Question 1

A(n) _____ is one that the seller did not make but that is imposed by the law.

Accepted Answer

A)  conditional warranty 
B)  express guarantee 
C)  limited guarantee 
D)  implied warranty 
A)  conditional warranty 
B)  express guarantee 
C)  limited guarantee 
D)  implied warranty D

Question 2

Jack, a second-hand dealer of cars, provides his clients with the opportunity to examine them. Jenny test-drove a car and got it checked by her mechanic as well. However, the mechanic missed a broken valve and the car broke down after the purchase. Which of the following is likely to happen in this scenario?

Accepted Answer

A)  Jack is exempt from prosecution as the principle of caveat emptor applies. 
B)  Jack is responsible for selling a faulty car and can be prosecuted for fraud. 
C)  Jenny can claim compensation through courts as per the principle of caveat emptor. 
D)  Jack can be prosecuted by the mechanic for misleading him during purchase. 
A)  Jack is exempt from prosecution as the principle of caveat emptor applies. 
B)  Jack is responsible for selling a faulty car and can be prosecuted for fraud. 
C)  Jenny can claim compensation through courts as per the principle of caveat emptor. 
D)  Jack can be prosecuted by the mechanic for misleading him during purchase. A

Question 3

A warranty is an assurance that the article sold will conform to a certain standard or will operate in a certain manner.

Accepted Answer

A) True 
 B)False  True

Question 4

Implied warranty arises as to fitness of used property for ordinary use from a sale made by a casual seller.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is true of warranty of merchantability?

Accepted Answer

A)  It imposes the duty to employ a particular design, on the merchant, for safety reasons. 
B)  Warranty of merchantability exists even after the risk of loss has passed to the buyer. 
C)  Warranty of merchantability relates only to the fitness of the product made or sold. 
D)  Unless excluded or modified, merchants do not make an implied warranty of merchantability. 
A)  It imposes the duty to employ a particular design, on the merchant, for safety reasons. 
B)  Warranty of merchantability exists even after the risk of loss has passed to the buyer. 
C)  Warranty of merchantability relates only to the fitness of the product made or sold. 
D)  Unless excluded or modified, merchants do not make an implied warranty of merchantability.

Question 6

Which of the following is true of full warranties?

Accepted Answer

A)  They are the same as implied warranties. 
B)  They are not made by the seller and are imposed by law. 
C)  The seller must remedy any defects without charge. 
D)  The seller need not offer a replacement if the product is not repairable. 
A)  They are the same as implied warranties. 
B)  They are not made by the seller and are imposed by law. 
C)  The seller must remedy any defects without charge. 
D)  The seller need not offer a replacement if the product is not repairable.

Question 7

The Federal Trade Commission demands that advertisements be limited to statements about products that can be substantiated.

Accepted Answer

A) True 
 B)False

Question 8

A small piece of molded plastic shown to a car buyer to illustrate the materials and methods used in the construction of cars creates a sale by sample.

Accepted Answer

A) True 
 B)False

Question 9

The statement of the seller in which the article sold is warranted or guaranteed is known as an _____.

Accepted Answer

A)  express warranty 
B)  unconditional warranty 
C)  universal warranty 
D)  express guarantee 
A)  express warranty 
B)  unconditional warranty 
C)  universal warranty 
D)  express guarantee

Question 10

A _____ is a portion of a whole mass that is the subject of the transaction.

Accepted Answer

A)  parcel 
B)  notice 
C)  model 
D)  sample 
A)  parcel 
B)  notice 
C)  model 
D)  sample

Question 11

The _____ is the total dollar amount the borrower will pay for the loan.

Accepted Answer

A)  equity charge 
B)  balloon charge 
C)  finance charge 
D)  commitment charge 
A)  equity charge 
B)  balloon charge 
C)  finance charge 
D)  commitment charge

Question 12

An express warranty applies even if defects are actually known to the buyer, or defects are so apparent that no special skill or ability is required to detect them.

Accepted Answer

A) True 
 B)False

Question 13

The statement of the seller in which the article sold is warranted or guaranteed is known as an implied warranty.

Accepted Answer

A) True 
 B)False

Question 14

According to the Magnuson-Moss Warranty and Federal Trade Commission Improvement Act, the consumer need not be informed of the warranty prior to the sale.

