Deck 12: Sales and Product Liability

Question 1

Elizabeth worked as a salesperson in a carpet store.She was in the process of divorcing her husband and needed some money.Elizabeth sold her wedding ring.Elizabeth is considered a merchant with regard to the sale of the ring.

Answer 1

False

Question 2

Wimble ordered $800 worth of pro-quality luminescent orange tennis balls from Sports Unlimited.On June 1,Sports Unlimited shipped standard white tennis balls that were rejected by Wimble.Wimble bought the same number of pro-quality luminescent orange balls from another supplier the same day for $550.In a suit against Sports Unlimited,Wimble may recover $800.

Answer 2

False

Question 3

UCC Article 2 provides rules that enable parties to make contracts for the sale of goods quickly and informally.

Answer 3

True

Question 4

Stanziano Construction needs a backhoe to complete a project.If it pays Hofmann Rentals for temporary use of the equipment,the transaction will be governed by:

A) Article 2 of UCC.
B) Article 2A of the UCC.
C) Article 3 of the UCC.
D) bulk transfer law.

Question 5

Myrtle walks into Hank's Hardware Store and says,"I need metal storage shelves that can hold 500 pounds." Hank directs her to a metal storage shelving system.Myrtle buys the shelving recommended by Hank.When Myrtle puts 475 pounds of weight on the bottom shelf,it breaks.Hank's Hardware breached the warranty of merchantability.

Question 6

Glenn,a housewares buyer,goes to a trade show where he visits a booth sponsored by a large manufacturer.He inquires about some food processors,but does not place an order.A week after the trade show,Glenn receives a fax from the manufacturer showing that Glenn ordered six dozen of the food processors at the special show price.Glenn needs to object within ten days or he could be held to the purchase,even though he knows the fax is incorrect.

Question 7

The UCC:

A) has evolved to provide merchants with rules that would meet their unique business needs.
B) frequently holds nonmerchants to a higher standard of conduct than merchants.
C) allows a merchant to be held to an oral contract if he received written confirmation of it only if the merchant signed the confirmation.
D) All of the above.
E) Only (a) and (b).

Question 8

Harriett raises and sells hippos.In order to keep her hippos happy and healthy,she feeds them Hippo Chow,which she buys from the local pet store.Under the UCC,Harriett is:

A) a merchant of both hippos and Hippo Chow.
B) a merchant of hippos, but not of Hippo Chow.
C) a merchant of Hippo Chow, but not of hippos.
D) not a merchant of either hippos or Hippo Chow.

Question 9

Which of the following types of property would be classified as "goods" under Article 2 of the UCC?

A) Cash in hand.
B) A stock certificate.
C) A computer.
D) A membership to a health club.

Question 10

To form a valid contract for the sale of goods,if the acceptance contains a price or warranty term different from the term in the offer,the parties have to renegotiate until they reach agreement.

Question 11

No section of the Uniform Commercial Code has any legal effect until it is adopted by a state legislature.

Question 12

Megan agrees to sell Neff her quartz watch but they do not specify a price.In such a case,the court would not enforce the agreement because all of the essential terms are not present.

Question 13

A product liability case may be brought in warranty,negligence,or strict liability,but it must have the element that a person or business has been hurt by goods.

Question 14

Rachel,a retailer,sends a preprinted purchase order offering to buy goods from Snidley Supply.Snidley acknowledges Rachel's offer with a preprinted acceptance form.The terms of the two forms do not mirror each other.To analyze whether an enforceable contract exists,one must first determine whether the new language in the acceptance is an additional term or a different term.

Question 15

Strict liability is based on contract law.

Question 16

Green Mountain Gift Shop ordered ten dozen evergreen wreaths from Carter Crafts to be delivered by November 28,time being of the essence.If Carter fails to deliver the wreaths,Green Mountain would be entitled to incidental damages,but could not obtain consequential damages or the loss of profit it expected to make by reselling the wreaths to retail customers for the Christmas season.

