Deck 20: Warranties and Product Liability

Question 1

The implied warranty of merchantability applies only to nonmerchants, while the implied warranty of fitness for a particular purpose applies only to merchants.

Answer 1

False

Question 2

The Magnuson-Moss Warranty Act applies to all sellers of a consumer product that costs more than $5 who give the consumer a written warranty.

Answer 2

True

Question 3

According to the Uniform Commercial Code (UCC), goods that fail to function properly or that have harmful side effects are nevertheless merchantable.

Answer 3

False

Question 4

In order to exclude the implied warranty of merchantability, the seller must put the exclusion in writing.

Question 5

The implied warranty of merchantability is also known as the implied warranty of fitness for a particular purpose.

Question 6

At times, the seller may know the particular purpose for which the buyer needs the goods and know that the buyer is relying on the seller to select goods suitable for that purpose. If these two conditions are met, then the seller makes a(n) _____ warranty that the goods will be fit for that particular purpose.

A) express
B) implied
C) constructive
D) symbolic

Question 7

If the seller, through words or behavior, makes promises about the goods, he has created an express warranty.

Question 8

The seller may not include a clause in the contract that excludes implied warranties.

Question 9

If a consumer brings suit against the manufacturer, the retailer is relieved of its responsibility for the fitness and merchantability of the goods.

Question 10

Goods sold "with all faults" are sold without the implied warranties of merchantability and fitness for a particular purpose.

Question 11

Given the various breach of warranty remedies available to buyers under the Uniform Commercial Code (UCC), courts no longer recognize negligence theory to impose liability on the manufacturer or seller of goods for personal injury or property damage that results from the use of the goods.

Question 12

In order to create an express warranty, it does not matter whether the seller uses the words warranty or guarantee or whether the seller intends to make a warranty.

Question 13

In order to recover on a strict liability theory, the plaintiff need not prove that the product is defective.

Question 14

The creation of an express warranty depends on the:

A) seller's intent.
B) seller's statement becoming part of the bargain.
C) mere recommendation of the goods by the seller.
D) seller's confining their statements to "sales talk."

Question 15

If a seller wishes to be relieved of the responsibility for implied warranties, the sales contract must clearly provide that the parties did not intend the implied warranties to become part of the contract.

Question 16

Under the Uniform Commercial Code, some of the benefits of warranties extend to persons who did not themselves purchase the particular defective goods.

Question 17

Which of the following is a correct statement regarding implied warranties?

A) Implied warranties are absolute.
B) The seller cannot include a clause in the sales contract that excludes implied warranties.
C) The courts do not favor implied warranties.
D) One of the implied warranties of quality imposed under the Uniform Commercial Code is the implied warranty of merchantability.

Question 18

Which of the following is a test of merchantability for all sales contracts?

A) The goods conform to any promises or statements of fact made on the container or label.
B) The goods are of different kind, quality, and quantity within each unit.
C) The goods need not necessarily be packaged or labeled adequately.
D) The goods conform to the general description of the goods available in the market.

Question 19

Under the warranty of title, the seller warrants that the goods are free of any liens or claims of other parties unless the buyer was given notice of the liens or claims at the time the contract was made.

Question 20

If a seller says "These goods are first class," this is an example of:

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

Question 21

If a 350-pound man tells a sales clerk he needs a chair that will not collapse under his weight and is sold one that will support a person of only average weight:

A) the warranty of fitness for a particular purpose is breached but not the warranty of merchantability.
B) the warranty of merchantability is breached but not the warranty of fitness for a particular purpose.
C) both the warranty of fitness for a particular purpose and the warranty of marketability are breached.
D) both the warranty of fitness for a particular purpose and the warranty of merchantability are breached.

Question 22

In determining whether a product is inherently dangerous or has been defectively designed, courts look at:

A) whether anything else could have been done to make the product safer, given the practical and technological limitations of the time.
B) what other companies in the industry are doing.
C) whether the product was grossly overpriced.
D) whether the seller can pass on the costs of injuries as higher prices in the market or if they should be borne by the injured person.

Question 23

Which of the following is true of strict liability?

A) Courts never hold the retailer liable if the manufacturer is available for suit.
B) The application of strict liability varies among states.
C) Most states hold that plaintiffs can recover for purely economic losses under strict liability.
D) The essential element for strict product liability is that the product is not defective.

Question 24

Which of the following is an outgrowth of strict product liability?

A) Industrywide liability
B) Vicarious liability
C) Negligence
D) Product misuse

Question 25

According to the Magnuson-Moss Warranty Act, which of the following must the seller disclose if the seller gives a written warranty to consumers?

