Deck 20: Warranties and Product Liability

Question 1

The implied warranty of fitness for a particular purpose cannot be disclaimed.

Answer 1

False

Question 2

A seller or lessor cannot disclaim oral express warranties.

Answer 2

False

Question 3

Warranties are meant to protect buyers.

Answer 3

True

Question 4

Because a warranty is a promise by the seller, the law does not recognize implied warranties .

Question 5

An express warranty arises when a seller or lessor indicates that the goods conform to any sample or model.

Question 6

An express warranty arises when a seller or lessor indicates that the goods are the "best" of the kind of goods sold.

Question 7

If a warranty of infringement is breached and the buyer is sued by the claim holder, the buyer must notify the seller.

Question 8

The implied warranty of merchantability can be disclaimed by the expression "as is."

Question 9

W arranties of title arise automatically in most sales contracts.

Question 10

If a creditor repossesses goods from a buyer who has actual knowledge of a security interest, the buyer can recover from a seller for breach of warranty.

Question 11

To create an express warranty, a promise must become part of the "basis of the bargain."

Question 12

A lien is a claim on a person's property to secure the payment of a debt.

Question 13

Defective goods are non-merchantable even if the merchant had no way to know about or discover their defects.

Question 14

Goods cannot be merchantable if they are unfit for a buyer's or lessee's particular purpose.

Question 15

To create an express warranty, a seller or lessor must state that he or she has a specific intention to make a warranty.

Question 16

An express warranty can result from a description of a product on a package.

Question 17

Puffery is exaggerated sales talk that creates an express warranty.

Question 18

A merchant is not deemed to warrant that the goods delivered are free from any patent, trademark, or copyright claims of a third person.

Question 19

In most sales, sellers do not warrant that they have the right to transfer title to the goods sold.

Question 20

Implied warranties cannot arise from a "course of dealing."

Question 21

Under the doctrine of strict liability, liability is based on a failure to exercise reasonable care.

Question 22

A product has a manufacturing defect when the product departs from its intended design.

Question 23

A product is defective if a warning would make the use of the product reasonably safe but the warning is omitted.

Question 24

Pat, a salesperson for Quality Fruit, Inc., shows Ron, a buyer for Sweet Food Company, samples of peaches, stating that any shipment will match the samples. This statement is

A) an express warranty.
B) an implied warranty.
C) none of the choices.
D) puffery.

Question 25

Sellers are required to give express written warranties for consumer goods.

Question 26

Most states consider the negligent actions of the plaintiff when determining liability and damages in a product liability case.

Question 27

Under most circumstances, sellers will be presumed to have warranted that its title to the goods is

A) the same as the manufacturer's.
B) none of the choices-a warranty of title is not presumed.
C) good and valid.
D) the best that money can buy.

Question 28

Wheels Inc. sells new and used bicycles. Under most circumstances, Wheels will be presumed to have warranted that its title to the bikes is

A) the same as the manufacturer's or previous owner's.
B) none of the choices-a warranty of title is not presumed.
C) good and valid.
D) the best that money can buy.

Question 29

When a person is injured by a product there is an automatic claim under strict liability.

Question 30

Even when the dangers associated with certain products are commonly known, manufacturers must warn users.

Question 31

The UCC

A) addresses sales but not warranties.
B) requires all states to define express and implied warranties .
C) contains rules on warranties in sales and lease contracts .
D) only provides for the existence of express warranties.

Question 32

A " full " warranty requires a full refund for any defective goods.

Question 33

Under the rule of strict liability in tort, the basis of liability does not include the suppliers of component parts because the manufacturer had to work with those parts to create the final product.

Question 34

A manufacturer must exercise "due care" to make a product safe.

Question 35

Strict liability will not result in a remedy to an injured user unless there is privity of contract.

Question 36

A product cannot have a design defect if it is made in conformity with the manufacturer's design specifications.

Question 37

A seller or lessor is not liable for any latent defects that ordinary inspection would not reveal.

Question 38

Ann buys a backhoe from Big Equipment Inc. Ann is unaware that Credit Company holds a lien against the backhoe. If Credit repossesses the backhoe, Ann can

A) recover from Big for breach of warranty.
B) do nothing.
C) recover from the manufacturer for breach of warranty.
D) recover from Credit for breach of warranty.

Question 39

Defendants in product liability cases can raise assumption of risk as a defense.

Question 40

If the misuse of a product is reasonably foreseeable, the seller does not have to take measures to guard against it.

Question 41

Fred buys running shoes from Gear Store, a shoe store specifically for runners and staffed by seasoned racers. He tells the clerk that he wants the shoes to compete in High Pace Triathlon. The clerk recommends the TriRace model. The shoes break apart during the competition, causing Fred to fall and sustain an injury. The seller most likely breached

A) an express warranty.
B) an implied warranty of fitness for a particular purpose.
C) an implied warranty of merchantability.
D) none of the choices.

Question 42

An implied warranty of merchantability means that the goods are reasonably

A) fit for the buyer's particular purpose so long as the buyer tells the seller the purpose.
B) fit for the ordinary purpose for which such goods are used.
C) suitable for resale at an acceptable price.
D) the best quality that money can buy.