Question 17

In which of the following situations is the seller a merchant under Article 2 of the UCC?

A) Paul, a full-time college student, sold his textbooks to State Bookstore.
B) Randall, a part-time college student and full-time father, sold his textbooks to a friend.
C) Zompa Inc. , a toy manufacturer, contracted to sell dolls to TonTon Department Store.
D) In all of the above situations the seller is a merchant.

Question 18

Uncle Brandon promises to give his motorcycle to you at the end of the month.This transaction is governed by UCC,Article 2,because a motorcycle is within the definition of "goods."

Question 19

Lorene,an artist,orally agrees to sell Sabrina a painting for $600.While Lorene is busy talking on the phone,Sabrina writes her a note on the back of an envelope she finds in her purse.The signed note states that she will stop by the studio to pick up the painting within the week.Sabrina changes her mind about the painting,and when Lorene sues to enforce the contract,Sabrina defends on the basis of the statute of frauds.Sabrina will succeed with this defense.

Question 20

The UCC does not apply to contracts for the sale of goods if the value of the goods is less than $500.

Question 21

UCC Section 2-207 contains many changes to the common law,but one basic requirement that is not changed by this statute is that to create a contract:

A) when one party makes an offer, the offeree must accept those exact terms.
B) the parties must intend to create a contract.
C) a merchant offeree who adds an additional term to the offer made by another merchant must, for the term to become part of the contract, obtain an express approval of the term by the other party.
D) a merchant offeree who adds a different term to an offer made by another merchant will create a contract which includes the new and different term.

Question 22

In order for a warranty of fitness for a particular purpose to be in effect:

A) it must be expressed either orally or in writing.
B) the seller must know the buyer is relying on the seller's skill or judgment.
C) the seller, at the time of contracting, must know about a particular purpose for which the buyer wants the goods.
D) All of the above.
E) Both (b) and (c).

Question 23

UCC Section 2-204 provides three important rules that enable parties to make a contract quickly and informally.These include all but which of the following?

A) The parties may make a contract in any manner sufficient to show that they reached an agreement.
B) Affixing a seal to a writing evidencing a contract for sale of goods constitutes writing a sealed instrument and causes to law of sealed instruments to apply to such contract.
C) The UCC will enforce a deal even though it is difficult to say exactly when it was formed.
D) A court may enforce a bargain even though one or more terms were left open.

Question 24

A sales representative at Oxtren,Inc.orally told the purchasing agent at Wety,Inc.that its industrial saw will cut through metal up to five inches thick.Wety purchased the saw.Which statement is correct concerning the claim that the saw can cut through metal up to five inches thick?

A) The claim is an express warranty.
B) The claim is an implied warranty of merchantability.
C) The claim is not a warranty because it is not in writing.
D) The claim is not a warranty because it is sales puffery.

Question 25

When Angelena was shopping for a new lawn mower,the salesman,Mark,told her the model she was interested in cuts an 18" swath and the only maintenance it needs is an oil change and a new sparkplug at the beginning of each mowing season.He hands her a warranty booklet which describes that model as a mulching mower and says it has a five-year full warranty.The booklet also disclaims "any warranties or statements made by any agent or salesperson or that appear elsewhere in this booklet." The effect of the written disclaimer is:

A) that it is valid to disclaim only the written warranties within the booklet.
B) that it is valid to disclaim both oral and written warranties.
C) it does not disclaim either the oral or written warranties.
D) that it disclaims the oral warranties, but not the written warranties.

Question 26

Newton,a gun dealer,offers to sell a rare civil war musket to Rush,another dealer,for "$15,000,insurance and shipping paid by buyer." Rush responds,"I accept.Insurance and shipping costs divided equally between seller and buyer." The parties:

A) do not have a contract since the acceptance violated the mirror image rule.
B) do not have a contract since Rush's response was a counteroffer.
C) have a contact and, in the majority of states, the terms of the offeree control.
D) have a contract and, in the majority of states, the different terms will cancel each other out.

