Deck 21: Warranties and Product Liability

Question 1

The course of performance is the practice or method of dealing so regularly observed as to justify an expectation that it will be observed in a particular transaction.

Answer 1

False

Question 2

An expression of opinion will usually create a warranty.

Answer 2

False

Question 3

An implied warranty of merchantability does not necessarily arise in every lease by a merchant who deals in goods of the kind leased.

Answer 3

True

Question 4

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

Question 5

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

Question 6

Warranties of title do not arise in most sales contracts.

Question 7

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

Question 8

Goods must be of the highest quality possible to be merchantable.

Question 9

In sales law,there is only one type of warranty of title.

Question 10

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 11

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

Question 12

Merchants are not required to warrant that the goods they sell are fit for their ordinary purpose.

Question 13

If a seller is an expert and gives an opinion as an expert,then he or she usually creates an express warranty.

Question 14

Only a statement made in writing can be an express warranty.

Question 15

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

Question 16

A warranty of good title means that a seller warrants that they have valid title to the goods and that the transfer of the title is rightful.

Question 17

Implied warranties can arise from a "course of dealing."

Question 18

A seller need not use words such as "warrant" to make an express warranty.

Question 19

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

Question 20

Express warranties can be limited in contracts.

Question 21

Jean buys a bike from Mike's Bike Shop.She wants to make sure that there is a warranty of title.Jean

A)does not need to do anything because warranties of title arise automatically in most sales contracts.
B)must request a written warranty of title.
C)must request an oral warranty of title.
D)must request both a written and an oral warranty of title.

Question 22

William steals a valuable collection of baseball cards from Phillip.William then sells the cards to Darrel,who does not know that the cards are stolen.Phillip discovers that Darrel has the cards.Which of the following best describes the rights and liabilities of the parties involved?

A)Darrel has the right to keep the cards if he compensates Phillip monetarily.
B)Phillip has the right to reclaim the cards from Darrel,but is liable to Darrel for damages.
C)Phillip has the right to reclaim the cards from Darrel and William is liable to Darrel for damages.
D)Darrel has the right to keep the cards without compensating William.

Question 23

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

Question 24

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

Question 25

For consumer goods costing more than $25,a written warranty must be labeled "full" or "limited."

Question 26

A manufacturer's duty of care does extend to the inspection and test?ing of products bought to incorporate in the final product.

Question 27

Merchant Supply Company and National Discount Stores enter into a contract for a lease of cash registers.Merchant assures National that it has valid title to the goods.Under the UCC,a warranty of title arises

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

Question 28

Strict liability depends on privity of contract between an injured party and a seller.

Question 29

A seller does not have to provide a written warranty for consumer goods.

Question 30

Big Screen Video Corporation sells high-definition television sets.Under most cir?cum?stances,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 31

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

Question 32

A manufacturer's liability to an injured party on a strict product liability theory is limited to a refund or a replacement of the defective product.

Question 33

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

Question 34

A failure to exercise reasonable care is negligence.

Question 35

To succeed in a strict product liability suit,an injured plaintiff must show that a product's defect was the proximate cause of the injury.

Question 36

Under the doctrine of strict liability,people are liable for the results of their acts only if their intentions are malicious.

Question 37

The dangers associated with using sharp knives are so commonly known that manufacturers need not warn users of those dangers

Question 38

Sarah buys a computer game developed by Al's Gaming Company.One month later,Sarah and several other customers of Al's Gaming Company are sued by George's Fun Games,Inc.because the game from Al's is a direct copy of a copyrighted game sold by George's.Sarah

A)must notify a court that deals with copyright issues.
B)must notify Al's Gaming Company of the lawsuit in a reasonable time.
C)should ignore the lawsuit.
D)must return the game to Al's Gaming Company.

Question 39

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 40

Suppliers are generally required to expect reasonably foreseeable misuses of their products.

Question 41

Good Tire Company and Hiway Auto Service enter into a contract for a sale of tires.Good Tire is a merchant who deals in goods of the kind sold.Under the UCC,an implied warranty of merchantability arises

A)automatically in sales contracts.
B)only if the buyer asks for it.
C)only if the seller does not expressly disclaim it.
D)only in conjunction with lease contracts,not sales contracts.

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

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 44

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 45

Olga,a salesperson for Pre-owned Cars & Trucks,Inc.,tells Quincy,"This is the best car I've ever seen." This statement is

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

Question 46

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 47

Fred goes to Carla,a knowledgeable dog breeder,and tells her that he wants to get a dog that will be good with small children.Carla sells Fred a dog.When Fred takes the dog home,it bites both his small children and causes them serious injuries.Fred can sue Carla 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 48

GR8 Skates Company makes and sells a pair of skates to Hugh.GR8 fails to exercise "due care" to make the skates safe,and Hugh is injured as a result.GR8 is most likely liable for

A)assumption of risk.
B)knowledgeable use.
C)negligence.
D)product misuse.

Question 49

Sweet Candy,Inc.,and Tasty Treats stores enter into a contract for a sale of confections.Sweet,a merchant who deals in goods of the kind sold,makes express warranties in connection with the sale.Under the UCC,at the time a contract is formed,an express warranty can be disclaimed or modified

A)by clear,conspicuous language called to the buyer's attention.
B)by implied affirmations of fact relating to the goods.
C)in any way that the seller sees fit for the ordinary purpose.
D)in no way.

Question 50

Krissa,a horse breeder,shows Maggie,a customer looking for a new stallion for her breeding program,a stallion and tells her that the stallion is very fertile and can easily breed twenty mares per year.Krissa's statement is

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

Question 51

Sigrud buys spiked mountain-climbing shoes from Rockridge Gear store. The spikes come out of the shoes when Sigrud is on the side of a mountain,caus?ing her to be injured in a fall.Rockridge 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 52

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

A)a choice between a refund or replacement if a product cannot be fixed and repair or replacement of defective parts.
B)neither a choice of a refund or replacement,or repair of defective parts.
C)only a choice of a refund or replacement if a product cannot be fixed.
D)only repair or replacement of defective parts.

