On May 1, S Sells B 100 Widgets on Credit

question 34

Essay

On May 1, S sells B 100 widgets on credit at a price of $1 per widget. S did so based on an April 10 letter from B asserting B's solvency. On May 7, S learns that B was insolvent when it received the widgets on May 1. On May 13, S demands the return of the goods from
B. Is B obligated to return the goods to S?
Yes. Although S did not demand the goods within ten days of their receipt, as required by UCC section 2-702(2), this requirement does not apply in cases where the buyer has made a written misrepresentation of solvency within three months of the goods' delivery.

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Definitions:

Constructive Trust

An equitable remedy imposed by a court to rectify situations where injustice would otherwise occur due to wrongful possession of property.

Irrevocable Living Trust

A legal arrangement where a grantor places assets into a trust, relinquishing control over them, and the assets are managed by a trustee for the benefit of the trust's beneficiaries. Once established, it cannot be amended or dissolved.

Probate

The legal process by which a will is reviewed to determine whether it is valid and authentic.

Trustee

A person or entity given responsibility to manage property or assets on behalf of others, typically within a trust.