Deck 23: Warranties

Question 1

To create an express warranty, a reasonable buyer must regard a seller's representation of fact-found, for example, in an ad-as part of the basis of the bargain.

Answer 1

True

Question 2

Warranties of title arise automatically in most sales contracts-a thief breaches the warranty by selling stolen goods.

Answer 2

True

Question 3

A seller's statement of opinion or recommendation about goods, such as a medical device's appropriateness for an unapproved use, is not an express warranty.

Answer 3

True

Question 4

Express warranties cannot be found in marketing brochures or other promotional materials, which are, by definition, only puffery.

Question 5

A description of goods, such as a product-identification label on the outside of a box that contains the product, is not an express warranty.

Question 6

A neighbor selling her snow blower at a garage sale does not make an implied warranty of merchantability because she is not in the business of selling goods of the kind.

Question 7

A salesperson's statement of fact about goods, such as a product's capability, made during the bargaining process, is not an express warranty.

Question 8

A merchant seller's unsuccessful attempt to repair or replace defective parts is not a breach of warranty if the attempt was undertaken in good faith and with the skill of similarly situated merchant sellers.

Question 9

An express warranty arises when a seller or lessor indicates that the goods are the "best" of the kind of goods sold.

Question 10

If a buyer is sued by a third party holding trademark rights in certain goods, the buyer must notify the seller or forfeit the right to recover the expenses of the suit from the seller.

Question 11

In an action based on breach of implied warranty, a buyer must show that the warranty existed and its breach proximately caused the damage sustained.

Question 12

On a breach of warranty, unless the parties have agreed to modify the remedies available, a buyer or lessee cannot rescind the agreement.

Question 13

Because a warranty imposes a duty on the seller, a breach of warranty is a breach of the seller's promise.

Question 14

A merchant who is in the business of selling certain goods makes an implied warranty of merchantability every time she sells any type of merchandise.

Question 15

Sellers can effectively disclaim or modify title warranties by asserting that they are transferring only such rights, title, and interest as they have in the goods.

Question 16

Goods that are of only average, fair, or medium-grade quality are not merchantable.

Question 17

If a creditor repossesses goods from a buyer who bought the goods knowing they were subject to a prior claim, the buyer can recover from the seller for breach of warranty.

Question 18

Determining whether a statement constitutes an express warranty can depend on the context in which the statement was made.

Question 19

An express warranty can be created only by an express warranty provision in a sales or lease contract.

Question 20

A seller's statement about the value or worth of goods, such the price that might be charged by a competitor, is not an express warranty.

Question 21

To give rise to an implied warranty of fitness for a particular purpose, a seller must have actual knowledge of a buyer's particular purpose.

Question 22

Because the UCC sections dealing with warranty disclaimers do not refer to unconscionability, the UCC's unconscionability standards do not apply to warranty disclaimers.

Question 23

In a sale of camping equipment from Outdoor Outfitters to Pedro, a consumer, if the parties have not agreed to limit or modify the remedies available, on a breach of warranty

A)the buyer has no recourse against the seller.
B)rescission of the parties' agreement is the only remedy.
C)the buyer can sue to recover damages.
D)repair or replacement is the only option.

Question 24

Every seller is required to give a written warranty for consumer goods in a single document in "readily understandable language."

Question 25

Coal Corporation buys a Durable-brand bulldozer from Equipment Inc. Coal is unaware that Finance Company holds a lien against the bulldozer. Finance repossesses the goods. Coal can recover for breach of warranty from

A)Equipment.
B)any of the parties.
C)Durable.
D)Finance.

Question 26

Goods that are reasonably fit for the ordinary purposes for which such goods are used are automatically sold free of any implied warranties.

Question 27

Merchantable food is food that is fit to eat based on consumers' reasonable expectations.

Question 28

If it is unreasonable for two warranties to be considered consistent, the intention of the parties determines which is dominant.

Question 29

Holiday Corporation sells Idyll-brand campers and trailers. Under most circumstances, Holiday will be presumed to have warranted that its title to the goods is

A)the same as every other merchant who deals in goods of the kind.
B)none of the choices-a warranty of title is not presumed.
C)good and valid.
D)only such as the seller has acquired in the goods.

