In a shipping contract, the seller must ensure that the goods are on board the transport vehicle., The seller`s obligation is to send the goods to the buyer, but not to a specific destination. Typical decisions are set out in the UCC in Article 2-319: There are three reasons why it is important that title passes from the seller to the buyer, i.e. when the buyer receives the property. When determining the transfer of ownership and the risk of loss, the parties often use brief terminology, the meaning of which must be mastered to understand the contract. These terms include F.O.B.; F.A.S.; Ex-ship; C.A.F.; C.F.; no arrival, no sale; sale after approval; and sale or return. The use of these terms in a contract can have a significant impact on the security and the risk of loss. Conley`s title is voidable if “the shipment was obtained by fraud punishable under the criminal law as theft” under paragraph 2-403(1)(d). Assuming Conley knew he would not deliver both vehicles to Marlow, delivery of the truck to Conley was obtained by fraud, which was punished as theft. As a result, Marlow was deceived and Conley received questionable ownership of the truck. Even a validly signed document becomes legally valid only when the grantor “delivers” the deed to the new owner (the “beneficiary”). Legal delivery does not necessarily mean physical delivery (although physical delivery may constitute a valid delivery). On the contrary, legal service is any means of delivering the instrument to the beneficiary that shows the grantor`s intention that the transfer take place immediately.
For example, if the donor hands the certificate to the awardee but says, “I want to pick it up in a week,” that would not be a valid delivery. The filing of the document with an external party with the instruction to deliver it to the addressee when all the conditions are met is another legally acceptable means of delivery. It is only when the grantor has provided the beneficiary with a valid document that ownership of the asset is transferred to the beneficiary. Article 2-403 should prioritize between the two innocent parties: (1) the original owner who disposes of his property through the fraudulent behavior of others, and (2) an innocent third party who gives value to the perpetrator of the fraud without knowing it. By favouring the innocent third party, the Uniform Commercial Code seeks to promote the flow of trade by placing the burden of detecting and preventing fraudulent transactions on the one best placed to prevent them, the original seller. The policy behind the UCC is to favor medleys because, between medleys and Marlow, Marlow was in the best position to prevent the fraudulent transaction. Anthony L. Gruda and Sharon R. Gruda (the “Grudas”) owned and operated Gruda Enterprises, Inc. (Gruda Enterprises), which in turn operated The Kitchen Works, a kitchen supply business. On March 5, 1998, Gruda Enterprises entered into an agreement to sell a range of kitchen cabinets to Sam and Mac, Inc. [SMI], a commercial and construction company.
Gruda Enterprises was also to supply and install the cabinets. As the cabinets were out of stock, Gruda Enterprises ordered them from a manufacturer. On March 14, 1998, nine days after the contract was awarded, SMI paid Gruda Enterprises in advance for the firm`s contract. If the parties do not agree in any way on the time when ownership changes ownership, Article 2-401 (2) of the UCC provides that “ownership shall pass to the buyer at the time and place where the seller completes his performance with regard to the physical delivery of the goods”. And if the parties do not have a delivery clause in their supply contract, the UCC standard delivery time applies. It provides that “the place of delivery is the seller`s place of business or, if the seller does not have one, his domicile” and that delivery takes place at the place where the seller “supplies and holds conforming goods to the buyer and gives the buyer such notice as is reasonably necessary for him to accept delivery of the goods”. Uniform Commercial Code, §§ 2-308 and 2-503. In a real estate transfer agreement, two parties agree that at a later date, one will transfer ownership to the other.
According to a common law doctrine known as fraud law, which applies in all states, a real estate contract must generally be in writing and signed by both parties. The contract must contain all important points regarding the transfer of ownership, including a clear identification of ownership and contracting parties, any sale price and how the buyer will make payment. However, the contract alone does not transfer ownership of the property. Sometimes goods are sold by non-owners. A person with questionable title has the power to transfer ownership to a bona fide purchaser for valuable consideration. A merchant who deals in certain goods has the right to transfer all the rights of the person who entrusts him with such goods. And a rightful owner can be prevented by his own actions from asserting ownership against an innocent buyer. Now suppose that a seller violates the contract by offering non-conforming goods, and the buyer who did not discover the non-conformity accepts it – the non-conforming goods are in the hands of the buyer. The buyer has the right to revoke the acceptance, but before the defective goods are returned to the seller, they will be destroyed as long as they are in the possession of the buyer. The seller violated, but here`s the wrinkle: The UCC says the seller only bears damage to the extent of a defect in the buyer`s insurance coverage. Uniform Commercial Code, § 2-510 para.
2. Very Fast Foods had received the sponges and only discovered a few days later that the sponges did not comply with the contract. Very Fast has a right of withdrawal and announces its intention to do so. A day later, his warehouse burns down and the sponges are destroyed. He then realized that his insurance was not enough to cover all the sponges. Who will bear the loss? The seller in turn does so to the extent of any defect in the buyer`s insurance coverage. Here are the relevant facts. On May 21, 2000, Medley attended an auto show in Indianapolis. Henderson Conley attended the same auto show and tried to sell a 1932 Ford truck (“truck”). Conley told Robert that he operated a “buy here, pay here” parking lot, and Robert saw that the truck had a dealership license plate. Robert bought the truck for $7,500.00 as a gift for Linda. Conley gave Robert title to the truck, which indicated that the owner was Donald Marlow.
When Robert asked Conley about the owner of the truck, Conley replied that Marlow had signed the title as part of a deal Conley had made with him. After purchasing the truck, Robert applied to the Bureau of Motor Vehicles for a certificate of ownership in Linda`s name. Article 66 CISG provides: “Loss of or damage to the goods after the transfer of risk to the buyer does not relieve the buyer of his obligation to pay the price, unless the loss or damage results from an act or omission of the seller.” In addition, it is apparent from the minutes that SMI and Gruda Enterprises did not have an express agreement to transfer ownership at any other time or time before the actual delivery of the cabinets. SMI asserts that title was transferred to it pursuant to paragraph 2-401(3)(b) [“if delivery is to be made without movement of the goods,. If the goods have already been identified at the time of contact and no document is to be handed over, ownership shall pass at the time and place of contact.”]. However, it is apparent from the minutes that SMI admitted that, under the terms of the contract, Gruda Enterprises was obliged not only to order the cabinets but also to supply and install them at the location indicated by SMI.