Question 53

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 in lease contracts.
B)only if the lessee asks for it.
C)only if the lessor does not expressly disclaim it.
D)only in conjunction with sales contracts,not lease contracts.

Question 54

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

A)do not meet one of the requirements of a full warranty.
B)are only good for one year.
C)are illegal.
D)are oral.

Question 55

Sari buys a new sport utility vehicle (SUV) from Terrific Cars & Trucks,Inc.The most important factor in determining whether an ex?press war?ranty 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 56

Ocean Vessels,Inc.,and Pacific Harbor Company enter into a contract for a sale of a boat.Ocean is a merchant who deals in goods of the kind sold.The goods are defective.Under the UCC,the implied warranty of merchantability is breached

A)only if Ocean did not know about and could not have discovered the defect.
B)only if Ocean did not know about the defect.
C)only if Ocean knew about or could have discovered the defect.
D)regardless of what Ocean knew or could have discovered.

Question 57

John is an art dealer with special expertise in modern art.Rachel comes to John's gallery to purchase a modern art painting as an investment.John shows her several paintings that he says are high quality and will increase in value in the next ten years.John's statement is

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

Question 58

Robert is selling his used lawnmower.He wants to disclaim any implied warranties.Robert

A)cannot disclaim implied warranties.
B)should include a written disclaimer that the lawnmower is being sold as is.
C)should orally disclose all known faults of the lawnmower.
D)should include a written warranty of title.

Question 59

Barry buys a bulldozer from Big Sandbox Equipment Company.Barry is unaware that there is a lien against the bulldozer when he buys it.Under the UCC,if the creditor reposes the bulldozer,Barry

A)can recover from Big Sandbox Equipment for breach of warranty.
B)can do nothing.
C)can file criminal charges against Big Sandbox Equipment.
D)can recover damages from the creditor.

Question 60

Fancy's Feedlot orders one hundred sacks of cattle feed from Bovine Feeders,Inc.Each bag has the words "Twenty percent protein" printed on the front.This is

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

Question 61

Cutter Company makes and sells table saws,which are designed to be safe if used properly.Erin buys a Cutter saw and lends it to her neighbor Frank.To reach a toolbox on a high shelf in his garage,Frank props the saw at an angle against a cabinet and climbs onto the saw.Frank loses his footing,slips off the saw,falls on the blade,and is injured.He files a product liability suit against Cutter,on the ground of negligence.On what basis could the maker prevail?

Question 62

Forest & Field Company makes and leases a backhoe to Zac.Due to a defect attributable to Forest & Field's negligence,Zac is injured in an accident in which his neighbor Aaron is also hurt.In a product liability suit based on negligence,Forest & Field may be liable to

A)Aaron only.
B)no one.
C)Zac and Aaron.
D)Zac only.

Question 63

Garden Tool Company makes hedge trimmers.Troy is injured while using a Garden Tool trimmer and sues the company for product liability based on neg?ligence.To win,Troy must show that

A)Garden Tool did not use due care with respect to the trimmer.
B)Garden Tool misrepresented a material fact regarding the trimmer.
C)Troy was experienced in the use of trimmers.
D)Troy was in privity of contract with Garden Tool.

Question 64

Fun Toyz Corporation makes skateboards,which it sells to con?sumers,including Holly and Ira.Due to a defect,Holly is injured while using her new board.Ira's board has the same defect,but he is not injured.In a product liability suit based on strict product liabil?ity,Fun Toyz may be liable to

A)Holly and Ira.
B)Holly only.
C)Ira only.
D)no one.

Question 65

Paltry Assembly Company makes espresso machines and sells one to Vim through a misrepresentation on the label on which Vim relies and that results in an injury to Vim.Paltry is most likely liable for

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

Question 66

The brakes on a River Valley Railroad train malfunction and it rolls towards main?te?nance workers on the tracks.Everyone gets out of the way except Dick,who wants to show off.The train hits Dick,who sues Stops-it,Inc.,the brakes' manufacturer.Stops-it can raise the defense of

A)a component-part manufacturer.
B)assumption of risk.
C)consumer participation.
D)product misuse.

Question 67

Ceramic Tile Company designs and makes floor tiles.In a product liability suit based on negligence,Ceramic could be liable for vio?lating its duty of care with respect to

A)neither the design nor the making of the tiles.
B)the design and the making of the tiles.
C)the design of the tiles only.
D)the making of the tiles only.

Question 68

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 69

Cold Stuf,Inc.,makes snowboards,which it sells to Deep Freeze Sports Store (DFS).DFS sells Cold Stuf boards to consumers,in?cluding Ed.Ed is in?jured while using the board.In a product liabil?ity suit based on strict li?ability,Ed may recover from

A)Cold Stuf only.
B)Cold Stuf or DFS.
C)DFS only.
D)no one.

Question 70

Toyoda Company buys gas pedals and other parts from subcontractors and puts them in its vehicles without changing their composition.If the pedals or other parts are defective,strictly liable for any damage caused by the defects are

A)neither Toyoda nor the subcontractors.
B)Toyoda and the subcontractors.
C)the subcontractors only.
D)Toyoda only.

Question 71

Safe-Rite Company makes electrical cords and other connectors for elec?tronic devices.Tina files a product liability suit against Safe-Rite,alleg?ing 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 72

Horizon Corporation makes cell phones.Inez files a product liabil?ity suit against Horizon,alleging a design defect.In deciding whether to hold Horizon liable,the court may consider an alternative design's

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