Deck 24: Product Liability: Warranties and Torts

Question 1

A seller cannot be held liable for the breach of an express warranty if the seller honestly believed that the warranted statement was true.​

Answer 1

False

Question 2

A defective product can injure intangible economic interests.​

Answer 2

True

Question 3

Plaintiffs suing for damages caused by a defective product are limited to claims against the manufacturer(s) of such goods.​

Answer 3

False

Question 4

Negligence and fraud are easy to prove in a mass production world.​

Question 5

A merchant has greater potential warranty liability than does a casual seller.​

Question 6

Federal law requires every product sold to have an express warranty.​

Question 7

Any warranty that does not provide the complete protection of a full warranty is called a warranty in breach.​

Question 8

A seller who makes a written express warranty for consumer goods costing more than $50 must conform to FTC regulations.​

Question 9

Product liability based on privity of contract is accepted by the Uniform Commercial Code.​

Question 10

The right to sue for damages sustained from a defective product is reserved exclusively to the original purchaser of the product.​

Question 11

Whenever a sale of goods is made, certain warranties are implied unless they are expressly excluded.​

Question 12

A full warranty requires the purchaser to pay for the shipping cost of returning the product for repair.​

Question 13

An express warranty can be disclaimed, even if it was a critical part of the bargain to the buyer.​

Question 14

A catalog illustration can become the basis of an express warranty.

Question 15

The statement "This chainsaw is the best one on the market" will most likely create an express warranty.​

Question 16

In order to create an express warranty the seller must use as the words "warrant" or "guarantee."​

Question 17

An implied warranty arises automatically from the fact a sale has been made.​

Question 18

An express warranty is a statement of fact about the product that becomes part of the basis of the bargain.​

Question 19

When a buyer makes a purchase without relying on the seller's skill and judgment, no warranty of fitness for a particular purpose exists.​

Question 20

Ordinarily, a seller's opinion about the good(s) cannot be treated as a warranty.​

Question 21

In applying the "foreign substance/natural substance" liability test in the sale of food or drink, some courts refuse to impose warranty liability if the thing in the food that caused the harm was naturally present.​

Question 22

The warranties of both merchantability and fitness for a particular purpose exist under the Convention on Contracts for the International Sale of Goods (CISG).​

Question 23

Under the concept of ______, only the original parties to a sales contract could sue each other.​

A)​exclusivity of contract.
B)privity of contract.
C)​privacy of contract.
D)​priority of contract.

Question 24

An inadequate warning label about a product's dangers can be considered a defective product. ​

Question 25

Under what type of warranty is the seller obligated to fix or replace a defective product within a reasonable time at no cost to the buyer?​

A)​full
B)express
C)​limited
D)​implied

Question 26

Which of the following statements made by the seller does not likely constitute an express warranty?​

A)​"This looks beautiful on you."
B)"This is 100 percent wool."
C)​"This motor generates 100 horsepower."
D)​"This is a 3.2 liter rotary engine."

Question 27

Manufacturers who prepare goods to the buyer's specifications are under exceptionally stringent warranty obligations for fitness for a particular use.​

Question 28

Suppose a Ford truck slams into a parade and the driver claims the brakes failed. All of the following are potentially liable in a defective product suit except:​

A)​the Ford dealer.
B)the Ford manufacturer.
C)​the manufacturer of the brakes.
D)​the bystanders

Question 29

In most instances, the mere fact that a sale was made gives rise to a(n):

A)​express warranty.
B)limited warranty.
C)​implied warranty.
D)​full warranty.

Question 30

An auto manufacturer is excused from strict liability if it can be shown the defect was in a component part purchased from a manufacturer.​

Question 31

A limited warranty includes all of the following scenarios except:

A)​coverage of the first buyer.
B)the buyer pays for repairs or replacement of the defective product.
C)​only a portion of the product purchased is covered.
D)​the manufacturer replaces the defective product at no charge to the buyer.

Question 32

If a merchant sells a lawn mower that will not cut any type of grass, there is a breach of the warranty of merchantability.​

Question 33

An action for negligence rests upon common law tort principles.​

Question 34

If an express warranty is breached:

A)​the warrantor is not liable if due care was exercised in the manufacture or handling of the product
B)the seller has no warranty obligation if the buyer had the opportunity to inspect the goods before purchasing them.
C)​the warrantor is not liable if (s)he honestly believed that the warranty was true.
D)​the warrantor is always liable.

Question 35

The federal regulation of express warranties:

A)​applies only to limited warranties.
B)applies to a seller who makes a written express warranty for a consumer product costing more than $10.
C)​requires all express warranties to be full warranties.
D)​requires an implied warranty to be designated as either full or limited.

Question 36

If there is a written contract, a disclaimer of the implied warranty of merchantability must be conspicuous.​

Question 37

Unless otherwise agreed, every merchant seller warrants that goods are sold free of any rightful claim by any third party.​

Question 38

A disclaimer of warranties made in the manner specified by the Uniform Commercial Code is not unconscionable.​

Question 39

The theories of product liability are mutually exclusive.​

Question 40

All of the following are product liability theories except:​

A)​express warranty
B)implied warranty
C)​strict tort liability
D)​assumption of the risk

Question 41

Which of the following implied warranties is created when the buyer relies on the seller to pick out the goods that the buyer requires to meet a stated need?

