Deck 22: Product Liability: Warranties and Strict Liability

Question 1

The warranty of merchantability is found in Section 402A of the Restatement of the Law of Torts.

Answer 1

False

Question 2

Jennifer purchased a used refrigerator from her next-door neighbor. When she took it home and plugged it in, the refrigerator burst into flames. The seller in this case is in breach of the implied warranty of merchantability.

Answer 2

False

Question 3

Ed buys a car from a friend "as is." The friend tells him, "In my opinion, this car is in excellent mechanical condition." The friend has made an express warranty.

Answer 3

False

Question 4

The Code does not label the warranty of title as an implied warranty, despite the fact that it arises out of the sale and not from the words or conduct of the parties.

Question 5

The Code requires that the affirmations, promises, or descriptions the seller makes be relied on by the buyer to be an express warranty.

Question 6

Jared drives his car knowing that the brakes are defective and has an accident in which the car is damaged and he is injured. He will likely be unable to recover from the manufacturer, because he voluntarily assumed the risk of the defective brakes.

Question 7

Comment (m) to Section 402A provides that the basis of strict liability rests solely in tort and, therefore, is not subject to contractual defenses.

Question 8

Section 402A of the Restatement applies only if the defective product is unreasonably dangerous.

Question 9

Under comparative negligence, the court apportions damages between parties in proportion to the degree of fault or negligence it finds against them.

Question 10

The Magnuson-Moss Warranty Act is administered by the Federal Trade Commission.

Question 11

Despite 402A's bar of contributory negligence in strict liability cases, some courts apply comparative negligence to strict liability cases.

Question 12

A salesperson at Lakeview Furniture showed Camila a cherry end table and she ordered one like it to be delivered to her home four weeks later. When the table arrived, it was not made of cherry wood, but of pine. If Camila fails to notify Lakeview of the breach within a reasonable time, she will be barred from any remedy against Lakeview.

Question 13

Oral warranties made before the execution of a written agreement containing an express disclaimer are subject to the parol evidence rule.

Question 14

The word "merchantability" must be mentioned in a disclaimer of an implied warranty of merchantability.

Question 15

Bradley buys a television set that turns out to be stolen. He can sue the seller for breach of warranty.

Question 16

Fitness for a particular purpose and merchantability are implied warranties that apply only to sales by commercial vendors.

Question 17

Contributory negligence is a defense to a warranty of merchantability cause of action.

Question 18

An express warranty requires that the warranty be expressed in words.

Question 19

Barry buys a car from a dealer, which is sold to him "as is" and "with all faults." The next day, the engine blows up. Barry can sue the dealer for breach of the implied warranty of fitness.

Question 20

Few obstacles to recovery in warranty cases present serious problems to plaintiffs in strict liability actions brought pursuant to Section 402A because this section was drafted largely to avoid such obstacles.

Question 21

An implied warranty is found in the language of a sales contract.

Question 22

Statutes of repose were enacted to give consumers more rights against large manufacturers.

Question 23

Section 402A provides that liability exists only if the product reaches "the user or consumer without substantial change in the condition in which it is sold."

Question 24

As of the writing of the textbook, the Restatement (Third) of Torts: Products Liability had replaced the Second Restatement in all but four of the states.

Question 25

The liability of manufacturers and sellers of goods for a defective product or for its failure to perform adequately may be based on one or more of the following: negligence, misrepresentation, violation of a statutory duty, warranty, and strict liability in tort.

Question 26

An express warranty may consist of a sample.

Question 27

An implied warranty exists by operation of law.

Question 28

The main provision of the Restatement (Third) of Torts, Section 2, recognizes three types of product defects: manufacturing defects, design defects, and failure to warn, but it imposes strict liability only for manufacturing defects.

Question 29

Implied warranties may be excluded by course of performance, course of dealing, or usage of trade.

Question 30

Under the CISG, if at the time of entering into the sales contract, the buyer knew or could not have been unaware of the lack of conformity, the seller is not liable for the warranty of particular purpose, ordinary purpose, or sale by sample or model.