A) The time the warranty begins (if it begins on a date other than the purchase date) and its duration
B) How the seller's express warranty compares to the implied warranty of merchantability
C) How the seller's express warranty compares to warranties offered by competing sellers
D) A statement that the consumer has certain equitable remedies under the warranty as well as other rights that do not vary from state to state

Question 26

It does not matter whether or not the buyer dealt directly with the manufacturer because:

A) the obvious danger rule is not used anymore as defense.
B) liability based on negligence does not involve a contractual relationship.
C) the manufacturer's duty of care does not extend to all persons who might foreseeably be injured.
D) obviousness of the danger is not a factor that is considered in determining liability.

Question 27

The Magnuson-Moss Warranty Act is intended to:

A) provide maximum warranty protection for consumers.
B) increase consumer understanding of warranties.
C) protect all sellers of a "consumer product" that costs less than $5.
D) assert on the importance of giving a written warranty to consumers.

Question 28

If a product is inherently dangerous so that no amount of due care could make it safe, _____.

A) the manufacturer is required to give the consumer notice of the unreasonable danger
B) privity does not bar recovery
C) contributory negligence prevents recovery
D) the manufacturer is required to provide the consumer a disclaimer at the time of sale

Question 29

Which of the following statements is true of the obvious danger rule in the context of product liability?

A) Traditionally, middlemen had a duty to warn customers of obvious dangers.
B) It has to be implemented more frequently in order to be effective.
C) A manufacturer need not issue a warning even after learning that the product is dangerous.
D) It holds that the unmistakable presence of danger is a factor in determining liability.

Question 30

Which of the following statements is true of privity of contract?

A) In the past, a person was not required to be in privity of contract to enforce the contract.
B) In the past, courts allowed an injured purchaser to recover directly from the manufacturer of the goods.
C) In most cases, the manufacturer does not have control over the condition of the product when it reaches the buyer's hands and should not be held liable for any defects in it.
D) In most states, the buyer is permitted to sue both the retailer and the manufacturer in the same suit.

Question 31

In liability based on negligence, _____.

A) a contractual relationship is involved and it does matter whether or not the buyer dealt directly with the manufacturer
B) the manufacturer's duty of care extends to all persons who might foreseeably be injured if the manufacturer does not exercise its duty of care
C) disclaimers in contracts are usually effective to shield a manufacturer or seller against liability for negligence to consumers
D) the obvious danger rule can be used for complete defense

Question 32

According to the Magnuson-Moss Warranty Act and the Federal Trade Commission (FTC) guidelines, which of the following requirements must be satisfied by sellers when they give a written warranty?

A) The warranty must be included in more than one document.
B) The warranty must include a clear description of what is covered, but never include what is excluded from the warranty.
C) The warranty must include a step-by-step explanation of how to obtain warranty service.
D) The warranty must allow the seller to choose between a refund and a replacement after the product has been repaired a number of times.

Question 33

The basic rule of _____ is that a person owes a duty of care to avoid foreseeable injury to others.

A) negligence
B) Magnuson-Moss Act
C) breach of warranty
D) strict liability

Question 34

Natalie injured herself while trimming the sides of her hedge with her electric lawn mower. In this case, Natalie:

A) cannot recover under strict liability because she misused the electric lawn mower.
B) can recover under strict liability even though her use of the lawn mower to trim the sides of her hedge was not foreseeable by the manufacturers.
C) can recover under strict liability because the lawn mower was by itself dangerous.
D) can sue all market manufacturers of electric lawn mowers for dangerous product designs.

Question 35

Which of the following statements is true of the Federal Trade Commission (FTC)?

A) It applies to all sellers of a "consumer product" that costs less than $5.
B) It requires a seller of consumer goods to give a written warranty, either full or limited.
C) It enforces the disclosure provisions of the warranty act and regulations.
D) It does not permit consumers to sue the maker for failure to fulfill the terms of the warranty.

Question 36

A court is most likely to find a disclaimer of warranty unconscionable:

A) if the goods sold "as is" or "with all faults" are sold without any warranties.
B) if the plaintiff is a merchant trying to recover for property damage or economic loss.
C) in the case of a conspicuous disclaimer.
D) in the case of a personally injured consumer.

Question 37

Priety, a manufacturer of chairs, sold 150 chairs to Shilpa, the owner of a furniture shop. This sale was made after both the parties entered into a contract. The term of the contract read, "Seller hereby disclaims all implied warranties." Unlike the rest of the contract, this term was written in all capital letters and placed prominently in the document. In this scenario, Priety has effectively made a disclaimer of:

A) the implied warranty of merchantability, but not the implied warranty of fitness for a particular purpose.
B) neither the implied warranty of merchantability nor the implied warranty of fitness for a particular purpose.
C) the implied warranty of merchantability and the implied warranty of fitness for a particular purpose.
D) the implied warranty of fitness for a particular purpose, but not the implied warranty of merchantability.

