Deck 20: Warranties and Product Liability

Question 1

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.

Answer 1

True

Question 2

The implied warranty of title differs from other warranties in that it protects buyers in their ownership of the goods bought.

Answer 2

True

Question 3

A seller may create an express warranty by merely stating an opinion.

Answer 3

False

Question 4

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

Question 5

When a seller uses descriptive terms and the buyer takes them into consideration when making the purchase,the seller has nonetheless made no warranty that the goods she delivers will meet the description.

Question 6

Under the UCC,the implied warranty of merchantability applies to the sale of food or drink.

Question 7

Disclaimers in contracts are usually effective to shield a manufacturer or seller against liability for negligence to consumers.

Question 8

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 conforming to the general description of the goods available in the market.

Question 9

Implied warranties imposed by law are absolute.

Question 10

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

Question 11

The implied warranty of merchantability focuses on whether the goods are fit for a particular purpose.

Question 12

Implied warranties:

A)imposed by law are absolute.
B)protect the buyer in ownership of the goods bought.
C)warrant that the goods are free of any liens or claims of other parties.
D)establish responsibility on the seller for the quality of the goods sold.

Question 13

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

Question 14

The warranty of fitness for a particular purpose applies only to merchants.

Question 15

The creation of an express warranty depends on:

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

Question 16

Under the Magnuson-Moss Warrant Act and the FTC regulations,the seller is not required to give a written warranty.

Question 17

Most states hold that plaintiffs can recover for purely economic losses under strict liability.

Question 18

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

Question 19

An express warranty is created when:

A)a seller makes an affirmation of fact or promise concerning the goods that becomes part of the basis of the bargain.
B)a seller uses descriptive terms as a part of the bargaining process,but the buyer does not take it into consideration when making the purchase.
C)a seller sells goods meant for use for ordinary purposes.
D)a seller avoids using a sample or model as the basis for the contract.

Question 20

The same statement regarding a product might be interpreted as either an opinion or an express warranty depending on:

A)whether the contract is oral or written.
B)the relative knowledge of the parties involved.
C)whether the contract contains a disclaimer.
D)the type of goods or services dealt with.

Question 21

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)it is limited in time (say,to one or two years).

Question 22

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

A)The act applies to all sellers of a "consumer product" that costs more than $50.
B)The act requires a seller of consumer goods to give a written warranty,either full or limited.
C)The FTC enforces the disclosure provisions of the warranty act and regulations.
D)The act requires a full warranty to have a time limit.

Question 23

Kyle,a manufacturer of cribs and various kinds of furniture for children,sold 100 cribs to Tara,the owner and operator of a store that specialized in the sale of such items.The sale was accomplished pursuant to a typewritten contract entered into by both parties.You are to assume that the implied warranties of merchantability and fitness for a particular purpose would apply to the transaction,unless such warranties were effectively disclaimed.The parties' typewritten contract included,in a prominent position,a term that was in all capital letters,unlike the rest of contract,which was in standard type.The term read: "Seller hereby disclaims all implied warranties." On these facts,Kyle has probably made an effective disclaimer of:

A)the implied warranty of merchantability and 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 fitness for a particular purpose,but not the implied warranty of merchantability.
D)the implied warranty of merchantability,but not the implied warranty of fitness for a particular purpose.

Question 24

Which of the following implied warranties addresses the status of the ownership of goods?

A)Title
B)Merchantability
C)Fitness
D)Description

Question 25

Which of the following describes an action where liability of a seller is based on the theory that the manufacturer failed to use reasonable care to avoid foreseeable injury to the ultimate user or consumer?

A)Negligence
B)Strict liability
C)Breach of warranty
D)Magnuson-Moss Act

Question 26

Which of the following is a purpose of the Magnuson-Moss Warranty Act?

A)It provides maximum warranty protection for consumers.
B)It increases consumer understanding of warranties.
C)It protects all business to business transactions.
D)It insists on the sellers compulsorily giving a written warranty to the consumers.

Question 27

Which of the following is true of strict liability?

A)All courts will not hold the retailer liable if the manufacturer is available for suit.
B)Most states hold that plaintiffs cannot recover for purely economic losses under strict liability.
C)No state will allow economic loss recovery even if the defect caused the product to be unreasonably dangerous.
D)It is applied only to situations involving the sale of used merchandise.

Question 28

Privity of contract:

A)is the relationship between the parties in a contract.
B)is the best defense in case of negligence in action.
C)limits the duty of care owed to third-parties.
D)states the rights enjoyed by any natural person who is in the household of the buyer.

Question 29

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 30

The 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 the plaintiff is a merchant trying to recover for property damage or economic loss.
C)if the disclaimer is conspicuous.
D)in the case of a personally injured consumer.