Question 30

Inconsistent warranties are construed to effectively render each other invalid.

Question 31

If it is unreasonable for two warranties to be considered consistent, the intention of the parties determines which is dominant.

Question 32

It is not possible for the implied warranty of merchantability to be breached if a merchant does not know or could not have discovered that its product was defective.

Question 33

Jin buys a used car from Klee. Jin knows that Loan Company has a security interest in the car but is not aware that Klee has missed several payments on the loan. Loan repossesses the car. Jin can recover for breach of warranty from

A)Klee but not Loan.
B)neither Klee nor Loan.
C)Loan but not Klee.
D)Klee or Loan.

Question 34

Rent-From-Us Inc. leases Speedy-brand moving vans. Under most circumstances, the lessor will be presumed to have warranted that its title to the goods is

A)the same as every other merchant who deals in goods of the kind.
B)none of the choices-there is no warranty of title in lease contracts.
C)good and valid.
D)only such as the lessor has acquired in the goods.

Question 35

To protect a buyer from surprise, a warranty can be limited only by general, ambiguous language.

Question 36

A buyer who refuses to inspect goods when requested by the seller assumes the risk that the goods are defective.

Question 37

Express and implied warranties do not displace each other-more than one warranty can cover the same goods in the same transaction.

Question 38

Because each type of warranty is created in a different way, the manner in which a warranty can be disclaimed varies with the type of warranty.

Question 39

An implied warranty can arise as a result of a well-recognized trade custom that a court could infer the parties intended to apply to their contract.

Question 40

A bar of soap is not merchantable if stepping on it would cause its user to slip and fall.

Question 41

Cato, a salesperson for Durable Sportswear Corporation, tells Elan, a buyer for Footwear Inc., that Durable's athletic shoes are made of certain materials. This is

A)an express warranty.
B)an implied warranty.
C)a statement of opinion.
D)puffery.

Question 42

Rena is a book dealer and an expert in the publications of Shakespeare's plays. She tells Toby, an investor in rare books, that in her opinion a certain bound volume is an early edition of several Shakespearean dramas. Rena has warranted

A)nothing.
B)the basis for a bargain between Toby and the owner of the volume.
C)the appropriateness of the volume as an investment.
D)the accuracy of her opinion.

Question 43

Glass Company and competitive merchants who deal in goods of the same kind assert that their products are reasonably fit for the ordinary purposes for which such goods are used. This is

A)an express warranty.
B)an implied warranty.
C)a warranty of title.
D)puffery.

Question 44

Home Remodel Inc. and Ivan enter into a contract for a sale of countertops. Home, a merchant who deals in goods of the kind sold, notes that its goods come with an implied warranty of merchantability. Under the UCC, this means that the goods are reasonably

A)fit for the buyer's particular purpose.
B)fit for the ordinary purpose for which such goods are used.
C)suitable for resale at an acceptable price.
D)the best that money can buy.

Question 45

Trucks Inc. and United Express Service enter into a contract for a lease of trucks. The lessor is a merchant that deals in goods of the kind leased. Under the UCC, an implied warranty of merchantability arises

A)automatically.
B)only if the lessee asks for it.
C)only if the lessor expresses such a warranty.
D)only in conjunction with sales, not lease, contracts.

Question 46

Singh, a consumer, leases sheet music from Tunes Inc. for a public performance. United Music Corporation, which holds a copyright on the music, sues Singh to stop the performance without a royalty payment. Singh fails to notify Tunes of the suit within a reasonable time. The lessee

A)can sue the lessor to recover the expenses of the suit.
B)loses any remedy against the lessor for liability established in the suit.
C)can raise the failure to notify as a defense in copyright holder's suit.
D)can assert this failure to delay the litigation, but it is not a defense.

Question 47

To create an express warranty, a seller or lessor

A)does not have to use formal words.
B)must use the word "warrant."
C)must use the word "guarantee."
D)must use the word "express."