Question 31

Under the CISG, the seller must deliver goods, unless otherwise agreed, that are fit for the purposes for which goods of the same description would ordinarily be used.

Question 32

Under Alternative A of the Code's horizontal privity provision, a corporation may bring a case against the manufacturer of a defective product for breach of the warranty of merchantability.

Question 33

With respect to horizontal privity, the strict liability in tort of manufacturers and other sellers extends to only buyers, users, and consumers, but not to injured bystanders.

Question 34

A warranty of title may be included only by specific language or by certain circumstances.

Question 35

If the seller of goods is an expert and gives an opinion with regard to the goods, the seller may be liable for breach of warranty.

Question 36

Horizontal privity pertains to remote sellers within the chain of distribution.

Question 37

Lucille bought a new lawn mower on sale at a local discount store. The mower did not come with an instruction book nor did it have warning labels placed near dangerous parts of the mower. If Lucille injures herself while using this mower, she can claim that she purchased a defective product.

Question 38

The use of a sample or model is another means of creating an implied warranty.

Question 39

Both design and manufacturing defects can subject a manufacturer or seller to product liability.

Question 40

Misuse or abuse of the product is a defense to an action brought under 402A of the Restatement (Second) of Torts.

Question 41

Which of the following is generally NOT a defense to a claim against a manufacturer under 402A?

A) Contributory negligence on the part of the plaintiff.
B) Express voluntary assumption of the risk.
C) Misuse or abuse of the product.
D) Subsequent alteration of the product by the plaintiff.

Question 42

An obligation of the merchant-seller that the goods are reasonably fit for general purposes for which they are manufactured and sold, and the goods are of fair average quality is known as:

A) a warranty of merchantability.
B) strict liability.
C) an express warranty.
D) a warranty of fitness for a particular purpose.

Question 43

Implied warranties under the Code:

A) depend on the type of contract or sale entered into.
B) are a result of specific language in the sales contract.
C) continue the common law rule of caveat emptor .
D) are intended to protect the seller rather than the buyer.

Question 44

Mark tells Leslie that his sweeper has a four-stage allergen filtration system because he was told that when he bought it. Leslie buys the sweeper from Mark, but it does not have the four-stage allergen filtration system. Is Mark liable for breach of warranty?

A) No, because he did not know his statement was false.
B) No, because he did not promise her that the sweeper would filter virtually all allergens because of the four stages.
C) Yes, because the statement was false.
D) Yes, because Mark was not acting in good faith.

Question 45

Karen decided to sell her stair step exerciser, because she wasn't using it as much as she thought she would. Her friend Lydia bought it from Karen for $100. The first day that Lydia used the exerciser, it fell apart, injuring Lydia's ankle. Lydia:

A) can sue Karen for breach of the warranty of merchantability, because the exerciser is not fit for the ordinary purpose intended.
B) cannot sue Karen for breach of the warranty of merchantability, because Karen did not expressly warrant the quality of the exerciser.
C) cannot sue Karen for the warranty of merchantability because this warranty was not implied in this situation.
D) cannot sue Karen, because they are not in privity of contract.

Question 46

An express warranty within the meaning of the Code is created by which of the following?

A) A sample.
B) A description.
C) A promise.
D) All of these.

Question 47

Eric bought a new snowmobile from the North Pole Manufacturing Company. After buying the machine, Eric then modified it in order to soup it up. In February, just after a snowfall, Eric was driving the snowmobile, when it tipped over, trapping him beneath it. His leg was severely burned. Eric now wants to sue North Pole for strict liability. Eric:

A) will likely win the suit, because of the faulty design of the snowmobile.
B) will likely lose the suit, because the machine has been altered since its manufacture.
C) has assumed the risk of using the snowmobile.
D) cannot sue the manufacturer, because horizontal privity is lacking.

Question 48

Leslie purchased 100 flower pots from a local merchant. Warranties which are not included in her sales contract, but exist by "operation of law," are the:

A) express warranties.
B) exclusive warranties.
C) quasi warranties.
D) implied warranties.