Question 31

Which of the following statements is true of the enforcement of warranties?

A)The FTC enforces the disclosure provisions of the warranty act and regulations.
B)Consumers cannot sue the maker of the warranty for failure to fulfill its terms.
C)The FTC enforces the seller's obligation to make the terms available before or after the sale.
D)Consumers can sue the manufacturer if the manufacturer offers the warranty,but not the retailer even if retailer grants warranty.

Question 32

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)liability based on negligence involves a contractual relationship.
D)the obvious danger rule is used as a complete defense.

Question 33

Which of the following requirements must be satisfied by the sellers according to the Magnuson-Moss Warranty Act and the FTC guidelines,when they give a written warranty?

A)It should be included in more than one document.
B)It should include a clear description of what is covered,but never include what is excluded by the warranty.
C)It should include the time the warranty begins and its duration.
D)It should allow the seller to choose between a refund and a replacement after the product has been repaired a number of times.

Question 34

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

A)Industry wide liability
B)Privity
C)Negligence
D)Product misuse

Question 35

In an action for 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 36

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 bars recovery.
C)contributory negligence prevents recovery.
D)the manufacturer is required to provide the consumer a disclaimer at the time of sale.

Question 37

Who among the following has a duty to inspect new,prepackaged goods even if they have no reason to know of a defect?

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

Question 38

An increasing number of courts hold that the obvious danger rule:

A)is no longer a complete defense.
B)is a complete defense.
C)is a complete defense only if a warning is issued after a sale.
D)is not a complete defense even if a warning is issued after a sale.

Question 39

A consumer who misuses a product:

A)may still recover under the theory of strict liability.
B)may not recover under the theory of strict liability.
C)may recover under the theory of strict liability even if the misuse was not foreseeable.
D)cannot recover under the theory of strict liability even if the danger it created was foreseeable.

Question 40

"Fungible goods" are:

A)goods which are packaged and labeled separately (such as units which come in cartons or cases).
B)mixed goods which are identical and cannot be separated (such as grain or coal).
C)perishable goods which have been improperly packaged or which have damaged packaging and are open to contamination.
D)goods which conform to any promises or statements of fact made on the container or label.

Question 41

A statute of repose bars the bringing of a tort-based product liability suit:

A)usually after 10 years from the date the product is first sold to a user.
B)usually after five years from the date the product is first sold to a user.
C)usually after 20 years from the date the product is first sold to a user.
D)usually after 50 years from the date the product is first sold to a user.

Question 42

Which of the following is true about statutes of repose?

A)This 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)People covered by statutes of repose now can bring suit even if their injury is not discovered within the statutory period.
D)The tort statute of limitations gives people one or two years from the time they discover their injury in which to bring their suit.

Question 43

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

Question 44

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.Was the manufacturer of the sedan negligent for failing to warn,or failing to include a release in its design of the car?

Question 45

Under the theory of industrywide 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 consumer identify a likely manufacturer in order to expedite the resolution of the claim.
C)drop the complaint and call for the legislature to issue new industry laws.
D)prohibit further manufacturing of the product.

Question 46

Jon,a high-school senior,bit into a turkey bone in a bite-sized cube of white turkey meat in his high-school cafeteria.He felt something in his throat and after some effort expelled a small ½ inch bone.He sustained injury to his esophagus and was hospitalized for four days.Jon 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 Jon?

Question 47

There is an action against a manufacturer who is sued on the basis of industrywide liability for the manufacture and sale of a standardized product that caused injury after a number of years.Which of the following defenses can the manufacturer raise to avoid or minimize its liability?

A)The manufacturer should be truthful about the fact that he manufactured the product that caused the injury to the plaintiff.
B)It manufactures the product with a disclaimer.
C)The risks from its product were lower than those from other products.
D)Its market share was more than alleged by the plaintiff.

Question 48

Jen decides to trim the sides of her hedge with her electric lawn mower and is injured in the process,Jen:

A)cannot recover in strict liability because she misused the electric lawn mower.
B)can recover in 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 in strict liability because the lawn mower was per se dangerous.
D)cannot sue all market manufacturers of electric lawn mowers,but only the manufacturer she has a contract with for dangerous product design.

Question 49

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

Question 50

Irma bought a pint-sized thermos bottle from "Kash N' Karry." After a couple of months of use,she poured coffee into it one morning and was adding some milk when it exploded,sending shards of glass into her face and injuring her eye.Irma testified that she had not dropped the thermos and had not abused it.She sued "Kash N' Karry," claiming,among other things,breach of warranty of merchantability.Under the UCC,was the warranty of merchantability breached?