Deck 21: Warranties and Product Liability

Question 1

In sales law,a warranty is an assurance by one party of the existence of a fact on which the other party can rely.

Answer 1

True

Question 2

A lien is an encumbrance on a property to satisfy or protect a claim for payment of a debt.

Answer 2

True

Question 3

A seller or lessor can disclaim all oral express warranties by including in the contract a written disclaimer. 

Answer 3

True

Question 4

Implied warranties can arise from a "usage of trade."​ 

Question 5

Puffery is an expert's opinion that creates an express warranty. 

Question 6

To specifically disclaim an implied warrant of fitness for a particular purpose,a seller or lessor must mention the word fitness. 

Question 7

A warranty against infringement is a promise by the seller that the product is free from any patent,trademark,or copyright claims of a third person. 

Question 8

To specifically disclaim an implied warrant of merchantability,a seller or lessor must mention the word merchantability. 

Question 9

Only a statement made after a contract is entered into can be an express warranty. 

Question 10

Warranties of title do not arise in most sales contracts. 

Question 11

Every sale or lease by a merchant who deals in goods of the kind sold or leased automatically gives rise to an implied warranty of merchantability. 

Question 12

A warranty of title cannot be disclaimed. 

Question 13

In most sales,sellers warrant that they have good and valid title to the goods sold. 

Question 14

Express warranties can be found in a seller's brochure. 

Question 15

Statements of fact made during the bargaining process are express warranties. 

Question 16

Statements of opinion and value usually create express warranties. 

Question 17

To be merchantable,goods must be at least average,fair,or medium-grade quality. 

Question 18

Promises of fact made during the bargaining process are express warranties. 

Question 19

If a warranty of infringement is breached and the buyer is sued by the claim holder,the buyer need not notify the seller of the lawsuit. 

Question 20

A product is unmerchantable if an accident could arise in connection with the goods. 

Question 21

Recovery in a product liability case may be limited when it can be shown that the plaintiff misused the product. 

Question 22

Assumption of risk can never be used as a defense in a product liability action. 

Question 23

Vehicle Wholesale Company and Walt's Retail Motors enter into a contract for a sale of used cars.Vehicle Wholesale assures Walt's that it has valid title to the vehicles.Under the UCC,warranties of title arise​ 

A) ​automatically in most sales contracts. 
B) only if the buyer asks for such a warranty.​ 
C) ​only if the seller expresses such a warranty. 
D) ​only in conjunction with lease contracts, not sales contracts.

Question 24

An action in strict product liability requires that a product be reasonably dangerous to a user or consumer. 

Question 25

An action in strict product liability requires that the product not be in a defective condition when the defendant sells it. 

Question 26

Global Talk Corporation sells phones and other mobile devices.Under most circumstances,Global Talk will be presumed to have warranted that its title to the goods is​ 

A) ​the same as each brand's name. 
B) ​none of the choices-a warranty of title is not presumed. 
C) ​good and valid. 
D) ​the best that money can buy.

Question 27

A product liability action based on negligence requires privity of contract between the injured plaintiff and the defendant-manufacturer. 

Question 28

Phoenix,a salesperson for Quality Fruit,Inc.,shows Robert,a buyer for Sweet Home Fruit Company,samples of peaches,stating that any shipment will match the samples.This statement is​ 

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

Question 29

A design defect is not the sort of product defect that will support the imposition of liability on a strict product liability basis. 

Question 30

No seller is required to give a written warranty for consumer goods sold. 

Question 31

Big Screen Video Corporation sells high-definition television sets.Under most circumstances,Big Screen Video will be presumed to have warranted that its title to the TVs is​ 

A) ​the same as each brand's name. 
B) ​none of the choices-a warranty of title is not presumed. 
C) ​good and valid. 
D) ​the best that money can buy.

Question 32

A full warranty requires free repair or replacement of any defective part. 

Question 33

A design defect is not the sort of product defect that will support the imposition of liability on a strict product liability basis. 

