Ch 23 The Contract, Product and Promotion.docx

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Management and Organizational Studies
Management and Organizational Studies 2275A/B
Frederick King

The Contract, Product and Promotion 12/12/2012 9:31:00 AM Chapter 23 What is Marketing Law?  Maintained by common law principles  Regulated by federal, provincial and municipal governments  A business selling its product internationally is also subject to the laws and regulations of other countries  Marketing law – all areas of law that influence and direct the creation, promotion, pricing and distribution of goods, services or ideas Contract of Sale  Terms relating to the product o Caveat emptor – “let the buyer beware” or “let the buyer take care”  The common law requires prospective purchasers to take care of themselves, to be aware of what they are buying and to investigate before buying  Sales of goods legislation in Canada o Specialized branch of contract law  Governed by legislation, where legislation is not relevant, governed by contract law o Conditions include:  The seller has the right to sell the foods  The goods will be reasonably fit for the intended purpose where the buyer, expressly or by implication, makes it known what the intended purpose is  Buyer doesn’t have to make their intentions know when the when goods are used for the ordinary purpose  The goods will be of merchantable quality – reasonable quality considering the prices paid  Where goods are sold by sample, the goods will correspond to the sample and the buyer can compare  Where goods are sold by description, they correspond with the description o Warranties  That the buyer will have an enjoy quiet possession of the goods, third parties won’t claim rights against them  The goods are free from liens and encumbrances in favor of third parties that weren’t declared to the buyer o Remedies  Repudiation – breach of a condition may give the innocent party the right not only to claim damages but also to reject the goods and treated the contract as ended  When a warranty is breached, the buyer can maintain an action for damages or ask the court to reduce the purchase price due to breach  The buyer can’t return the goods and is obligated to continue with the contract  Transfer of title o Specific goods – goods that are identified and agreed on at the time a contract of sale is made (goods in existence) o Unascertained goods – goods not yet set aside and identifiable as the subject of the contract at the time the contract is formed (or have not yet been produced) o The sale of goods act sets out a series of rules that determine when title changes in the absence of terms in a contract:  Rule 1 – where there is an unconditional contract for the sale of specified deliverable goods, the property in the goods passes to the buyer when the contract is made, and is immaterial whether the time of payment, time of delivery or both are postponed  Rule 2 – where there is a contract for specific goods and the seller is bound to do something to the goods for the purposes of putting them in a deliverable state, the property doesn’t pass until the thing is done and the buyer is notified  Rule 3 – where there is a contract for the sale of specific goods in a deliverable state but the seller is bound to weigh, measure, test or do some other act or thing with reference to the goods for the purpose of ascertaining their price, the property doesn’t pass until the thing is done and the buyer is notified  Rule 4 – where goods are delivered to the buyer on approval
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