Background: The GC owners are aware of the importance of contracts to both buy a
ID: 390879 • Letter: B
Question
Background: The GC owners are aware of the importance of contracts to both buy and sell goods and services. They are reviewing the Uniform Commercial Code (UCC), Article 2, that covers contracts for sales of goods.
In sales contracts, it is important to consider allocation of risk between a buyer and a seller to define value, and typically each party will want to shift as much risk as possible to the other party.
The GC owners understand that the terms in their purchase contracts (i.e., from EPI) will require very different terms from their sales contracts (i.e., reselling cleaning products purchased from EPI.)
First, the owners want to focus on developing their sales contracts for reselling EPI cleaning products. They asked TLG to prepare a memorandum that recommends desired contract terms and positions GC’s contracts for sale of goods.
You are tasked with preparing a memorandum to Winnie, Ralph making recommendations for GC sales contracts
Instructions: The terms below are just a few of the terms that you, Winnie, and Ralph determined should be included in a sale of goods contract for GC.
A. Evaluate, recommend, and explain details and policies for each of the 4 categories of terms to be included GC sale of goods contracts.
B. List, for each of the 4 terms, the UCC, Article 2, section that applies to the term.
1. Payment terms for buyer
2. Transfer of title and risk of loss or damage to goods GC is delivering to buyers
3. Inspection of delivered goods: length of time for buyer to inspect goods after delivery
4. Rights and obligations of seller and buyer if delivered goods do not conform to the order
Format for Memorandum:
Memorandum
TO: Winnie James, Ralph Anders
FROM:
RE: Green Clean Sales Contract Terms
DATE:
1. Payment terms
A.
B.
2. Transfer of title and risk of loss or damage to goods sold to GC buyers
A.
B.
3. Inspection of delivered goods: length of time for buyer to inspect goods after delivery
A.
B.
4. Rights and obligations of seller and buyer if delivered goods do not conform to the order
A.
B.
Explanation / Answer
Answer A :
1. Payment terms :
a. Payment will be made within 30 days following the date of invoice, by the currency specified in the invoice.
b. If any dispute occurs related to payment, that should be notifies in writing within the 30 days from the date invoice was received.
c. Payment should not be withhold of any amounts due, in case of bankruptcy, breach etc.
2. Transfer of title and risk of loss or damage to goods GC is delivering to buyers
a. Buyer needs to grant seller the security interest, and rights, title and interest of buyer under the product wherever located.
b. Replacement or modification for the product should be provided including insurance proceeds in case of damage.
c. The security interest are granded according to the provision provided under property money security interest .
d. Failure of seller to produce documents related to security interest shall not in any way act as waiver of sellers right.
3. Inspection of delivered goods: length of time for buyer to inspect goods after delivery
a. Right to accept and inspect goods after arrival, where expenses of inspection must be borne by buyer.
b. In case of damage, buyer need to ask for refund or replacement within 10 days after the goods are received.
4. Rights and obligations of seller and buyer if delivered goods do not conform to the order
a. Seller can immediately terminate this contract with buyer if buyer fails to :
1. Pay amount within 30 days after buyer has received the invoice.
2. Buyer has complied with any of the terms and conditions in a part or whole of a contract.
b. Buyer need to notify seller within reasonable time about defects within the product and exactly stating the kinf of defect.
Answer B :
Memorandum
TO: Winnie James, Ralph Anders
FROM: ABC
RE: Green Clean Sales Contract Terms
DATE: 9/25/2018
1. Payment terms
A. Payment will be made within 30 days following the date of invoice, by the currency specified in the invoice.
B. If any dispute occurs related to payment, that should be notifies in writing within the 30 days from the date invoice was received.
2. Transfer of title and risk of loss or damage to goods sold to GC buyers
A. Replacement or modification for the product should be provided including insurance proceeds in case of damage.
B. Failure of seller to produce documents related to security interest shall not in any way act as waiver of sellers right.
3. Inspection of delivered goods: length of time for buyer to inspect goods after delivery
A. Right to accept and inspect goods after arrival, where expenses of inspection must be borne by buyer.
B. In case of damage, buyer need to ask for refund or replacement within 10 days after the goods are received.
4. Rights and obligations of seller and buyer if delivered goods do not conform to the order
A. Seller can immediately terminate this contract with buyer if buyer fails to :
1. Pay amount within 30 days after buyer has received the invoice.
2. Buyer has complied with any of the terms and conditions in a part or whole of a contract.
B. Buyer need to notify seller within reasonable time about defects within the product and exactly stating the kinf of defect.
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