Question 34

The types of product defects that have traditionally been recognized in product liability law include manufacturing defects. 

Question 35

The law imposes strict liability as a matter of public policy based in part on the assumption that manufacturers can better bear the costs associated with injuries caused by their products. 

Question 36

In sales law,failing to examine the goods and refusing to examine the goods are considered the same thing. 

Question 37

Greg,a salesperson for Home Improvement Center,tells Irena,"This is the best floor sander I've ever seen." This statement is​ 

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

Question 38

When a user is injured as a result of a seller's misrepresentation,the basis of product liability may be the tort of fraud. 

Question 39

If the misuse of a product is reasonably foreseeable,the seller must take measures to guard against it. 

Question 40

To support the imposition of strict product liability,a product must be substantially changed from the time it is sold to the time an injury occurs. 

Question 41

Watercourse 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 42

Regal Autos,Inc.,sells cars to consumers.To avoid liability for oral ex-press warranties,each sales agreement should note that a car 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 43

Band Instruments,Inc.,sells seventy-six trombones to Community & School Band Source,Inc.To avoid liability for most implied warranties,Band Instruments 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 44

Dependable Appliances,Inc.,and Elaine enter into a contract for a sale of kitchen appliances.Dependable,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 quality that money can buy.

Question 45

Mountain Bikes,Inc.(MBI),and Nero enter into a contract for a sale of a mountain bike.MBI,a merchant who deals in goods of the kind sold,makes implied and express warranties in connection with the sale.The Magnuson-Moss Warranty Act attempts to prevent deception in warranties by​ 

A) ​displacing the UCC as the primary source of warranty rules. 
B) ​making warranties easier to understand. 
C) ​prohibiting disclaimers of warranties. 
D) ​requiring sellers to give written warranties for consumer goods.

Question 46

Chord Guitars Inc.sells guitars and other stringed instruments to consumers.A Chord salesperson says to a potential customer,"This Chord is the best guitar you'll find anywhere,even online." This statement is​ 

A) ​an implied warranty of fitness for a particular purpose. 
B) ​an implied warranty of merchantability. 
C) ​an express warranty. 
D) ​puffery.

Question 47

Street Bikes,Inc.,makes and sells a bicycle to Theo.Street Bikes fails to exercise "due care" to make the bicycle safe,however,and Theo is injured as a result.Street Bikes is most likely liable for​ 

A) ​assumption of risk. 
B) ​commonly known danger. 
C) ​negligence. 
D) ​product misuse.

Question 48

Sari buys a new sport utility vehicle (SUV)from Terrific Cars & Trucks,Inc.The most important factor in determining whether an ex-press warranty is created is whether​ 

A) ​Sari expresses to Terrific what she wants warranted. 
B) ​Sari's desire for the SUV becomes part of her motivation to deal. 
C) ​Terrific expresses to Sari what it expects of its customers. 
D) ​Terrific's promise becomes part of the basis of the bargain.

Question 49

Trucks & Trailers,Inc.(T&T),and United Delivery Service enter into a contract for a lease of trucks.T&T is a merchant who 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 50

Blanche,a salesperson for Custom Restaurant Equipment,Inc.,shows Dylan,a buyer for Eat n' Dine Company,display items in Custom's showroom,stating that any purchased equipment will match the display.This statement is​ 

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

Question 51

Regional Wood Products Company and Sylvia enter into a contract for a sale of lumber.Regional knows the purpose for which Sylvia will use the goods.Under the UCC,an implied warranty of fitness of a particular purpose arises​ 

A) ​if the buyer is relying on the seller to select suitable goods. 
B) if the buyer asks for it. 
C) ​if the seller is a merchant who deals in goods of the kind sold. 
D) ​in conjunction with lease contracts, not sales contracts.