Question 27

Daddy buys an electric car for his 10-year-old son.Daddy follows the directions for assembly carefully,but the son gets an injuring shock when he sits in the car.If Daddy and son sue the manufacturer for negligence,they will:

A) be successful only if they can prove that the car manufacturer knew of the defect and failed to correct it.
B) be successful only if they can prove that the car manufacturer failed to use reasonable care in designing, manufacturing, or warning the purchasers about intended uses and foreseeable misuses.
C) lose, because the son has no privity of contract and therefore no standing to sue.
D) not be successful if the car was sold "AS IS. "

Question 28

Thompson buys a used paint sprayer from the local paint store.The sprayer had a large sign on it which said "AS IS." The dealer made no promises or statements concerning the performance of the paint sprayer.When Thompson attempts to spray paint his house,the trigger on the sprayer sticks in the "on" position and before Thompson can pull the electrical cord to cut the power,paint is sprayed all over the neighbor's house and prize Borzoi dog that is scheduled to be shown in a dog show the next day.Thompson sues the seller.Who wins?

A) Dealer wins; there were no express warranties and all implied warranties have been successfully disclaimed.
B) Thompson wins; he can recover on the basis of express warranties.
C) Thompson wins; he can recover on the basis of the implied warranty of merchantability because the word "merchantability" was not used in the disclaimer.
D) Thompson wins; he can recover on the basis of either express or implied warranties.

Question 29

Hennessee sold a log splitter to Byrd "AS IS." Hennessee has disclaimed:

A) strict liability.
B) liability for negligence.
C) all implied warranties.
D) All of the above.

Question 30

Van is using his wrench as a hammer when the wrench breaks and a piece flies off,injuring his neighbor who is helping Van change a tire on Van's car.If Van sues the tool manufacturer,its best defense will be:

A) consent.
B) warranties have been disclaimed.
C) product misuse.
D) that the claim is an economic loss only.

Question 31

Which of the following warranties provides that the goods will be fit for the ordinary purposes for which they are used?

A) Infringement.
B) Fitness for a particular purpose.
C) Merchantability.
D) Title.

Question 32

Which of the following contracts requires a writing under the UCC,Article 2?

A) Jeremy, a full-time student, sold his snow blower to a friend for $450.
B) Jeremy, a full-time student, purchased a used computer from Office Plus for $300.
C) A toy manufacturer contracted to sell dolls valued at $10,000 to a department store.
D) Tobias Department Store contracted to sell Jenny a $400 doll.

Question 33

Mason bought a rotisserie in preparation for a party he was planning.When he put a chicken on the rotisserie,it would not rotate,but stayed in one position where it burned the chicken on one side and left it raw on the other.When he returned the rotisserie to the store,the salesperson disclaimed any responsibility because he had never told Mason the rotisserie would rotate the food as it cooked.Does Mason have any recourse?

A) No, the salesperson did not make any express warranties.
B) Yes, the salesperson made an express warranty just by selling the goods.
C) Yes, although the salesperson did not make any express warranties, the UCC imposes an express warranty on the sale.
D) Yes, although the salesperson did not make any express warranties, the UCC imposes an implied warranty of merchantability under which the rotisserie is guaranteed to be fit for the ordinary purposes for which it is used.

Question 34

Under the UCC statute of frauds,the writing must:

A) state quantity.
B) state price.
C) be signed by both parties.
D) be notarized.

Question 35

Master Glue Hairspray,Inc.contracts to purchase 100 umbrellas with its logo and slogan,"A spray a day keeps the rain and wind away!" specially printed on the umbrellas and its 1-800 telephone number on the umbrella handle.After the seller completes the order,Master Glue refuses to accept or pay for the umbrellas.Because of the special logo and telephone number,the seller has been unable to find a new buyer.If the seller sues Master Glue,what is the proper measure of the seller's damages?

