Deck 21: Sales and Lease Warranties

Question 1

The statement "This house paint will last five years" can be an express warranty.

Answer 1

True

Question 2

The statement "This painting is worth $10,000" does not create a warranty.

Answer 2

True

Question 3

The implied warranty of merchantability applies to the goods themselves,and not to the manner in which they are packaged.

Answer 3

False

Question 4

Under the implied warranty of merchantability,fungible goods need only meet the highest level of quality.

Question 5

A statement that a trailer has a capacity of 3,000 pounds would be treated as an affirmation of fact and creates a warranty.

Question 6

A model used in connection with selling goods will usually amount to a warranty that the goods will be as the model indicates.

Question 7

The implied warranty of fitness for a particular purpose need not meet the buyer's or lessee's expressed needs.

Question 8

It is not necessary to use formal words such as "warrant" or "guarantee" in order to create an express warranty.

Question 9

The statement "This car has a six-cylinder engine" is a statement of fact,but not a warranty.

Question 10

The implied warranty of merchantability requires that goods be fit for the ordinary purposes for which they are intended.

Question 11

Tom owns a hardware store at which he sells power tools.Tom sells a cordless drill to Victor who takes it home.Victor is injured when he uses it because the drill is defective.Victor can sue Tom for a breach of the implied warranty of merchantability.

Question 12

The implied warranty of fitness for a particular purpose applies only to merchant sellers and lessors.

Question 13

Generally,manufacturers are liable for express warranties made by wholesalers.

Question 14

The term "basis of the bargain" is a test that is strictly applied by the courts under the UCC.

Question 15

The statement "This car has an actual mileage of 25,000 miles" is an express warranty.

Question 16

The warranty of merchantability applies only to sales or leases by merchants.

Question 17

The implied warranty of merchantability includes a warranty that goods delivered in groups are of a consistent quality.

Question 18

Sam is a high school English teacher who holds a garage sale at which he sells an old cordless drill to a neighbor.When the neighbor uses the drill,he is injured because the drill is defective.The neighbor can sue Sam for a breach of the implied warranty of merchantability.

Question 19

Intent is necessary in order to create an express warranty.

Question 20

A statement of opinion is considered to be a warranty.

Question 21

Which of the following best describes an express warranty?

A) It is a written provision obligating the seller to repair or replace goods for a specified period of time.
B) It is any promise,oral or written,obligating the seller to repair or replace goods for a specified period of time.
C) It is any statement or other representation made with respect to goods.
D) It is any guarantee that the goods will pass without objection in the trade.

Question 22

The following will create an express warranty EXCEPT:

A) an affirmation of fact
B) a description of the item
C) an endorsement by a third party,such as the magazine Consumer Reports
D) a sample of the item

Question 23

The warranty of no infringement applies:

A) by operation of law,but only to merchant sellers
B) by operation of law to both merchant and nonmerchant sellers
C) only if expressly stated,and even then only to merchant sellers
D) only if expressly stated,but it can apply to both merchant and nonmerchant sellers

Question 24

A full warranty is a guaranty by the warrantor that the product will be repaired or replaced for free.

Question 25

A seller need not warrant the validity of the title to the goods it is selling as long as the transfer of title is rightful.

Question 26

Goods may be delivered to a buyer with a third-party trademark claim.

Question 27

The Magnuson-Moss Warranty Act regulates written warranties relating to consumer products.

Question 28

Implied warranties may not be disclaimed with general language,such as "as is" or "with all faults."

Question 29

Sellers of goods warrant that the goods they sell are delivered free from any third-party security interests.

Question 30

Which of the following best describes the warranty of title in connection with a leasing transaction?

A) Because ownership does not transfer,there is no warranty of title nor is there any similar warranty.
B) For lessees,the warranty of no infringements takes the place of the warranty of title.
C) For lessees,the warranty of title is replaced by a warranty against interference.
D) In a leasing transaction,the ownership status of the leased property is not of concern to the lessee,thus there is no warranty of title.

Question 31

Under the implied warranty of fitness for human consumption,it is implied that the food served is fit for human consumption.

Question 32

The term "warranty" may be defined as:

A) a contractual default
B) a contractual promise
C) caveat emptor
D) a tender of performance

Question 33

Software licenses may not contain disclaimers that limit the licensor's liability if the software malfunctions.

Question 34

Language such as "there are no warranties that extend beyond the description on the face hereof" is insufficient to disclaim the fitness warranty.

Question 35

The warranty against interference is the same as the warranty of quiet possession.

Question 36

Which of the following is presumed to become "part of the basis of the bargain?"

