ES 6 UNDERSTAND SALES,
CONSUMER, PROPERTY,
AND CYBER LAWS
BB30 Business Law 6.01
Summer 2013
6.01 Understand sales law
BB30 Business Law 6.01
Summer 2013
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
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
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
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
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
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
TRANSFER OF OWNERSHIP
Existing Goods
vs.
Identified Goods
vs.
Future Goods
BB30 Business Law 6.01
Summer 2013
When does ownership transfer?
Situation
Definition
Who owns item?
Tender of delivery
Seller notifies buyer of
item being available.
Buyer once notified.
Seller ships goods
Seller is required to ship
item but not deliver to
buyer.
Buyer once the carrier is in
possession of item.
Seller sends document of
title
Seller provides the
document of title to the
buyer and the buyer can
receive the goods at
anytime.
Buyer once document of
title is possessed.
Seller tenders items at
place of sale
Buyer is offered item at
the place of the sale.
Buyer once item is
tendered.
BB30 Business Law 6.01
Summer 2013
RISK OF LOSS
When does risk of loss transfer?
Situation
Who is at risk?
FOB Shipping Point
Buyer is at risk once the item is
shipped.
FOB Destination
Seller is at risk until the product is
delivered to the buyer
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
RISK OF LOSS
Types of Sales/Transfer of Rights?
Situation
Definition
Who is at risk?
Cash and Carry Sales
Pay cash and take
immediate delivery
Buyer assumes risk at
receipt.
Sales on Credit
Payment at a later date
Buyer assumes risk at
receipt.
COD Sales
Collect on delivery
Buyer assumes risk at
receipt (when paid in full).
Sale or Return
Buyer has the option to
return the goods
Buyer assumes risk at
receipt.
Sale on Approval
Buyer has goods on a trial
basis
Buyer assumes risk at time
of approval.
Sale of an Undivided Interest Buyer owns a portion of the
item
Each owner has a partial risk.
Auction
Buyer bids on item.
Ownership transfers when
the gavel falls (unless
reserve is not met).
All or a major part of a
business is sold.
Buyer must notify creditors
of ownership transfer.
Bulk Transfer
BB30 Business Law 6.01
Summer 2013