Question 52

MotorCo Inc.makes and sells auto parts to retail repair services,vehicle sales outlets,and consumer parts stores.On one MotorCo box is a label that reads "Contains one gross (144)sparkplugs,assorted sizes." This statement is​ 

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

Question 53

Quade is an expert in twentieth-century art.Rachel visits Quade's gallery,seeking to buy artwork as an investment.Quade shows her a painting that in his opinion is by Picasso.Quade's statement is​ 

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

Question 54

Freddi buys bike shoes from Get n' Gear Store,telling the clerk that she wants the shoes to compete in High Pace Triathlon.The shoes break apart during the competition,causing Freddi to be injured in a fall.Get n' Gear most likely breached 

A) ​an express warranty. 
B) ​an implied warranty of fitness for a particular purpose. 
C) ​an implied warranty of merchantability. 
D) ​a warranty of title.

Question 55

Replay Sports Stores and SportsPower Products,Inc.,enter into a contract for a sale of trampolines.SportsPower Products is a merchant who deals in goods of the kind sold.Under the UCC,an implied warranty of merchantability arises​ 

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

Question 56

Pat's Pet Houses,Inc.sells shelters for animals under "limited" warranties.Under the Magnuson-Moss Warranty Act,this means that the warranties on the shelters from Pat's​ 

A) ​limit the buyers' recourse in some fashion. 
B) ​are only good for some buyers. 
C) ​cover only some of the shelters. 
D) ​are oral instead of written.

Question 57

Beginners Run Ski Shop sells a pair of skis to Crystal.When Crystal first uses the skis,they snap in two.The cause is something that Beginners Run did not know about and could not have discovered.Beginners Run breached​ 

A) ​the merchant's implied duty of inspection. 
B) ​the implied warranty of merchantability. 
C) ​no duty or warranty because Beginners Run knew nothing about the defect that made the goods unsafe. 
D) ​no duty or warranty because consumers should reasonably expect to occasionally find a product that does not work as warranted.

Question 58

Arnold buys a backhoe from Big Dig Equipment Inc.Arnold is unaware that Credit Collection Company holds a lien against the backhoe when he buys it.If Credit Collection repossesses the backhoe,Arnold can​ 

A) ​recover from Big Dig for breach of warranty. 
B) ​do nothing. 
C) ​file criminal charges against Big Dig and Credit Collection. 
D) ​recover damages from Credit Collection for breach of warranty.

Question 59

HandiTools,Inc.,sells power tools,power tool parts,and related supplies under "full" warranties.Under the Magnuson-Moss Warranty Act,this means that HandiTools must provide​ 

A) ​free repair or replacement of any defective part. 
B) ​a toll-free number for a  HandiTools-approved service company. 
C) ​a complete catalog of products and parts available for sale. 
D) ​repair or replacement of any defective part at a reduced charge.

Question 60

Kramer goes to Lawn & Garden to tune up his mower.Martin,the service technician,learns that Kramer's lawn is overgrown and rocky and advises the use of a certain type of oil,plug,filter,and blade.Later,while Kramer is mowing his lawn,the mower breaks down due to the use of the items recommended by Martin.Kramer may recover from Lawn & Garden for breach of​ 

A) ​an express warranty. 
B) ​an implied warranty of fitness for a particular purpose. 
C) ​an implied warranty of merchantability. 
D) ​a warranty of title.

Question 61

Safe-Rite Company makes electrical cords and other connectors for electronic devices.Tina files a product liability suit against Safe-Rite,alleging a warning defect.In deciding whether to hold Safe-Rite liable,the court may consider​ 

A) ​consumers' general lack of desire to read the product's warnings. 
B) ​the plaintiff's specific lack of desire to read the product warnings. 
C) ​the obvious risks of other products. 
D) ​the obvious risks of this product.

Question 62

Custom Ceramics Corporation makes ceramic products for commercial uses,including heat-resistant tiles for industrial ovens.When damage occurs in an oven at Duramold Plastics,Inc.,liability may be imposed on Custom Ceramics if the tiles sold to Duramold were​ 

A) ​in perfect condition at the time of their sale. 
B) ​damaged by their use. 
C) ​substantially changed after their sale. 
D) ​in a defective condition that was the proximate cause of the damage.