A) Contract price minus market value of the goods at the time of delivery.
B) Contract price.
C) Lost profits.
D) Cover price minus contract price.

Question 36

Meister Bros.shipped 250 radiator belts to fill Braybon's order.Quality control measures had been in place in Meister's factory when the belts were manufactured.When Braybon received the order one day before it was due,it notified Meister that it rejected the belts because of a variation from the contract specifications.Meister,although it believed the original belts met the contract specifications,notified Braybon that it would supply conforming goods within one week.When the conforming goods arrive in one week,Braybon:

A) does not have to accept them because the contract deadline has passed.
B) does not have to accept them because Meister Bros. only has one chance to fill the order correctly.
C) should accept them because Meister Bros. has a right to cure even after the contract deadline under these circumstances.
D) does not have to accept them because Meister Bros. failed to meet its UCC requirement to deal in good faith.

Question 37

A buyer who properly rejects goods:

A) must pay the cost of returning the rejected goods.
B) may do so by merely not paying for them.
C) must notify the seller within a reasonable time.
D) must offer to cover.

Question 38

Office Plus,an office supply store,ordered 600 blank CDs from Curtis Co.,a manufacturer of computer products.Office Plus placed the order using a preprinted purchase order form;Curtis acknowledged the order by sending a preprinted acceptance form back to Office Plus.Unlike Office Plus' form which says nothing about packaging,Curtis's form specifies that the CDs will be packaged with 10 per box,30 boxes per case.Which statement is correct?

A) The UCC does not cover CDs.
B) Curtis's packaging term is a different term which materially changes the offer. There is no contract.
C) Curtis's packaging term is a nonmaterial additional term and therefore is part of the contract unless Office Plus promptly objects to the term.
D) The UCC does not cover the contract because both parties are merchants.

Question 39

A seller's remedies for breach of a sales contract by the buyer include all but which of the following?

A) Refusal to deliver the goods.
B) Cover.
C) Resale.
D) Suit for the contract price.

Question 40

In strict liability cases,most courts use which of the following tests for design and warning cases?

A) Consumer expectation.
B) Risk-utility.
C) Unreasonable conduct.
D) Either (a) or (b).

Question 41

Sean of Sean's Shrimp House was enjoying a cup of cappuccino while visiting with Ollie at Ollie's Ocean Front Bar & Grill.During the course of their conversation,Sean agreed to supply 100 pounds of shrimp per month for the next year to Ollie's restaurant at the price of $2.50 per pound.When Sean got back to his office,he sent a written confirmation of the agreement to Ollie.Six weeks after receiving the confirmation Ollie wrote back,stating that he had not agreed to the price of $2.50 per pound.Is Ollie bound to the confirmation?

Question 42

Oxtren,Inc.is a tools wholesaler.Oxtren sent M&E Tools a purchase order offering to buy 200 Model 308 milling & drilling machines with R-8 spindles.The purchase order stated the credit term to be 2% discount if payment was made in 10 days,with the full amount due in 30 days.It did not include a forum selection clause.M&E responded with an acceptance form accepting the offer.The acceptance form,however,stated that full payment was due on delivery and that disputes under the contract would be settled by arbitration.
(A)Do the parties have an agreement?
(B)What is the payment term?
(C)Is the arbitration clause part of the agreement?

Question 43

Peter purchased a new car from Monster Motors.As he drove away from the dealership in the new car,the steering mechanism failed.Peter lost control of the car and plunged down an embankment.Peter was seriously injured.If Peter sues the car manufacturer under strict liability,what does he have to prove? Will Peter be successful?

Question 44

Identify and explain the two tests courts have adopted for design and warning cases under strict liability.

Question 45

Jasmine agrees in writing to purchase 1,500 tons of recycled glass from Louie,the price to be determined at the time of delivery.Is such an agreement enforceable? Compare the common law with Article 2 of the UCC.