Part 4- Sales, Chapter 19: Formation and Terms of Sales Contracts, Doc 6

Case Analysis and Key Points 1. Star Coach Vehicle Conversion o Issue: Whether the UCC applies to a contract for converting a vehicle, which involves both goods and services. o Analysis: The UCC generally applies to contracts for the sale of goods. However, in a mixed contract involving both goods (parts) and services (installation), the predominant purpose test is used to determine if the UCC governs. If the primary purpose of the contract was to purchase the parts (goods), the UCC applies, even if services are involved. o Conclusion: If the main focus was the purchase and installation of specific parts rather than just service, the UCC would likely apply to this contract. 2. Hummel Vehicle Accident and Title Ownership o Issue: Whether Raisor Pontiac held title to the Corsica at the time of the accident and thus if its insurance coverage would apply. o Analysis: UCC rules on title passage depend on the terms of the sales contract and the delivery conditions. The title typically passes when the seller completes obligations, such as tendering delivery and payment is made. Given that Raisor Pontiac retained the title certificate temporarily, ownership determination could rely on whether the UCC considers the title passed upon delivery and partial payment or after final payment and document transfer. o Conclusion: If the court finds Raisor Pontiac retained significant control and title, the insurance might apply. However, if Hummel’s possession and substantial payment suggest ownership, then the insurance may not apply. 3. Mitchell’s Heirloom Vehicle Sale o Issue: Whether Mitchell can recover her vehicle sold by Thrash, despite Thrash not having paid her. o Analysis: Under the UCC, a merchant entrusted with goods has the power to transfer rights to a buyer in the ordinary course of business. Because Mitchell left the car with Thrash, who sold it without paying her, the purchaser who bought in good faith would typically acquire good title. o Conclusion: Mitchell may not recover the vehicle from the buyer, Jones, but can seek damages from Thrash for non-payment under entrustment principles. 4. Club Pro’s Fraudulent Sale by Gude o Issue: Whether Simpson, who bought goods from Gude under fraudulent circumstances, obtained good title. o Analysis: Under the UCC, if goods are obtained by fraud rather than outright theft, a seller can pass voidable title to a good-faith purchaser. However, since Gude obtained the goods fraudulently from Club Pro and resold them to Simpson, the key issue is whether Simpson purchased in good faith without knowledge of the fraud. o Conclusion: Simpson could argue for good title if he acted without knowledge of Gude’s fraud, but Club Pro may still have grounds to recover the goods due to the initial fraudulent circumstances. 5. Risk of Loss in Legendary Homes Appliance Theft o Issue: Determining whether Legendary Homes bore the risk of loss for the appliances stolen after delivery. o Analysis: If the seller (Ron Mead) is a merchant, risk of loss passes to the buyer upon receipt. Since the delivery was completed by leaving the appliances on-site, but before the buyer took possession, the risk may still have been on the seller until buyer acknowledgment. o Conclusion: Legendary Homes may argue that, as the risk of loss remained with Ron Mead until acceptance, they are not responsible for the stolen goods. 6. Big Wheel Sports Center Motorcycle Sale to Ramos o Issue: Determining when title and risk of loss passed in the sale of a motorcycle once Ramos paid but before title transfer was completed. o Analysis: UCC rules generally pass risk of loss to the buyer upon receipt of goods if the seller is a merchant. Ramos, having paid and completed initial paperwork, may be seen as holding the risk, even if he did not yet have formal title. o Conclusion: Risk likely shifted to Ramos upon his acceptance of the motorcycle, depending on whether Big Wheel Sports Center’s retention of paperwork created an exception. These scenarios illustrate key UCC concepts, including the importance of contract terms, entrustment rules, title transfer, risk of loss, and the distinction between fraud and outright theft in determining who bears responsibility in complex sales and delivery transactions.