Accepted Answer

A) True 
 B)False

Question 15

Explain product uniformity.

Accepted Answer

A number of required practices give cons

Question 16

The sale of food or drink, to be consumed off the seller's premises, is not a sale.

Accepted Answer

A) True 
 B)False

Question 17

Unless otherwise agreed, a merchant warrants that goods shall be delivered free of the rightful claim of any third person by way of patent or trademark infringement.

Accepted Answer

A) True 
 B)False

Question 18

______ is information that the law presumes everyone knows by virtue of the fact that it is filed or recorded on the public record.

Accepted Answer

A)  Instructive notice 
B)  Model notice 
C)  Constructive notice 
D)  Sample notice 
A)  Instructive notice 
B)  Model notice 
C)  Constructive notice 
D)  Sample notice

Question 19

Which of the following is true of sale of food or drink?

Accepted Answer

A)  The seller must always provide an express warranty that the food is fit for consumption. 
B)  The seller is always liable  even when a harmful object found in food is  natural to the particular kind of food. 
C)  It is not considered as a sale if the purchaser consumes it off the premises. 
D)  The sale carries an implied warranty that the food is fit for consumption. 
A)  The seller must always provide an express warranty that the food is fit for consumption. 
B)  The seller is always liable  even when a harmful object found in food is  natural to the particular kind of food. 
C)  It is not considered as a sale if the purchaser consumes it off the premises. 
D)  The sale carries an implied warranty that the food is fit for consumption.

Question 20

All sellers, by the mere act of selling, make a warranty that they have good title and make rightful transfers.

Accepted Answer

A) True 
 B)False

Exam 19: Warranties, Product Liability, and Cons

A(n) _____ is one that the seller did not make but that is imposed by the law.

A warranty is an assurance that the article sold will conform to a certain standard or will operate in a certain manner.

Implied warranty arises as to fitness of used property for ordinary use from a sale made by a casual seller.

Which of the following is true of warranty of merchantability?

Which of the following is true of full warranties?

The Federal Trade Commission demands that advertisements be limited to statements about products that can be substantiated.

A small piece of molded plastic shown to a car buyer to illustrate the materials and methods used in the construction of cars creates a sale by sample.

The statement of the seller in which the article sold is warranted or guaranteed is known as an _____.

A _____ is a portion of a whole mass that is the subject of the transaction.

The _____ is the total dollar amount the borrower will pay for the loan.

An express warranty applies even if defects are actually known to the buyer, or defects are so apparent that no special skill or ability is required to detect them.

The statement of the seller in which the article sold is warranted or guaranteed is known as an implied warranty.

According to the Magnuson-Moss Warranty and Federal Trade Commission Improvement Act, the consumer need not be informed of the warranty prior to the sale.

Explain product uniformity.

The sale of food or drink, to be consumed off the seller's premises, is not a sale.

Unless otherwise agreed, a merchant warrants that goods shall be delivered free of the rightful claim of any third person by way of patent or trademark infringement.

______ is information that the law presumes everyone knows by virtue of the fact that it is filed or recorded on the public record.

Which of the following is true of sale of food or drink?

All sellers, by the mere act of selling, make a warranty that they have good title and make rightful transfers.

Introduction to Law

Courts and Court Procedure

Business Torts and Crimes

Government Regulation of Business

Nature and Classes of Contracts

Offer and Acceptance

Capacity to Contract

Consideration

Defective Agreements

Illegal Agreements

Written Contracts

Third Parties and Contracts

Termination of Contracts

Nature of Personal Property

Special Bailments

Sales of Personal Property

Formalities of a Sale

Transfer of Title and Risk in Sales Con

Nature of Negotiable Instruments

Essentials of Negotiability

Promissory Notes and Drafts

Negotiation and Discharge

Liabilities of Parties and Holders in Due Course

Defenses

Nature and Creation of an Agency

Operation and Termination of an Agency

Employer and Employee Relations

Employees Rights

Labor Legislation

Introduction to Business Organization

Creation and Operation of a Partnership

Dissolution of a Partnership

Nature of a Corporation

Ownership of a Corporation

Management and Dissolution of a Corpora

Principles of Insurance

Types of Insurance

Security Devices

Bankruptcy

Nature of Real Property

Transfer of Real Property

Real Estate Mortgages

Landlord and Tenant

Wills, Inheritances, and Trusts

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