Question 48

A warranty that the law derives by inference from the nature of a transaction or the relative situations or circumstances of the parties is

A)an express warranty.
B)an implied warranty.
C)a warranty of title.
D)not a warranty.

Question 49

A representation concerning the quality, condition, description, or performance potential of goods is

A)an express warranty.
B)an implied warranty.
C)a warranty of title.
D)not a warranty.

Question 50

Bren buys a new motorcycle from Cycles Inc. The most important factor in determining whether an express warranty is created is whether

A)Bren expresses to Cycles what she wants warranted.
B)Bren's desire for the cycle becomes part of her motivation to deal.
C)Cycles' expression to Bren of what it expects from its customers.
D)Cycles' promise becomes part of the basis of the bargain.

Question 51

Gabe, a salesperson for Headphones Inc., tells Ike, a potential customer, that Headphones' products "last a lifetime." This is

A)an express warranty.
B)an implied warranty.
C)a statement of value.
D)puffery.

Question 52

A label reads, "Box contains one bass clarinet." This creates

A)an express warranty that the goods conform to the description.
B)an implied warranty that the goods are merchantable.
C)a statement of opinion that the goods are in the package.
D)a statement of value or worth about the goods.

Question 53

Precision Parts Corporation and competitive merchants who deal in goods of the same kind assert that their products are of the proper quality. This is

A)an express warranty.
B)an implied warranty.
C)a warranty of title.
D)puffery.

Question 54

Lima buys a new car from Motor City Inc. In the first month after the purchase, the car repeatedly fails to meet standards of quality and performance. To prevail against Motor in a lemon-law dispute, Lima must

A)give the dealer or manufacturer an opportunity to remedy the problem.
B)take the car to an expert third party for an independent inspection.
C)file a court action without prior notice of the defect to the dealer.
D)have reason to know of the cause of the failure.

Question 55

Packaged Foods Inc. and competitive merchants who deal in goods of the same kind imply that their products are properly packaged and labeled. This is

A)an express warranty.
B)an implied warranty.
C)a warranty of title.
D)puffery.

Question 56

Fatima asks Gianni, a salesperson for Hues & Colors, for a gallon of paint of a certain color and suitable for interior walls. Gianni sells her a gallon of interior paint of a different color. Gianni has breached

A)an implied warranty of fitness for a particular purpose.
B)the implied warranty of merchantability.
C)an implied warranty for the ordinary purpose of the goods.
D)no warranty.

Question 57

Creekside Mill enters into a contract for a sale of lumber to Development Company. The mill knows the purpose for which the buyer will use the goods. Under the UCC, an implied warranty of fitness of a particular purpose arises if

A)the buyer relies on the seller to select suitable goods.
B)the goods are merchantable.
C)a particular purpose coincides with the ordinary purpose of the goods.
D)the seller believes that a product is fit for a particular purpose.

Question 58

Jem, a salesperson for Kitchens Inc., shows Lana, a buyer for Metro Diner, display items in Kitchens' showroom, stating that any purchased equipment will match the display. This is

A)an express warranty.
B)an implied warranty.
C)a statement of opinion.
D)puffery.

Question 59

In determining the reasonableness of a buyer's reliance on a seller's statement purported to be an express warranty, it can be considered that a reasonable person is more likely to rely on

A)an expression of puffery.
B)a feature asserted to be "always" or "never."
C)an oral statement by a salesperson.
D)a written statement in an ad.

Question 60

Bike Shop sells a trail bike to Cian. When Cian rides the bike, the frame breaks apart. The cause is something that Bike Shop did not know about and could not have discovered. This is a breach of

A)a warranty of title.
B)the implied warranty of merchantability.
C)an express warranty.
D)puffery.

Question 61

A sales contract for a new car states that the vehicle is "warranted to be free from defects for 48,000 miles or forty-eight months, whichever occurs first." This statement creates

A)an express warranty but not an implied warranty.
B)an implied warranty but not an express warranty.
C)an express warranty and an implied warranty.
D)no warranty.