Question 43

Under the UCC, an implied warranty of merchantability arises

A) automatically when the seller is a merchant.
B) only if the lessee asks for it.
C) only if the lessor expresses such a warranty.
D) only in conjunction with sales, not lease, contracts.

Question 44

Blake, a salesperson for Custom Equipment Inc. shows Dylan, a buyer for Furniture Inc., display items in Custom's showroom, stating that any purchased equipment will match the display. This statement is

A) an express warranty.
B) an implied warranty.
C) none of the choices.
D) puffery.

Question 45

Quade is an expert in twentieth-century art. Rachel visits Quade's gallery, seeking to buy artwork as an investment. Quade shows her a painting that in his opinion is by Picasso. Quade's statement is

A) an express warranty.
B) an implied warranty.
C) a warranty of title.
D) puffery.

Question 46

HandiTools, Inc., sells power tools, power tool parts, and related supplies under "full" warranties. Under the Magnuson-Moss Warranty Act, this means that HandiTools must provide

A) free repair or replacement of any defective part.
B) none of the choices.
C) a full refund on request.
D) repair or replacement of any defective part at a reduced charge.

Question 47

Street Bikes, Inc., makes and sells a bike to Ted. Street Bikes fails to exercise "due care" to make the bike safe, however, and Ted is injured as a result. Street Bikes is most likely liable for

A) assumption of risk.
B) commonly known danger.
C) negligence.
D) product misuse.

Question 48

Kanye goes to a Lawn & Yard store to tune up his mower. Marty, the service technician, learns that Kanye's lawn is overgrown and rocky, and advises the use of a certain type of oil, plug, filter, and blade. Later, the mower breaks down due to the use of the items recommended by Marty. Kanye may recover from Lawn & Garden for breach of

A) an express warranty.
B) an implied warranty of fitness for a particular purpose.
C) an implied warranty of merchantability.
D) none of the choices.

Question 49

MotorCo Inc. makes and sells auto parts. On one MotorCo box is a label that reads "Contains one gross (144) sparkplugs, assorted sizes." This statement is

A) an implied warranty of fitness for a particular purpose.
B) an implied warranty of merchantability.
C) an express warranty.
D) none of the choices.

Question 50

Brass Instruments, Inc., sells seventy-six trombones to Community Band. To avoid liability for most implied warranties, Brass should state in writing that the trombones are sold

A) as is.
B) by a merchant.
C) in perfect condition.
D) with no known defects.

Question 51

Riverside Mill and Standard Contractors enter into a contract for a sale of lumber. The mill knows the purpose for which the buyer will use the goods. Under the UCC, an implied warranty of fitness of a particular purpose arises if

A) the buyer is relying on the skill of the seller to select suitable goods.
B) the buyer asks for it.
C) the seller is a merchant who deals in goods of the kind sold.
D) the seller knows that the product is fit for any purpose.

Question 52

Chord Guitars Inc. sells guitars and other stringed instruments. A Chord salesperson says to a potential customer, "This Chord is the best guitar you'll find anywhere, even online." This statement is

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

Question 53

Product liability law requires that a manufacturer must exercise due care in all of the following except

A) product design.
B) selection of the material used in the product.
C) selecting warnings to place on the label.
D) product financing.

Question 54

Water Pipe Company includes in its contracts a provision that reads, in large red letters, "There are no warranties that extend beyond the description on the face hereof." This disclaimer negates

A) the implied warranty of fitness for a particular purpose.
B) the implied warranty of fitness for a particular purpose.
C) the implied warranty of title.
D) none of the choices.

Question 55

Cruisin' Autos, Inc., sells cars to consumers. To avoid liability for oral express warranties, each sales agreement should note that a car is sold

A) as is with these words in large print, in a different color font, and on the front page.
B) in perfect condition.
C) subject to written warranties only with this language in an obvious place in the contract.
D) with no known defects.

Question 56

The Magnuson-Moss Warranty Act attempts to prevent deception in warranties by

A) displacing the UCC as the primary source of warranty rules.
B) making warranties easier to understand.
C) prohibiting disclaimers of warranties.
D) requiring sellers to give written warranties for consumer goods.

Question 57

Eliza buys a new motorcycle from Fab Cycles, Inc. The Fab sales representative promises that the engine has fewer than 25 miles on it. The most important factor in determining whether an express warranty is created is whether

A) Eliza expresses to Fab Cycles what she wants warranted.
B) Eliza's desire for the cycle becomes part of her motivation to deal.
C) Fab Cycles expresses to Eliza what it expects of its customers.
D) Fab Cycles's promise becomes part of the basis of the bargain.

Question 58

Ski Shop sells a pair of skis to Tammy. When Tammy uses the skis, they snap in two. The cause is something that the seller did not know about and could not have discovered. This is a breach of

A) the implied duty of inspection.
B) the implied warranty of merchantability.
C) an express warranty.
D) the implied warranty of title.

