True Facts, Bad Deal

Here is an interesting, and true, fact pattern to discuss the issues of title under the UCC.

Under the UCC, one who has acquired possession based on a voluntary transfer of the goods by the title holder, acquires voidable title if the goods where obtained by fraud or deceit. While the goods are in the hands of the defrauder, the title holder may void the title and retrieve the goods. But under Article 2-403, a person with voidable title may transfer good title to a good faith purchaser for value. So if the defrauder has already sold the goods to a good faith purchaser for value, the title holder may not recover the goods from the buyer.

To be sure, the defrauder is liable to the title holder for the value of the goods. But thieves, even when apprehended, rarely have the means to pay damages.

According to the Daily Beast:

Two young men, identified as Kaleb Louis, 22, and Maurice Lewis, 20, flew from Houston, Texas, to Nashville on March 14. While still in the airport, the pair allegedly used a fake driver’s license and a stolen credit card to rent [a late model Chevy Suburban.]

After driving off the lot with the rented Suburban, Louis and Lewis allegedly set about making the car look like their own. They outfitted the rental with a license plate ripped from a Toyota Camry in a nearby apartment complex, and forged documents to indicate that they owned the car. Then they listed the Suburban on the Nashville Craigslist page.

A Lafayette, Tennessee, man thought he’d struck Craigslist gold. The Chevrolet Suburban, normally valued at around $60,000, was selling for half its normal price. All he had to do was bring $30,000 in cash to a McDonald’s parking lot in Nashville, and the new vehicle would be his.

But Kyle Whitlow, the would-be Suburban owner, grew suspicious of the deal when he forked over the $30,000. The 28-year-old handed the cash to two young men, who gave him the Suburban and sped off in their own car without even counting the money. Whitlow’s suspicions grew when he attempted to register the car later that day and found another name on the registry: EAN Holdings LLC, the parent company of Enterprise Rent-a-Car.

After selling the vehicle to Whitlow at McDonald’s, the pair boarded the next flight to Houston. According to police, they remain at large.

May Enterprise Rent-A-Car, the title holder obtain the car back from Whitlow or did Louis and Lewis pass good title to Whitlow in the parking lot sale?  Was Whitlow a good faith purchaser for value?  Why or why not?

Spoiler Alert from the Daily Beast:

An Enterprise representative declined to comment on the Suburban theft, or the frequency of other thefts from their lots. But with the exception of the license plate removed from the back of the Suburban, the company saw the car returned in one piece, police said.

Law Lessong: The Holder in Due Course Blues

There's not a lot of interesting resources out there on Holder in Due Course.  Perhaps this can help.

When is Food Unfit For Its "Ordinary Purpose?"

The UCC says that every sale by a merchant includes the implied warranty of merchantability. "Merchantability," among other requirements, means that the goods are fit for the ordinary purpose for which such goods are intended. When the goods are food, that means that the warranty requires that the food be fit for human consumption. Typically, when the food contains foreign objects, like broken glass, or human fingers, the case is pretty clear that the warranty is breached.  However, what should be the test applied to determine if the warranty is breached when the food contains a natural, yet inedible object; i.e. beef bone in a hamburger, or a cherry pit in cherry nut ice cream. The emerging legal test seems to no longer turn on a foreign/natural object tests.  Instead the test is, "What is the reasonable expectation of the consumer?"

Needless to say, this consumer did not expect what she found in her green beans:

Can This be an Express Warranty?

In this post we pointed to the UCC Article 2 express warranty provisions.  In the video below, a bold statement is made by the retail sellers of coffee.  Is it a statement of fact or "puffing"?

Thank Goodness for Express Warranties

Under the UCC, an affirmation of fact that is part of the basis of the bargain constitutes an express warranty that the good will conform to the facts as affirmed. Prospective Dairy Queen customers were probably relieved to be able to rely on the express warranty springing from the affirmation of facts on the sign pictured below.  Perhaps a new slogan might be appropriate for DQ.  Here is my suggestion:

If you eat here and die,
It won't be from e-coli.



source of image: http://stevemandich.blogspot.com/2006/10/sign-o-times-1993.html

Rejecting Non-Conforming Goods

Clark Griswold (Chevy Chase) rejects non-conforming goods under UCC 2-601.