Question 63

In making and marketing tools and other do-it-yourself home maintenance products,Do-It-Rite Corporation,like other sellers,is required to take precautions against​ 

A) ​every conceivable misuse of a product. 
B) ​only foreseeable misuses of a product. 
C) ​no misuses of a product. 
D) ​only obvious misuses of a product.

Question 64

Bob is shopping in Carl's Hardware Store when a nail gun in use by Dan,one of Carl's employees,fires without warning and hits Bob in the leg.Carl checks the gun and discovers that it was assembled improperly.Bob files a suit against Eagle Tools,Inc.,the manufacturer of the gun,for product liability,on the ground of strict liability.What are the elements for an action based on strict liability? In whose favor is the court likely to rule and why?​

Question 65

To assemble and sell stoves and fireplaces,Hearth & Home,Inc.,buys igniters,tubing,and other parts from Inflame Stove & Fireplace Parts and installs them without changing them.If the parts are defective,strictly liable for any damage caused by the defects​ 

A) ​are neither Hearth & Home nor Inflame. 
B) ​are Hearth & Home and Inflame. 
C) ​is Inflame only. 
D) ​is Hearth & Home only.

Question 66

Sea & Sail Corporation makes boats and boating supplies.Theresa files a product liability suit against Sea & Sail,alleging a design defect.In deciding whether to hold the boat maker liable,the court may consider an available alternative design based on the design's​ 

A) ​popularity among industrial designers. 
B) ​attractiveness to consumers. 
C) ​aesthetics. 
D) ​effect on the product.

Question 67

SmartTalk,Inc.,makes and markets cell phones and related accessories.When problems develop with SmartTalk products or sales,the company may be liable in product liability for any of the following except​ 

A) ​a manufacturing defect. 
B) ​a design defect. 
C) ​an inadequate warning. 
D) ​an ineffective marketing plan.

Question 68

AgriGro,Inc.,sells hybrid seed to farms and other agricultural enterprises.Brandon buys and plants AgriGro seed on his Country Farm,but no crop grows because the seed is defective.Brandon sues AgriGro for product liability based on negligence.To win,Brandon must show that​ 

A) ​AgriGro sold the seed to Brandon. 
B) ​Brandon knew and appreciated the risk caused by the defect. 
C) ​Brandon suffered damage caused by the defect. 
D) ​the "defect" was a commonly known danger.

Question 69

Dark Roast Products,Inc.,makes espresso machines and sells one to the Eat at Joe's Café.Flo,the café's employee working at the coffee bar,is injured when the machine malfunctions.If the injury occurred as a result of a misrepresentation about the product,Dark Roast is most likely liable for​ 

A) ​a commonly known danger. 
B) ​fraud. 
C) ​privity. 
D) ​puffery.

Question 70

Wideload,Inc.,makes,sells,and leases trucks,trailers,and other moving and hauling equipment for consumer use.Verna files a product liability suit against Wideload,alleging a design defect.In deciding whether to hold the maker liable,the court may consider​ 

A) ​the assumptions of Wideload. 
B) ​the identity of Wideload's owner. 
C) ​the intentions of Wideload. 
D) ​the expectations of the ordinary consumer.

Question 71

Stella bought a cup of coffee at the Roasted Bean Drive-Thru.The coffee had been heated to 190 degrees and consequently had dissolved the inside of the cup.When Stella lifted the lid,the cup collapsed,spilling the contents on her lap.To recover for third-degree burns on her thighs,Stella filed a suit against the Roasted Bean.Can Stella recover for breach of warranty? Explain.

Question 72

The brakes on Dirk's Tour de Valle bicycle malfunction,but he continues to ride it because he likes the thrill of the unstoppable acceleration.One night,enjoying a fast downhill pace,he speeds through a stop sign and is struck by a truck.In Dirk's suit against Tour de Valle,the bike maker can raise the defense of​ 

A) ​commonly known dangers. 
B) ​assumption of risk. 
C) ​inadequate warning. 
D) ​product misuse.