Deck 19: Warranties, Product Liability, and Cons

Question 1

An express warranty applies even if defects are actually known to the buyer, or defects are so apparent that no special skill or ability is required to detect them.

Answer 1

False

Question 2

The Federal Trade Commission demands that advertisements be limited to statements about products that can be substantiated.

Answer 2

True

Question 3

Which of the following is true of sale of food or drink?

A) The seller must always provide an express warranty that the food is fit for consumption.
B) The seller is always liable  even when a harmful object found in food is  natural to the particular kind of food.
C) It is not considered as a sale if the purchaser consumes it off the premises.
D) The sale carries an implied warranty that the food is fit for consumption.

Answer 3

D

Question 4

Which of the following is true of warranty of merchantability?

A) It imposes the duty to employ a particular design, on the merchant, for safety reasons.
B) Warranty of merchantability exists even after the risk of loss has passed to the buyer.
C) Warranty of merchantability relates only to the fitness of the product made or sold.
D) Unless excluded or modified, merchants do not make an implied warranty of merchantability.

Question 5

A small piece of molded plastic shown to a car buyer to illustrate the materials and methods used in the construction of cars creates a sale by sample.

Question 6

The statement of the seller in which the article sold is warranted or guaranteed is known as an implied warranty.

Question 7

The _____ is the total dollar amount the borrower will pay for the loan.

A) equity charge
B) balloon charge
C) finance charge
D) commitment charge

Question 8

Which of the following is true of full warranties?

A) They are the same as implied warranties.
B) They are not made by the seller and are imposed by law.
C) The seller must remedy any defects without charge.
D) The seller need not offer a replacement if the product is not repairable.

Question 9

Jack, a second-hand dealer of cars, provides his clients with the opportunity to examine them. Jenny test-drove a car and got it checked by her mechanic as well. However, the mechanic missed a broken valve and the car broke down after the purchase. Which of the following is likely to happen in this scenario?

A) Jack is exempt from prosecution as the principle of caveat emptor applies.
B) Jack is responsible for selling a faulty car and can be prosecuted for fraud.
C) Jenny can claim compensation through courts as per the principle of caveat emptor.
D) Jack can be prosecuted by the mechanic for misleading him during purchase.

Question 10

A warranty is an assurance that the article sold will conform to a certain standard or will operate in a certain manner.

Question 11

Unless otherwise agreed, a merchant warrants that goods shall be delivered free of the rightful claim of any third person by way of patent or trademark infringement.

Question 12

A _____ is a portion of a whole mass that is the subject of the transaction.

A) parcel
B) notice
C) model
D) sample

Question 13

All sellers, by the mere act of selling, make a warranty that they have good title and make rightful transfers.

Question 14

The sale of food or drink, to be consumed off the seller's premises, is not a sale.

Question 15

Explain product uniformity.

Question 16

______ is information that the law presumes everyone knows by virtue of the fact that it is filed or recorded on the public record.

A) Instructive notice
B) Model notice
C) Constructive notice
D) Sample notice

Question 17

A(n) _____ is one that the seller did not make but that is imposed by the law.

A) conditional warranty
B) express guarantee
C) limited guarantee
D) implied warranty

Question 18

Implied warranty arises as to fitness of used property for ordinary use from a sale made by a casual seller.

Question 19

According to the Magnuson-Moss Warranty and Federal Trade Commission Improvement Act, the consumer need not be informed of the warranty prior to the sale.

Question 20

The statement of the seller in which the article sold is warranted or guaranteed is known as an _____.

A) express warranty
B) unconditional warranty
C) universal warranty
D) express guarantee