Welcome to Assignment 6
This assignment covers commercial law — the legal framework governing the buying, selling, and financing of goods. You will learn the Uniform Commercial Code (UCC), which standardizes sales contracts across all 50 states, along with warranties, risk of loss, product liability, and strict liability. These topics are critical for understanding how insurance claims arise from commercial transactions.
Exam Alert!
Key exam topics: FOB shipping terms (who bears risk of loss), merchant vs. nonmerchant warranties, express vs. implied warranties, warranty disclaimers, strict product liability elements, and defenses to product liability. This assignment is heavily tested on scenario-based questions.
What You Will Learn
1. What UCC Article 2 governs and how it differs from common law contracts
2. How sales contracts are formed and when nonconforming goods are excused
3. Shipping terms (FOB, CIF, COD) and who bears risk of loss
4. Express and implied warranties — and how to disclaim them
5. Product liability theories: negligence, strict liability, and breach of warranty
6. Defenses available to product liability defendants
Assignment Parts
UCC & Sales Contracts
UCC Article 2 overview, offer and acceptance under UCC, nonconforming goods, types of sales contracts, shipping terms (FOB, CIF, COD), and contract formation.
Risk of Loss & Warranties
Risk of loss rules, title vs. risk separation, breach remedies, express warranties, implied warranty of merchantability, fitness for a particular purpose, and warranty disclaimers.
Product Liability & Strict Liability
Product liability theories, negligence vs. strict liability, Restatement (Second) of Torts Section 402A, defenses to product liability, and consumer protection laws.
Quick Reference Summary
UCC Article 2
Governs sales of goods (tangible, movable property). More flexible than common law contracts.
FOB Shipment vs. Destination
Shipment = buyer's risk once on the truck. Destination = seller's risk until arrival.
Merchantability Warranty
Implied ONLY in sales by merchants. Goods must be fit for ordinary purpose.
Express Warranties
Specific factual claims by seller. Cannot be disclaimed if part of the bargain.
Risk of Loss (Merchant)
Merchant seller retains risk until buyer actually receives the goods.
Strict Liability
No need to prove negligence. Defective product + injury = liability for seller/manufacturer.