A) all statements of fact by the seller at the time the contract is made
B) all statements of opinion by the seller
C) most statements of value by the buyer
D) A and C only
E) A and B only

Question 37

The doctrine of caveat emptor means:

A) "Let the seller beware"
B) "Let the seller be liable for all damages"
C) "Let the buyer beware"
D) "That the legal remedy must be just and fair"

Question 38

Written disclaimers must be conspicuously displayed to be valid.

Question 39

The warranty of title,which is automatically imposed by the UCC,includes the following elements:

A) a warranty of good title
B) a warranty of no security interests
C) a warranty of no infringements,if the seller is a merchant
D) A,B,and C
E) A and B only

Question 40

Warranties may not be disclaimed.

Question 41

When a court finds that a warranty disclaimer is unconscionable,it can do the following EXCEPT:

A) not enforce the disclaimer clause
B) order specific performance
C) refuse to enforce the entire contract
D) limit the application of the disclaimer clause

Question 42

Sally buys a used riding lawn mower from the local mower dealership.The lawn mower had a sign on it that said "as is." The dealer made no promises concerning the performance of the lawn mower.When Sally attempts to use the lawn mower,the brakes fail,the lawn mower crashes into a wall,and Sally is injured.When Sally sues the dealer,what is the outcome?

A) The dealer wins; there were no express warranties and all implied warranties have been successfully disclaimed.
B) Sally wins; she can recover on the basis of express warranties only.
C) Sally wins; she can recover on the basis of implied warranties only.
D) Sally wins; she can recover on the basis of either express or implied warranties.

Question 43

Seller,a merchant,sells and delivers 1,000 units of product X to Buyer.Later,it is discovered that product X infringes upon a patent owned by XYZ,Inc.Further,all 1,000 units of product X were subject to a security interest in favor of RST Corp.Buyer sues the Seller for breach of warranty.In this situation,which of the following is true?

A) Seller wins; there was no warranty given in this transaction.
B) Seller wins; the only relevant warranty was one of title,and the seller had good title to the goods.
C) Buyer wins; there is a breach of the warranty of no infringements only.
D) Buyer wins; there is a breach of both the warranty of no infringements and of no security interests.

Question 44

Which of the following is true about the difference between express and implied warranties?

A) Express warranties apply to merchants and implied warranties apply to all sellers of goods.
B) Express warranties apply to merchants and implied warranties apply to nonmerchants.
C) Express warranties arise from conduct of the parties and implied warranties arise automatically by operation of law.
D) Implied warranties cannot be disclaimed,but express warranties can be disclaimed.

Question 45

A written contract contains an express warranty that the goods will be of "quality grade A." The seller wishes to disclaim this express warranty.How may the seller accomplish this?

A) This express warranty may not be disclaimed.
B) By language stating that no warranties,express or implied,are contained in this contract.
C) By general language,such as "as is" or "with all faults."
D) By specifically mentioning "merchantability."

Question 46

Which of the following would be a breach of the implied warranty of merchantability?

A) a lawn mower that does not cut the grass
B) a cherry pit in a cherry pie,if using the foreign substance test
C) a wall paint that works fine for all walls,except for stucco,which is what the buyer bought it for
D) a stereo that had been stolen by the seller

Question 47

Under the implied warranty of merchantability,which of the following is true?

A) Fungible goods must be of the highest quality unless otherwise stated.
B) The warranty applies to the intended uses of a product as well as the foreseeable misuse of the product.
C) A lot (group) of goods meets the warranty requirement so long as,on average,the goods are of sufficient quality,even if there is considerable variation and some of them are of inferior quality.
D) The warranty includes a requirement that the goods be adequately contained and packaged.

Question 48

Which of the following is true about warranty disclaimers?

A) All disclaimers are ineffective in transactions with an express warranty.
B) A contract with both an express warranty and an inconsistent disclaimer will be unenforceable due to vagueness.
C) Express warranties will control over inconsistent disclaimers.
D) Warranty disclaimers can never apply to the implied warranty of title.

Question 49

Which of the following statements could create an express warranty?

A) "This is the best car available in town."
B) "This car is worth twice the price."
C) "This car was overhauled last year."
D) "This car is quite a bargain."

Question 50

The implied warranty of fitness for a particular purpose is applicable to:

A) all sales made by merchants,unless disclaimed
B) all sales made by merchants or nonmerchants,unless disclaimed
C) sales made by merchants only,but only if certain other requirements are met
D) sales made by either merchants or nonmerchants,but only if certain other requirements are met

Question 51

Which of the following is not one of the aspects of the implied warranty of merchantability?

A) The goods are fit for the ordinary purposes for which they are used.
B) The goods are adequately contained,packaged,and labeled.
C) The price of the goods is not excessive,taking into account the goods' grade and quality.
D) The goods are of such quality that they pass without objection in the trade.