Question 62

An action for breach of warranty accrues when

A)the seller or lessor tenders delivery of the goods.
B)the buyer or lessee is made aware of the breach.
C)the non-breaching party notifies the breaching party of the cause.
D)the action is commenced.

Question 63

Under the UCC, when express and implied warranties are consistent

A)the express warranty is presumably dominant.
B)the implied warranty displaces the express warranty.
C)they are construed as cumulative.
D)each warranty voids the other.

Question 64

The Magnuson-Moss Warranty Act requires that a seller who elects to give a full warranty for consumer goods must

A)discover the buyer's purpose for the purchase before closing the sale.
B)disclose certain information in "readily understandable language."
C)deal in goods only of the kind offered for sale.
D)determine that the products are fit for any foreseeable purpose.

Question 65

Lake Craft Inc. sells boats to consumers. To avoid liability for oral express warranties, each sales agreement should note that a boat is sold

A)as is.
B)in perfect condition.
C)subject to warranties included in the written contract only.
D)with no known defects.

Question 66

In many states, in a lemon-law dispute submitted for arbitration according to the program in a vehicle manufacturer's warranty, the decision of the arbitration panel is binding on

A)the manufacturer but not the purchaser.
B)the purchaser but not the manufacturer.
C)the manufacturer and the purchaser.
D)neither the manufacturer nor the purchaser.

Question 67

Brass Inc. sells seventy-six trombones to Community Band. To avoid liability for most implied warranties, Brass should state in writing that the trombones are sold

A)as is.
B)by a merchant.
C)in perfect condition.
D)with no known defects.

Question 68

3D Printers LLC includes with each sale of its product a technical manual that includes a general description and exact specifications. Specialty Metalwork buys a 3D product but soon realizes that it is not sufficient for Specialty's purpose. On the buyer's claim that the manual's statements are inconsistent, a court is most likely to hold that

A)the general description takes precedence.
B)the claim of inconsistency is irrelevant to a breach of warranty.
C)the exact specifications displace the general description.
D)each statement voids the other.

Question 69

A court is most likely to infer that both parties to a sale or lease of goods intended for a well-recognized trade custom to apply to their contract

A)despite evidence to the contrary.
B)when both parties had knowledge of the custom.
C)in the absence of negligence on the part of the seller or lessor.
D)if no implied warranty arises from the parties' course of dealing.

Question 70

Pipe Company includes in its contracts a provision that reads, in large red letters, "There are no warranties that extend beyond the description on the face hereof." This disclaimer negates

A)the implied warranty of fitness for a particular purpose.
B)the implied warranty of merchantability.
C)the implied warranty of title.
D)none of the choices.

Question 71

Langston steals from MindGames, Inc., ten game players, which Langston sells to Nu2U Games store. Unaware that the players are stolen, Nu2U reconditions them and sells them to Online Distributors, Inc. With the reconditioned drives, Nu2U gives Online Distributors a written statement that disclaims "any and all warranties." MindGames learns that Online Distributors has the players and demands their return. Online Distributors gives the equipment to MindGames and files a suit against Nu2U. Will Online Distributors succeed in its suit? Why or why not?

Question 72

Clark purchases a new car from Dicey's Deals. The retail installment contract states immediately above the buyer's signature in large, bold type: "There are no warranties that extend beyond the description on the face hereof" and "There are no express warranties that accompany this sale unless expressly written in this contract." Before purchasing the car, Clark specifically informed Dicey's salesperson that he wanted a car that could be driven in a dusty area without needing mechanical repairs. Dicey's salesperson said to Clark, "Nothing will go wrong with this car, but if it does, return it to us, and we will repair it without cost to you." Neither this statement nor any similar statement appears in the retail sales contract. Clark drives the car into a dust storm. The air filter gets plugged up, and the car engine overheats, causing motor damage. Dicey's refuses to repair the engine under any warranty. Clark claims that Dicey's is liable for breach of the implied warranty of fitness for a particular purpose, that the Magnuson-Moss Warranty Act prohibits disclaiming this implied warranty, and that the salesperson's express warranty has also been breached. What are the problems with Clark's claims?