The elements of bankruptcy specified in Chapter 7 have to do with the sale of a debtor's property in order to pay off debts. Put simply, the debtor sells of non-exempt holdings to pay creditors. The elements of bankruptcy specified in Chapter 11 on the other hand, have to do with the reorganization of the organization. Put simply, the debtor files for bankruptcy which in turn allows him to continue with the organization and pay off creditors over a period of time. Lastly, the elements of bankruptcy mentioned in Chapter 13 involve bankruptcy protection. Under this law, the debtor has to have a reliable income and pay off creditors over a period of time. During all this, the debtor gets to retain his assets.
The major differences between the 3 types of bankruptcies are that in Chapter 7, the debtor is basically starting over from scratch. In Chapter 11, the type of bankruptcy is actually quite similar to that mentioned in Chapter 13. However, the major difference is that in Chapter 11, there is no limiting the amount of debts the debtor owes. In Chapter 13, debtors retain their assets.
2. Identify and discuss each of the warranty protections that apply to the sale of goods under Article 2A of the Uniform Commercial Code (UCC). Provide an example for each that is not presented in the textbook. Why does the UCC allow for the buyer to sue for breach of warranty? In your opinion, are the protections necessary? Why, or why not?
The three categories of warranties under Article 2A of the UCC include; 1) Express Warranties, 2) Warranties against interference and infringement, and 3) Implied warranty of merchantability. Express warranties state that if the lessor makes a statement about the goods then those goods must meet the standards set; furthermore, the goods must meet the criterion which has been mentioned in the lease and the goods must be identical to the sample provided. For instance; if the consumer is shown a floor sample of a television he wishes to purchase then this is a sample of what the consumer expects to buy, hence, the purchased television must be identical.
Warranties against interference and against infringement ensures that under the lease term no one apart from the lessee has enjoyment of the leasehold interest, adding on, the goods are delivered without any third-party interference as guaranteed by the lessor. Moreover, the supplier or lessor cannot be held responsible if the goods provided do not match the specifications provided by the lessee. For example; a landlord cannot disconnect the tenant’s water or electricity supply under the lease period otherwise it will be considered breach of warranty.
Implied warranty of merchantability states that if the lessor is the merchant then whatever goods are leased to the lessee they must be saleable and should provide the benefits it promises to deliver. However, this is not applicable to a finance lease. For example; a food item which looks and smells good but has hidden defects then this warranty is said to be violated.
The buyer is allowed to sue for breach of warranty because he/she is paying for the item and if it does not meet the required standards then they are being exploited by not being provided with what they expected. These protections are necessary as they ensure that lessor’s do not take undue advantage of the consumers by providing them with faulty products.
Uniform Commercial Code | Minnesota Consumer Attorney. (n.d.). Thompson Hall: Minnesota Business Attorneys for Business Owners. Retrieved December 31, 2013, from http://thompsonhall.com/uniform-commercial-code-minnesota-consumer-attorney/