Question 52

Which of the following would create an express warranty?

A) A seller promising at the time of sale that he will repair any defects or problems for a year from the sale.
B) A seller showing the buyer a model and saying,"Yours will be just like this only blue instead of red."
C) A seller taking a sample from a bin and indicating the purchase will conform to the sample.
D) All of the above create warranties.
E) None of the above create warranties.

Question 53

To which of the following transactions would the implied warranty of merchantability apply?

A) the sale of a used toaster by a homeowner at a garage sale
B) the purchase of a bag of potato chips from a vending machine
C) the sale of a new house by a contractor
D) all of the above
E) none of the above

Question 54

Where a seller has breached a warranty,what is the buyer's normal measure of damages?

A) The difference in the contract price,and the value of the good as it was warranted.
B) The difference in the contract price,and the amount that the buyer could receive by reselling the good.
C) The difference in the value of the good as warranted,and the value of the good as it actually is.
D) The difference in the value of the good before it was purchased,and the value in the buyer's hands after purchase.

Question 55

Which of the following is correct with regard to express warranties?

A) Commendations,or puffing,of the goods do not create an express warranty.
B) It is always easy to distinguish between a statement of fact and an opinion.
C) A statement of the value of goods will create an express warranty.
D) Manufacturers are usually liable for express warranties made by retailers.

Question 56

Which of the following is not necessary in order for the implied warranty of fitness for a particular purpose to apply?

A) The seller knows or has reason to know of the buyer's intended use of the good.
B) The seller is a merchant.
C) The seller states that the goods will serve the purpose of the buyer's intended use.
D) The buyer buys in reliance on the seller's skill and judgment.

Question 57

Which of the following is true about express warranties?

A) A retailer is generally liable for any express warranties made by the manufacturer for products sold by the retailer.
B) A manufacturer is generally liable for any express warranties made by the retailer in connection with the sale of the product.
C) A buyer of goods can recover for breach of warranty only if he can show that the warranty was the primary factor for buying the good.
D) A statement of opinion can form the basis of a breach of warranty claim if the opinion was not made on reasonable assumptions.

Question 58

Which of the following warranties apply to merchants only?

A) warranty of no infringements and warranty of merchantability
B) warranty of no security interests and warranty of merchantability
C) warranty of merchantability and warranty of fitness for a particular purpose
D) warranty of merchantability and warranties of quality

Question 59

Buyer enters a paint store and tells the clerk that she needs paint that will cover and stick to a stucco wall.The seller tells her that brand X paint will do the trick.Buyer purchases brand X paint and paints her stucco wall,but three weeks later the paint peels off.This would be a breach of which kind of warranty?

A) implied warranty of merchantability
B) implied warranty of fitness for a particular purpose
C) an express warranty
D) implied warranty of no infringements

Question 60

Which of the following statements regarding the Magnuson-Moss Warranty Act is NOT true?

A) It is a federal law.
B) It requires a seller who gives an express warranty to label that warranty as either full or limited.
C) It applies to all goods.
D) It prohibits a seller who gives an express warranty from disclaiming the implied warranties.
E) A and C only are NOT true.

Question 61

Steve was eating a chicken salad sandwich at a restaurant and began choking on a chicken bone.Which of the following is correct?

A) Steve would not be able to recover under either the Foreign Substance Test or the Consumer Expectation Test.
B) Steve would be able to recover under the Foreign Substance Test,but not the Consumer Expectation Test.
C) Steve would not be able to recover under the Foreign Substance Test,but would be able to recover under the Consumer Expectation Test.
D) Steve could recover under both the Foreign Substance Test and the Consumer Expectation Test.

Question 62

Elvira went to the local discount store for her weekly shopping,picking up a number of items.Over the next few days,she had problems with several items.She had purchased a combination phone and answering machine,but when she opened the box,she noticed that the one inside was different than the one pictured on the package.The one inside was lacking several features of the one pictured on the box.When she opened a box of crackers to snack on before dinner,they did not look nearly as appetizing as the ones pictured on the box.Also,she prepared some brownies from a mix,but her brownies looked nothing like the ones pictured on the box.Upon closer inspection,she noticed that on the bottom of the box for the phone,it said,"The picture is for illustration purposes only.The picture might show features not included on this particular phone.Please refer to the features list on the side panel for the features on this model." Discuss whether any warranties were breached.