Question 38

Which of the following statements is true of the Magnuson-Moss Warranty Act?

A) It requires the seller to make the written warranty terms available to the prospective buyer before the sale.
B) It does not allow consumers to sue the maker of the warranty for failure to fulfill its terms.
C) It enforces the seller's obligation to make the terms available only after the sale.
D) It permits consumers to sue the manufacturer if the manufacturer offers the warranty, but not the retailer even if the retailer grants the warranty.

Question 39

A full warranty means:

A) it excludes and limits payments for consequential damages.
B) the warrantor will fix or replace any defective product free of charge.
C) it has to cover the whole product and not cover only part of the product.
D) the warrantor is required to fulfill the warranty terms if the problem was caused by damage to the product through unreasonable use.

Question 40

Who among the following are held liable for negligence for failing to inspect and for misrepresenting the character of goods or their fitness for a particular purpose?

A) Retailers
B) Manufacturers
C) Distributors
D) Wholesalers

Question 41

A consumer who misuses a product:

A) can hold the manufacturer liable even if the manufacturer uses a defense of strict product liability by knowingly assuming an obvious risk of injury by the consumer.
B) typically may not recover under the theory of strict liability.
C) will recover under the theory of strict liability if the misuse was not foreseeable.
D) cannot hold the manufacturer liable for not designing the product so that it could not be altered even if the danger it created was foreseeable.

Question 42

Explain the difference between the implied warranty of merchantability and the warranty of fitness for a particular purpose.

Question 43

Salman, a high-school senior, bit into a chicken bone in a chicken burger in his high-school cafeteria. He had difficulty in breathing, and with some effort, expelled a small bone from his throat. He hurt his esophagus and had to be hospitalized for a few days. Salman brought suit against the school, claiming breach of warranty of merchantability in the food served to him in the cafeteria. What test should be applied to determine whether there was a breach of warranty of merchantability because of the presence of a bone in the meal served to Salman?

Question 44

A few state courts have declared their state's statute of repose unconstitutional because it:

A) gives people time from the date they discover their injury in which to bring their suit.
B) refrains people to bring a suit who are injured by products such as asbestos or DES that cause injury immediately.
C) denies people the right to seek redress for their injuries when they had no chance to discover their injuries within the statutory period.
D) does not bar the bringing of a tort-based product liability suit after a certain number of years from the date the product is first sold to a user.

Question 45

Define the different situations in which courts can hold manufacturers liable for negligence.

Question 46

Syeda bought a thermos bottle from Pentagon Corp. When using it for the first time, she poured coffee into it and was adding some warm milk when it exploded, sending shards of glass into her face and injuring her right eye. Syeda testified that she had not dropped the thermos and had not abused it. She sued Pentagon, claiming, among other things, breach of warranty of merchantability. Under the Uniform Commercial Code, was the warranty of merchantability breached?

Question 47

Wilma locked herself in the trunk of a 1973 sedan in an attempt to learn a magic trick. After some time, she decided to get out of the trunk, but was unable to do so. She was released nine days later. She subsequently sued the manufacturer of the sedan for the psychological and physical injuries she sustained because the trunk did not have an internal release or opening mechanism that would have allowed her to escape. She alleged that the manufacturer was negligent in its design of the car because it lacked such a mechanism, and negligent because it failed to warn users that the trunk did not have such a mechanism. In this scenario, was the manufacturer of the sedan negligent for failing to warn, or failing to include a release mechanism in its design of the car?

Question 48

Which of the following is true of a statute of repose?

A) It is a significant change in the law for people who are injured by products that cause immediate injury.
B) It bars the bringing of a tort-based product liability suit usually after five years from the date the product is first sold to a user.
C) The people covered by statutes of repose now can bring suit even if their injury is not discovered within the statutory period.
D) The people covered by statutes of repose cannot bring suit if their injury is not discovered within the statutory period.

Question 49

A manufacturer who is sued on the basis of industry wide liability may try to defend on the grounds that:

A) it manufactured the product that caused the injury to the plaintiff.
B) it manufactured the product with a disclaimer.
C) the risks from its product were lower than those from other manufacturers.
D) the market share of its product was more than alleged by the plaintiff.

Question 50

Under the theory of industry wide liability, when it is impossible to successfully identify the particular manufacturer that caused the harm, courts will:

A) apportion liability among manufacturers based on market share.
B) make the plaintiff identify a likely manufacturer.
C) withhold liability among the firms in that industry that could have produced the product.
D) prohibit further manufacturing of the product.