Question 49

Bob rented a lawn mower from Scott Rentals. The lawn mower wheel was loose when Bob picked up the mower. When he began to use it, the wheel fell off, causing the mower to tip over onto his foot. Under what theory can Bob hold Scott liable for his injuries?

A) Breach of warranty of merchantability.
B) Strict liability in tort for a defective condition.
C) Both of these are applicable.
D) Neither theory is applicable to leases.

Question 50

Which of the following would constitute a defect within the meaning of 402A of the Restatement?

A) A chair with legs designed to be attached with screws and glue but lacking the screws.
B) A small car designed to have the fuel tank next to the rear axle.
C) A flammable liquid bottled in a container without a warning label to warn users of the flammability.
D) All of these are defects within the meaning of 402A.

Question 51

The warranty of title for the sale of goods found in the Code:

A) may be excluded with the phrase "as is."
B) will vest title under Article 2A.
C) may not be excluded or modified by the seller.
D) will apply regardless of whether it is provided for in the contract unless the parties have specifically excluded it or certain circumstances exist.

Question 52

In the In Re L. B. Trucking, Inc. case:

A) warranty provisions of the UCC did not apply because the sale of goods was merely incidental to the service aspect of the contract.
B) Thomas's statements were found by the court to be mere puffing or sales talk.
C) Southern States was found to have breached both express and implied warranties.
D) Durham did not rely on Thomas's statements, so they could not be considered warranties.

Question 53

Whether an implied warranty arises out of the circumstances under which the parties enter into a contract may depend on:

A) the type of contract entered into.
B) the seller's merchant or non-merchant status.
C) applicability of other statutes.
D) All of these.
E) None of these.

Question 54

Which of the following would most likely be a defect under 402A of the Restatement of Torts?

A) A chair produced without inserting the appropriate screws.
B) A product with a defective design that is nevertheless the "state of the art."
C) Vodka that is 100 proof and makes people drunk and causes liver damage after years of heavy use.
D) All of these are defects under 402A.

Question 55

Which of the following products would impose strict liability in tort according to Section 402A?

A) Popcorn containing large amounts of genuine butter.
B) 150-proof Virgin Island rum.
C) A chainsaw sold with the safety shielding removed.
D) A Ferrari capable of speeds in excess of 150 mph.

Question 56

Terrell asks a salesperson what size of water heater he should buy for a twenty-unit motel. If Terrell purchases a tank based on the salesperson's suggestion, the salesperson's recommendation is:

A) an express warranty of merchantability regarding the water heater.
B) an implied warranty of merchantability regarding the water heater.
C) an implied warranty of fitness for a particular purpose.
D) no warranty, but only a statement of opinion.

Question 57

Which of the following is not an express warranty?

A) Restating facts or market figures about a product.
B) The opinion of an expert in a certain field regarding a product in that field.
C) A statement of the product specifications.
D) The seller's opinion of the value of goods.

Question 58

Strict product liability exists if:

A) the consumer misuses the product.
B) the consumer alters the product before he or she uses it.
C) a defective, unreasonably dangerous product reaches the consumer or user without substantial change in the condition in which it is sold.
D) the consumer gives the manufacturer or seller notice of the defect.

Question 59

Matt tells Ron that the snow boots he is selling are capable of protection at temperatures of 20° below zero. Ron orders a pair for his trip to Greenland. Upon delivery the box states "will protect your feet in temperatures down to 30° below zero." The first night's temperature goes down to 27 below. Ron suffers frostbite on all of his toes. Ron then sues for breach of warranty. What is the result?

A) Breach, because the latter express warranty is valid.
B) No breach because Matt's statement was merely opinion.
C) No breach because Matt said 20° below zero.
D) No breach because Matt is allowed to be wrong.

Question 60

Which of the following is NOT included within the Code definition of merchantability?

A) Reasonably fit for the ordinary purposes for which the goods are used.
B) Pass without objection in the trade under the contract description.
C) In the case of fungible goods that they be of a quality that exceeds the description and be above average.
D) Be of fair, average quality.

