels) – anything subject to ownership other than real property.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Types of Personal Property
Tangible property – things that have substance and can be touched.
Intangible property (also called a chose in action) – not perceived through the senses, i.e., patents and copyrights.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Types of Personal Property (Cont’d.)
Fixture – personal property attached to real property.
Trade fixture – personal property necessary to carry on a trade or business.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Sale of Goods
The Uniform Commercial Code (UCC) is the law governing commercial transactions. Example: Contracts for the sale of goods.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Sale of Goods
Goods – anything that is moveable. Future goods – goods not yet existing.
Fungible goods – usually sold by weight or measured in units.
Conforming goods – goods in accordance with the contract.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Contract for Sale of Goods (Cont’d.)
Nonconforming goods – goods not in accordance with the contract terms. Seller may cure (correct the defect within
the contract period).
If seller does not cure, buyer has right to cover (buy similar goods and sue for the difference).
Identified goods – specific goods selected as the subject of the contract.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Sales Sale – defined by UCC as the passing
of title (ownership) from seller to buyer for a price. Bill of Sale – written evidence of transfer
of personal property. Contracts to Sell – if title is to pass in the
future. Sale on Approval – if goods are for
buyer’s use and can be returned even if conforming.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Sales (Cont’d.)
Sale or Return – if goods are primarily for resale and may be returned even if conforming.
A gift is not a sale because donee (recipient) pays no price to donor (gift giver).
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Bulk Transfers
Bulk Transfer – disposes of entire stock in one transaction.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Contracts for Goods
Output contract – contract to sell all the goods a company manufactures.
Requirements contract – contract to sell all the goods buyer needs.
Shipment contract – seller turns goods over to a carrier for delivery to buyer. Title and risk of loss (responsibility for damage or
destruction) pass to buyer when goods go to carrier.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Contracts for Goods (Cont’d.)
Shipment contract or f.o.b. place of shipment – free on board (no delivery charge) to place of shipment.
Destination Contract – f.o.b. place of destination. Title and risk of loss pass to buyer when
goods are tendered at destination.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
E-Commerce
Electronic commerce – the buying and selling of goods and services or transfer of money over the Internet.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Warranties
Warranties – guarantees by sellers of goods as to their products.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Express Warranties
Express warranty – seller’s statement of fact or promises about goods. Full warranty – requires seller to repair or
replace defective goods or refund purchase price.
Limited warranty – label required for anything less than a full warranty.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Implied Warranties
Implied warranties – imposed by law. May be excluded by seller if
conspicuously noted. Example: “as-is” sales.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Implied Warranties (Cont’d.) Warranty of merchantability –
warranty by merchant that goods sold will be fit for the ordinary purpose of their use. Merchant – person who sells goods of the
kind sold in the ordinary course of business or who has knowledge or skills peculiar to those goods.Not given by private parties.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Implied Warranties
Warranty of fitness for a particular purpose – when a buyer relies on seller’s skill in selecting goods, seller warrants they are fit for the purpose for which they are to be used.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Warranty of Title
Warranty of title – warrants that title is good. Made by both merchants and private
parties. Cannot be excluded by the seller.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Auction Sales
Auction – sale of property to highest bidder (offeror). Auction with reserve – seller may
withdraw goods without accepting highest bid.
Auction without reserve – goods must be sold to highest bidder.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Bailments Bailment – Bailor (owner of goods) places
personal property in possession of another (bailee) without transfer of title.
Mutuum – borrowing goods with intent of replacing with a similar amount of same goods.
Not a bailment, as exact goods are not returned.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Types of Bailments Mutual benefit bailment – both bailor
and bailee benefit (i.e. leaving a watch to be repaired). Duty of ordinary care is owed.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Types of Bailments (Cont’d)
Gratuitous bailment – no consideration by one party in exchange for benefits. Bailment for the sole benefit of bailor
(i.e. storing a car at a friend’s house) – duty of slight care is owed.
Bailment for the sole benefit of bailee (i.e. lending car to a friend) – duty to use great care.
Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Wrongful Possession
Tortious bailee – one who has wrongful possession of another’s goods. Examples: taking goods without
authority or using another’s goods for other than agreed-upon purpose.