A)​conformity to description
B)Merchantability
C)​fitness for a particular purpose
D)​conformity to a sample or model

Question 42

Which of the following must be proven by a plaintiff to recover for strict liability in tort?

A)​negligence of the seller or manufacturer
B)recklessness of the seller or manufacturer
C)​unreasonably dangerous defects in goods that cause harm
D)​privity of contract between the manufacturer and the buyer

Question 43

Sal was at home going through his normal workout when he bent his barbell bar.Sal is a professional bodybuilder, and this fact is obvious from his appearance.Sal went to his local sporting-goods store and was approached by a clerk wishing to assist him.Sal told the clerk about his problem and the clerk asked Sal to wait while an appropriate bar was located.The clerk presented Sal with a bar that the clerk said "is just what you need for your type of weight requirements." Sal paid for the bar and was returning home when he stopped at a health food restaurant.The drink that he ordered had an unusual taste, but the food establishment refused a refund.Sal became ill from the drink, which, as it turned out, had a toxic substance in it.Sal had to be hospitalized.When Sal was able to work out again, he attached the weights to the new bar and lifted the bar under his chin.The bar snapped in the middle and severely cut Sal.Sal is angry about the drink and the barbell.What are the applicable warranties involved? Does Sal have a cause of action?

Question 44

The sale of food or drink at a restaurant carries all of the following implied warranties except:

A)​the food or drink will be of average quality.
B)the food or drink will be fit for human consumption.
C)​the food or drink will contain no foreign substances such as a nail or screw.
D)​the food or drink will meet the customer's expectations.

Question 45

All of the following apply to strict tort liability except: 

A)​strict tort liability is independent of the UCC.
B)strict tort liability has abolished privity of contract.
C)​strict tort liability requires the defect exists at the time of manufacture.
D)​strict tort liability requires assumption of the risk.

Question 46

A disclaimer or exclusion of the warranty of merchantability will be invalid if:

A)​the goods cost $500 or more.
B)the defects in the goods are obvious to all buyers.
C)​it is made at the time of the sale.
D)​it is not conspicuously set forth in a writing.

Question 47

With used or secondhand goods, what is fit for normal use is generally:

A)​a higher standard than with new goods.
B)a lower standard than with new goods.
C)​the same standard as with new goods.
D)​not applicable since the goods are not new.

Question 48

The theories of product liability

A)​are mutually exclusive.
B)are not mutually exclusive.
C)​are set forth exclusively in the UCC.
D)​are set forth exclusively in the common law.

Question 49

The warranty of merchantability guarantees that the:

A)​party in question is a merchant.
B)product is fit for the ordinary purposes for which it is sold.
C)​product will remain fit for its normal use for the applicable statute of limitations period.
D)​product can be resold by the buyer if the buyer does not want to keep it.

Question 50

Thelma purchased a used truck from Hall that had been manufactured by International Harvester.To work on the truck engine, Thelma had to have the cab of the truck raised.When it was so raised, the cab fell unexpectedly and fatally injured Thelma.Suit was brought for her wrongful death against Hall and International Harvester.The suit was based on theories of negligence, strict tort liability, and breach of warranty.The defense was raised that there was no liability because the sale to Thelma had been made "as is" and the truck was a used truck.Were these defenses valid?

Question 51

How do the warranty provisions under the CISG compare to the provisions of the UCC?

A)​In most instances, the standards are the same.
B)In all instances, the standards are the same.
C)​The CISG standards are stricter when compared to the UCC standards.
D)​The standards are completely different.

Question 52

At every sale, the seller makes an implied warranty that:

A)​the goods are the finest available.
B)the seller's title is good.
C)​the price is the lowest available.
D)​the seller is a merchant.

Question 53

An examination of goods excludes any implied warranty with respect to a defect that:

A)​is apparent after a reasonable examination is made.
B)will not be apparent without chemical analysis.
C)​will not be apparent until the goods are processed or used in manufacturing.
D)​is unknown to all parties and is not detectable by reasonable examination.

Question 54

Arthur was looking for a Father's Day gift for his dad, Tony.Tony was a cigar smoker but Arthur was a nonsmoker.Arthur went to a cigar store and was looking around when the proprietor suggested Arthur try a new imported cigar.The proprietor touted this new cigar as "just like the great Cuban cigars." Arthur was reluctant but did light one of the cigars, which had a pleasant aromatic smell and took about five to six minutes to be consumed.On this basis, Arthur bought a box of the cigars and presented them to his father as a gift.When the father smoked one of the cigars, it gave off an acrid smell and was completely consumed in less than two minutes.When Arthur saw this, he was very upset and asked his father to try another.The same situation was repeated with the acrid odor and the cigar burning down very quickly like a cigarette.?After Arthur tried unsuccessfully to return the cigars for a refund, Arthur filed a small claims court action against the store.The case was based on the failure of the purchased cigars to conform to the sample, breach of the implied warranty of merchantability, and the misleading statement "just like the Cuban cigars." Discuss the probable outcome of the case.