Question 61

Geoff's fiancée, Susan, comes to meet his parents for the weekend. On Saturday morning, while using Geoff's mother's hair dryer, the blower short-circuits sending sparks across the guest room. Susan's angora sweater and her hands are covered with tiny burns. Susan's mother is a lawyer and wants her to sue the seller of the dryer for breach of warranty. Can she?

A) No, because horizontal privity would extend only to members of the family.
B) No, because privity would require that Geoff's mother sue.
C) Yes, since she is a guest in the home of the buyer, the warranties would extend to her in most states.
D) Yes, since under the Code all reasonable users are protected from injury.

Question 62

Greg has been in the business of selling collectible figurines for twenty years. Margaret agreed to buy a set if Greg would also bring her a display case for them. Greg bought one and sold it to Margaret along with the figurines. While placing the figurines in the display case, she ran her hand over the back edge of one of its shelves and cut herself severely. The wood was not finished on that side and nails were protruding through the shelf. Can Margaret sue Greg under strict liability?

A) Yes, because the display case was in an unreasonably dangerous condition.
B) Yes, because the display case was defective.
C) No, because she was not a true consumer under Sec. 402A.
D) No, because Greg is not a seller under Sec. 402A.

Question 63

If the buyer inspects the goods before entering into the contract, then implied warranties:

A) still apply to any defects.
B) will in no circumstances be applicable.
C) do not apply to defects that are apparent upon reasonable inspection.
D) None of these.

Question 64

Define and discuss horizontal and vertical privity. Explain the effect of the Code and the courts on the concept of privity of contract.

Question 65

In the Womco, Inc. v. Navistar International Corporation case, the court stated the disclaimer of the warranty of:

A) merchantability must be written and mention the word "merchantability."
B) merchantability may be oral.
C) fitness for a particular purpose may be oral or written.
D) merchantability or fitness for a particular purpose must be conspicuous, which requires that the disclaimer be in a larger type and a different color.

Question 66

The UCC permits a seller to limit or modify the buyer's remedies for breach of warranty:

A) in all cases.
B) except for unconscionable limitations or exclusions of consequential damages.
C) in no cases, as this would be contrary to public policy.
D) except when the seller seeks to limit the time within which the warranty is effective.

Question 67

Identify at least four means states have used to limit the punitive damages a plaintiff can collect in a product liability lawsuit.

Question 68

Article 2A carries over the warranty provisions of Article 2 with relatively minor revisions that reflect differences in:

A) style.
B) leasing terminology.
C) leasing practices.
D) All of these.
E) leasing terminology but not leasing practices

Question 69

Alice is browsing in a commercial art gallery when she sees a painting that she likes. Arthur, who is the manager of the gallery, tells her that in his opinion the painting is a genuine Leroy Neiman work. Based upon that representation, Alice buys the work for $5,000. She later discovers that the painting is only a cheap copy of the original that is worth no more than $50. Arthur has:

A) breached an express warranty to Alice that the painting is a Neiman work.
B) breached the warranty of merchantability.
C) not breached a warranty because he was merely expressing his opinion.
D) breached an express warranty, the warranty of merchantability, and the warranty of fitness for a particular purpose.

Question 70

a. What is the Magnuson-Moss Warranty Act? What is its purpose?
b. What is a statute of repose? Why have some states adopted such statutes?

Question 71

Hubert bought heavy-duty, sharp hedge clippers to trim the hedges in his yard. In the process of using the clippers, he severely cut his hand. He is now suing the manufacturer because the clippers are unreasonably dangerous. Can he recover? Explain.

Question 72

In bringing a warranty action, the buyer must prove that:

A) a warranty existed.
B) the warranty has been breached.
C) the breach of the warranty proximately caused the loss suffered.
D) All of these.
E) None of these.

Question 73

a. Under the Code, what constitutes an "express" warranty? How does an express warranty arise?
b. Which of the following would be an express warranty? Explain.
(1)
"This is the best computer available in town."
(2)
"This car has new brakes."
(3)
"This sample is just like the one in the box."
(4)
"In my opinion, this is a better video recorder than the one made by RCA."
(5)
"As a mechanic, I think this car is in good running order and should give you no problems for at least three months."