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CHAPTER 41

PARTIES AND SUBJECT MATTER

§ 324. Parties to sales.

§ 325. Sale of "future goods."

§ 326. Destruction or deterioration of the goods before the making of the contract.

§ 327. Destruction or deterioration after contract to sell of the subject matter thereof.

§ 324. (Sales, Sec. 37.) Parties to sales.

Case 287a. Uniform Sales Act, Sec. 2.

"Capacity to buy and sell is regulated by the general law concerning capacity to contract, and to transfer and acquire property.

"Where necessaries are sold and delivered to an infant, or to a person who by reason of mental incapacity or drunkenness is incompetent to contract, he must pay a reasonable price therefor.

"Necessaries in this section means goods suitable to the condition in life of such infant or other person, and to his actual requirements at the time of delivery."

Question 287a: Does the sales act make any change in the general law of contracts as to capacity of parties?

(Note: The cases involving sales to and by minors are found under the subject Capacity of Parties in Contracts.)

§ 325. (Sales, Sec. 38.) Sale of "future goods."

Case 288. Uniform Sales Act, Sec. 5.

"(1) The goods which form the subject of a contract to sell may be either existing goods, owned or possessed by the seller, or goods to be manufactured or acquired by the seller after the making of the contract to sell, in this act called 'future goods.'

"(2) There may be a contract to sell goods, the acquisition of which by the seller depends upon a contingency which may or may not happen.

(3) Where the parties purport to effect a present sale of future goods the agreement operates as a contract to sell the goods."

Question 288: (1)

now owned by him?

(2) Can there be

Can one legally contract to sell goods not Goods yet to come into existence?

a transfer of title to future goods?

§§ 326 and 327. (Sales, Secs. 39, 40.) Destruction or deterioration of the goods before the making of the contract.

Case 289. Uniform Sales Act, Secs. 7 and 8.

Section 7. (Destruction of Goods Sold.) (1) Where the parties purport to sell specific goods, and the goods without the knowledge of the seller have wholly perished at the time when the agreement is made, the agreement is void.

(2) Where the parties purport to sell specific goods, and the goods without the knowledge of the seller have perished in part or have wholly or in a material part so deteriorated in quality as to be substantially changed in character, the buyer may at his option treat the sale(a) As avoided, or

(b) As transferring the property in all of the existing goods or in so much thereof as have not deteriorated, and as binding the buyer to pay the full agreed price if the sale was indivisible or to pay the agreed price for the goods in which the property passes if the sale was divisible.

Section 8. (Destruction of Goods Contracted to be Sold.) (1) Where there is a contract to sell specific goods, and subsequently but before the risk passes to the buyer, without any fault on the part of the seller or the buyer, the goods wholly perish, the contract is thereby avoided.

(2) Where there is a contract to sell specific goods, and subsequently but before the risk passes to the buyer,

without any fault of the seller or the buyer, part of the goods perish or the whole or a material part of the goods so deteriorate in quality as to be substantially changed in character, the buyer may at his option treat the contract

(a) As avoided, or

(b) As binding the seller to transfer the property in all of the existing goods or in so much thereof as have not deteriorated, and as binding the buyer to pay the full agreed price if the contract was indivisible, or to pay the agreed price for so much of the goods as the seller, by the buyer's option, is bound to transfer if the contract was divisible.

Question 289: (1) If the goods have perished when the contract of sale is entered into, what is the effect upon the contract?

(2) If in such case they have deteriorated, what right has the buyer?

(3) If they are destroyed or deteriorate after the contract is made, upon whom does the loss fall? (See Risk of Loss, post)?

CHAPTER 42

THE CONTRACT'S OBLIGATIONS AS AFFECTED
BY WARRANTIES

§ 328. Definition of warranty.

A. EXPRESS WARRANTY

§ 329. What constitutes express warranty?

§ 330. Whether alleged oral warranty provable if contract in writing?

§ 328. (Sales, Sec. 41.) Definition of warranty.

(Note: Warranties in sales are either express, that is, stated (in writing or orally); or implied, that is, attached to the contract of sale, as a part of it, by inference from the facts in the case. The idea of warranty, whether express or implied, is that it is an obligation which forms a part of the seller's contract in respect to the title, quality, capacity or condition of the goods.)

A. Express Warranty.

§ 329. (Sales, Sec. 42.) What constitutes express

Case 290.

warranty.

Uniform Sales Act, Sec. 12.

"Any affirmation of fact, or any promise by the seller relating to the goods is an express warranty if the natural tendency of such affirmation or promise is to induce the buyer to purchase the goods, and if the buyer purchases the goods relying thereon. No affirmation of the value of the goods nor any statement purporting to be a statement of the seller's opinion only shall be construed a warranty."

Question 290: Define express warranty. Is a statement of the value of the goods a warranty? an expression of opinion? Why?

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(Note: The reader will at once note the resemblance between statements that constitute warranty and those that constitute fraud. To constitute fraud or warranty a statement must be one of fact, not of mere opinion. It ought to be noted in this connection that a buyer may frequently have at his election a case in tort for fraud or a case in contract for breach of warranty. In a suit for fraud the seller's knowledge and conduct becomes material. In a suit for breach of warranty, the seller's intent to deceive, or lack thereof, is not material. "There is a clear distinction between an action for fraud and deceit and consequent damages and an action to recover upon a breach of warranty which should not be overlooked. In the case of Rose et al. v. Hurley, 39 Ind. 77, the distinction is clearly made in the following language: 'A warranty rests upon contract, while fraud or fraudulent representations have no element of contract in them, but are essentially a tort. When judges or law writers speak of fraudulent warranty, the language is neither accurate nor perspicuous. If there is a breach of warranty, it cannot be said that the warranty was fraudulent, with any more propriety than any other contract can be said to have been fraudulent, because there has been a breach of it. On the other hand, to speak of a false representation as a contract or warranty or as tending to prove a contract or warranty is a perversion of language and of correct ideas. The subjects, however, are in many respects. closely connected and sometimes in a confused and unguarded way. Warranties, while collateral to the principal purposes of the contract, are a part of the contract.'" McCarty v. Williams, 58 Ind. App. 440, 108 N. E. 370. Clearly it may be supposed that in the majority of cases involving breach of warranty, the seller was honest, but whether honest or dishonest, the question is, did he make a contract, and if so, did he break it? If he was deceitful, and the buyer can so prove, he might sue in tort for the damages caused by the fraud, or base his suit on theory of breach of contract.)

Case 291.

(a) The Affirmation of Fact.

Hobart v. Young, 63 Vt. 363.

Facts: Hobart bought of Young "one pair of black (Pilot geldings) sound and kind." Upon getting the horses home Hobart discovered one of them had a ring bone, and he brings suit for breach of warranty.

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