Chapter 15 - Business Law 2275

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Management and Organizational Studies
Management and Organizational Studies 2275A/B
Cristin Keller

Chapter 15Sales and Consumer ProtectionThe Sale of Goods Scope of the Sale of Goods ActProvincial legislation common law provinces generally the same with a few variationsSale of Goods Act implies terms that the parties to sale of goods transactions often leave implies terms into contractThe Act only implies missing terms so the stated intention of the parties will override the provisions of the ActApplies to all situations where goods are bough and soldNormal contract rules apply to sale of goods transactions except where overridden by the Sale of Goods ActGoods and Services o Act applies only to the sale of goods o Must involve goods tangible items does not include real estate but does include crops still growing on land o Buildings are subject to the Act until they become attached to the land then they are treated as part of the real property and are not subject to the Act o The Act does not cover intangibles Ex negotiable instruments stocks bonds choses in action etc o Transactions involving both goods and services can pose a problem if the main component is the service provided the Act will not apply o Ex Lawyer drafts a will or an artist paints a portrait and the client gets a physical item the Act will not apply in these two situations o If the service and sale of goods components can be separated the Act will apply to the goods portion of that contract for example when parts are installed to repair an automobile it will apply to the parts o When only services are involved the court may still be willing to imply terms Ex certain level of quality even though the Act does not applyTransfer of Goods o For the Act to apply the parties must have intended that the actual possession and property of the goods would transfer to the buyer goods must be transferred o The Act will not apply when goods are used to secure a loan with no intention that they actually be transferred even though a bill of sale may have been used o When the goods used as security actually do change hands conditional sale the Act will applyMonetary Consideration o The sale must involve actually payment of some money o The Act will not apply to traded goods unless money is also exchangedRequirement of Writing o Some provinces require evidence in writing for the contract to be enforceable o Part performance will make the contract enforceableTitle and RiskDistinction between sale and agreement to sell title does not transfer immediately upon the sale agreements being concluded the Act applies to bothWhoever has the title bears the risk of damage of destruction to the goodsunless the parties have agreed otherwise normally risk follows titleFour common methods are sometimes used to override this provision of the Act title and risk 1 CIF contracts cost insurance and freightdoesnt matter when the title transfers because one of the parties has been designated as being responsible for paying the costs involved in the shipping of those goods as well as arranging insurance and assuming the risk if anything goes wrong
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