Question 63

A seller agrees to deliver to a buyer certain carpet.The written contract calls for "1,000 square yards of carpeting,strands to be one-half inch long and twisted,400 strands per square inch,made from our nylon-wool blend,color navy blue." The contract,at the bottom,contained the following clause: "This contract contains no warranties,either express or implied." When the carpeting is delivered,the strands are only three-eighths inch long,are not twisted,and there are only 350 strands per square inch.The buyer sues the seller for breach of express and implied warranties.Discuss the buyer's contentions and the seller's response.

Question 64

Hank was shopping for a new bike when he saw a used one at a local shop that interested him.He asked to take it for a test ride for an hour,and the shop's owner responded by telling him he could try it out all day if he wanted to.The shop's owner also invited Hank to have it checked out at another shop if he wanted to.Hank took the bike for several hours,riding on the city streets near the bike shop.He never rode it really fast,nor took it down any really steep hills.Hank noticed that the back tire was worn,but decided he wanted the bike anyway,and purchased a new tire at the time he got the bike.There was no mention of any warranty or disclaimers of warranty.Hank rode the bike a few days and it performed to his liking.On Saturday,Hank headed into the mountains on the edge of town.After climbing for over an hour,he turned for the coast home.He soon found out that the brakes were in bad shape,and barely stopped him on one steep section.Furthermore,the wheels were out of balance at high speeds.After getting home,Hank was inspecting the brakes and noticed that the frame had a small crack in it.He took the bike to another shop for an inspection and evaluation and learned that the crack had occurred where the frame had rusted from the inside out.Discuss whether Hank has any breach of warranty claims against the shop where he purchased the bike.

Question 65

Why do you think there are so many rules and laws regarding warranties,their language,and how they arise and can be disclaimed? If you were to simplify these rules,how would you do so?

Question 66

JKL Company manufactures and sells home theater equipment for home use.The company is contemplating what type of warranty it should place on its products,and wishes to know the ramifications of the Magnuson-Moss Warranty Act.Which of the following statements is true?

A) Magnuson-Moss applies only to commercial goods,so JKL will not be affected.
B) Magnuson-Moss requires that JKL give a written warranty on its goods.
C) Magnuson-Moss will not affect implied warranties.
D) Magnuson-Moss requires that any written warranty be labeled as either full or limited.

Question 67

Should the size of a package amount to a warranty that the contents fill the container as much as practicable? There are numerous products where the packaging contains much dead space,such as in a potato chip bag.What do you think?

Question 68

Molly bought a used car from Best Auto Co.While Molly was shopping there,the salesman showed her a car,which he said was a 1998 Chrysler.The salesman also said,"This is the best car in town," and,"This car is worth at least $9,000.I had it appraised last week for $9,200.Any other appraiser would say it is worth $9,500,at least.The engine is in great shape,and it has just had a tune-up." Molly paid $8,000 for the car.Shortly after purchasing the car,when receiving the paperwork,Molly learned that it was a 1997 Chrysler,that it was worth only $6,000,and that it was not the best car in town.Discuss whether any express or implied warranties apply here.

Question 69

Greencutter Lawn Equipment sells lawn mowers and other lawn-care equipment.Greencutter wants to provide a written warranty with its equipment under which it will repair the equipment for 2 years from the date of purchase.Which of the following is true in this circumstance under the Magnuson-Moss Warranty Act?

A) Greencutter should call this a full warranty if the repair obligation covers all parts of the lawn mower.
B) Greencutter is unable to modify or limit the implied warranties on the mower.
C) The Act requires that the length of any express warranty be reasonable considering the type of product.
D) Greencutter must clearly indicate whether any warranty is full or limited.

Question 70

Mary contracted to buy a used tractor for $12,000.Mary was told that the engine on the tractor had been used 1,100 hours,when if fact it had been used 2,500 hours.If the tractor's engine had actually been used only 1,100 hours,it would have been worth $14,000 when she bought it.Given the 2,500 hours,the tractor was worth only $9,000 when she bought it.Mary used it for most of a season before it began having problems.She discovered the discrepancy in hours from maintenance records at another dealership.When discovered,the tractor had 2,950 hours,and it was worth only $7,500.How much can Mary recover on a breach of warranty claim?

Question 71

Is the Magnuson-Moss Warranty Act tilted too much in favor of the consumer? If you think so,how would you change it?

Question 72

John bought a used bicycle from a bicycle dealer for $600.The sale was made "'as is,without warranties of any kind" with no other mention of warranties.John had some problems with the gears shifting,so he took it back to the store,at which point a store employee refused to return it because it was stolen before the store received it.Have any warranties been breached?

Question 73

States apply two tests when deciding whether there has been a breach of the warranty of fitness for human consumption.What are these two tests and how do they differ? Which test is better? Should one or the other apply in all situations,or should one test apply in some situations and the other apply in other situations?