Question 59

RecEquip Stores and SportsPower Products, Inc., enter into a contract for a sale of trampolines. SportsPower Products is a merchant who deals in goods of the kind sold. Based on these facts, under the UCC an implied warranty of merchantability arises

A) automatically.
B) only if the buyer asks for such a warranty.
C) only if the seller expresses such a warranty.
D) only in conjunction with lease contracts, not sales contracts.

Question 60

Pet Houses, Inc. sells shelters for animals under "limited" warranties. Under the Magnuson-Moss Warranty Act, this means that the warranties on the shelters

A) may require the buyer to pay for repairs or replacement for defective parts.
B) require free repair of a defective part instead of a full refund or replacement.
C) cover only some of the shelters.
D) are not express but are implied.

Question 61

Ceramic Corporation makes ceramic products for commercial uses, including heat-resistant tiles for industrial ovens. When damage occurs in an oven at Duramold, Inc., liability may be imposed on the manufacturer if the tiles sold to Duramold were

A) in perfect condition at the time of their sale.
B) damaged by their use.
C) substantially changed after their sale.
D) in a defective condition when they were sold.

Question 62

In making and marketing tools, Do-It-Rite Corporation, like other sellers, is required to take actions to protect against

A) every conceivable misuse of a product.
B) only foreseeable misuses of a product.
C) no misuses of a product.
D) only obvious misuses of a product.

Question 63

The brakes on Dirk's Tour de Valle bicycle malfunction, but he continues to ride it because he likes the thrill of the unstoppable acceleration. One night, enjoying a fast downhill pace, he speeds through a stop sign and is struck by a truck. In Dirk's suit against Tour de Valle, the bike maker can raise the defense of

A) commonly known dangers.
B) assumption of risk.
C) assumption of risk.
D) product misuse.

Question 64

To assemble and sell stoves and fireplaces, Hearth & Home, Inc., buys parts from Inflame Stove & Fireplace Parts and installs them without changing them. If the parts are defective, strict liability may apply to

A) neither Hearth & Home nor Inflame.
B) both Hearth & Home and Inflame.
C) Inflame only.
D) Hearth & Home only.

Question 65

Listening Devices, Inc., makes and markets phones. When problems develop with Listening products or sales, the company may be liable in product liability for any of the following except

A) a manufacturing defect.
B) a design defect.
C) an inadequate warning.
D) an ineffective marketing plan.

Question 66

DIY-Haul, Inc., makes , sells, and leases trucks. Ed files a product liability suit against DIY-Haul, alleging a design defect. To win a design defect case, Ed must show

A) that the cost of the product to manufacture is very high.
B) the number of people harmed by the product is unreasonable.
C) that DIY-Haul could not have known of the defect.
D) that a less dangerous alternate design exists.

Question 67

Safe-Rite Company makes chargers for electronic devices. Tina buys a charger, suffers an injury during its use, and later files a product liability suit against Safe-Rite, alleging a warning defect. In deciding whether to hold Safe-Rite liable, the court would consider

A) the consumers' general lack of desire to read the product's warnings.
B) the plaintiff's specific lack of desire to read the product warnings.
C) the obvious risks of other products.
D) the obvious risks of this product.

Question 68

Bob is shopping in Carl's Hardware Store when a nail gun in use by Dan, one of Carl's employees, fires without warning and hits Bob in the leg. Carl checks the gun and discovers that it was assembled improperly. Bob files a suit against Eagle Tools, Inc., the company who sold the nail gun to Carl's , for product liability, on the ground of strict liability. What are the elements for an action based on strict liability? In whose favor is the court likely to rule and why?

Question 69

CutUp Corporation makes knives. A knife owner files a product liability suit against CutUp, alleging a manufacturing defect. CutUp's knives may suffer from a manufacturing defect

A) if they were made according to a flawed design.
B) if the packaging fails to warn about foreseeable dangers.
C) unless CutUp used all possible care in producing the knives.
D) if the knives do not match the intended design.

Question 70

Eric is looking for a new car and finds a sports utility vehicle (SUV) that he likes, but he wants a particular color. The salesperson states that she can order an SUV that will be exactly like the floor model but in the preferred color. The salesperson gives Eric a brochure about the SUV and says that she can order an SUV just as that model is described in the brochure. Relying on this information, Eric orders the SUV.   Explain what express and implied warranties are part of this contract.

Question 71

AgriGro, Inc., sells hybrid seed to farms and other agricultural enterprises. Brandon buys and plants AgriGro seed on his Country Farm, but no crop grows because the seed is defective. Brandon sues AgriGro for product liability based on negligence. To win, Brandon must show that

A) AgriGro sold the seed to Brandon.
B) Brandon knew and appreciated the risk caused by the defect.
C) Brandon suffered damage caused by the defect.
D) the "defect" was a commonly known danger.

Question 72

Coffee Products, Inc., makes espresso machines and sells one to Diners Café. An employee working at the coffee bar is injured when the machine malfunctions. If the injury occurred as a result of a misrepresentation about the product, Coffee is most likely liable for

A) a commonly known danger.
B) fraud.
C) privity.
D) puffery.