Deck 19: Warranties Product Liability and Consumer Protection

Question 1

Which of the following is true of a 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 otherwise excluded or modified, merchants do not make an implied warranty of merchantability.

Answer 1

C

Question 2

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

Answer 2

A

Question 3

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 3

False

Question 4

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.

Question 5

The requires creditors to notify a potential recipient of credit whenever any adverse action or denial of credit was based on a credit report.

A)Sherman Act
B)Truth in Lending Act
C)Fair Credit Reporting Act
D)Mangnuson-Moss Warranty and Federal Trade Commission Improvement Act

Question 6

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

Question 7

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 8

A seller's warranty that the goods shall be delivered free from any security interest or any other lien of which the buyer at the time of making the sales contract had no knowledge is known as a .

A)warranty against encumbrances
B)warranty of title
C)warranty of conformity to a description, sample or model
D)warranty of fitness for a particular purpose

Question 9

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

Question 10

​ Explain product uniformity.

Question 11

Which of the following warranties applies to all sellers?

A)warranty of merchantability
B)warranty of title
C)warranty against infringement
D)warranty of fitness for normal use

Question 12

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 13

The warranty against encumbrances applies to the goods only at the time they are delivered to the buyer; it is not concerned with an encumbrance that existed before the sale was made.

Question 14

Under the Fair Credit Reporting Act, certain types of adverse information may not be maintained in a consumer's credit report for more than seven years.

Question 15

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 16

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 17

The Truth in Lending Act (TILA)was enacted to set safety standards for consumer products.

Question 18

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

Question 19

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

Question 20

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.