Click here or on image below to see video:

The Negotiable Paper Bunch

It's a writing
Pay to order or bearer
Signed by the maker or the drawer
An unconditional promise to pay
A sum certain
In currency
On demand or at a definite time

It's a writing
Pay to order or bearer . . .
Oh, well - you'll get it after you watch the video.

Thank you, Sabrina Ursaner, for sharing you ditty with us on the internet.  Please visit Sabrina's YouTube channel and her Blog.



Brday Bunch theme:



Another Negotiable Instrument Song:

Be Empowered! - by UCC Article 2

Here is an introduction to article 2 that is likely to get student attention.

Law Lessong - Mixed Contract

The next installment in the “Law Lessong” series is Mixed Contract. This simple video and song from a Power Point presentation can help students learn and remember the need and means of distinguishing between a sale of goods contract under the UCC and a common law service or sales contract. When a mixed or hybrid contract is present, the predominant purpose of the contract must be determined.
Learn more about Law Lessongs from the post found here.  More videos may be found at my youtube channel. Please feel free to use them in the classroom or as assignments or in any way that they work for you as an educational resource.

Featured Website: Clipart, ETC.

Clipart, ETC is an online service of Florida's educational technology clearinghouse. The Consumer Math section of the site has a number of illustrations that I have found useful to exhibit various types of commercial paper and indorsements.  According to the licensing instructions, one may use up to 50 images per project, for educational purposes, without seeking permission.  The site should be credited when images are used.

Credit for the following images: http://etc.usf.edu/clipart

Law Lessong - This Form is Your Form (Battle of the Forms)

The next installment in the “Law Lessong” series is This Form is Your Form (Battle of the Forms). This simple video and song from a Power Point presentation can help students learn and remember the UCC rules regarding additional rules in an acceptance. Learn more about Law Lessongs from the post found here.  More videos may be found at my youtube channel. Please feel free to use them in the classroom or as assignments or in any way that they work for you as an educational resource.

Law Lessong - The Holder in Due Course Blues

This  video and song from a Power Point presentation can help students ponder the requirements for achieving Holder in Due Course status and the importance of doing so. Learn more about Law Lessongs from the post found here. More audio files are found at the Law Lessongs Website. More videos may be found at my youtube channel. Please feel free to use them in the classroom or as assignments or in any way that they work for you as an educational resource.

Man's Best Friend - Good Dog or Just Goods?

Goods are tangible, movable items.  The subject of this video is certainly tangible and quite movable! Credit goes to John W. Rowe, owner of the goods, for creating and sharing this video.

"Law Lessong" - The Negotiable Instruments Song

I have always been drawn to both music and the law. In searching for some innovative classroom techniques, I was encouraged by the education literature and the brain research indicating the beneficial effects of music on learning and memory. I was further encouraged by seeing Rutgers Law Professor Steven Friedell singing with his class and reading about BU Law Professor Mark Pettit singing in his class. My idea was to take a simple or recognizable melody and add lyrics that include a lesson in the law  - "Law Lessongs." There are 18 audio files of "Law Lessongs" at the Law Lessong website.  I sing the Law Lessongs in class with the lyrics displayed and encourage students to sing along.  Recognizing that not everyone may be comfortable singing songs in class, I am trying to produce a video for each song so that they can be played in class for students to hear and experience as more than a simple audio file. I have included the first of these videos below.  Over time, I hope to create more of these videos to make the Law Lessongs a more viable classroom resource.  Please feel free to use them in the classroom or as assignments or in any way that they work for you as an educational resource. The youtube version is here along with access to my youtube channel and other Law Lessong videos posted there.