Deck 11: Sales,leases,and Product Liability

Question 1

In a contract between merchants,additional terms in the parties' separate standard forms can automatically become part of the contract.

Answer 1

True

Question 2

Goods that are merchantable are fit for any purpose.

Answer 2

False

Question 3

Under the UCC,an agreement modifying a contract needs no consideration to be binding.

Answer 3

True

Question 4

To constitute an express warranty,a representation must be in writing.

Question 5

A buyer or lessee who has accepted nonconforming goods may keep the goods and recover for any loss resulting in the ordinary course of events.

Question 6

All oral contracts are enforceable under the UCC.

Question 7

In most sales,sellers warrant that they have good and valid title to the goods sold.

Question 8

Acceptance of goods is presumed when a buyer or lessee fails to reject the goods within a reasonable time.

Question 9

Express warranties can be found in a seller's brochure.

Question 10

Under the UCC,a sales or lease contract will fail for indefiniteness if one or more terms are left open.

Question 11

The parties to a sales or lease contract can vary their respective rights and obligations by contractual agreement.

Question 12

UCC Article 2A covers any transaction that creates a lease of goods.

Question 13

If the parties to a sales contract state that a certain remedy is exclusive,then it is the sole remedy.

Question 14

If goods or tender of delivery fail in any respect to conform to a contract,the buyer or lessee loses the right to accept the goods.

Question 15

Under the UCC,a firm offer for a sale or lease of goods made by a merchant can be revoked at any time before acceptance.

Question 16

A seller who makes a statement that relates to the value or worth of the goods creates an express warranty.

Question 17

If a buyer breaches a contract and the seller resells the goods to another party,the seller cannot hold the breaching buyer liable for any loss.

Question 18

A lessee is a party who transfers a right to the possession and use of goods under a lease.

Question 19

UCC Article 2 applies to sales of goods,real estate,and services.

Question 20

If performance is commercially impracticable,the perfect tender rule no longer applies.

Question 21

A manufacturer's duty of care does not extend to the inspection and testing of products bought to incorporate in the final product.

Question 22

To support the imposition of strict product liability,a product must be mishandled between the time it is sold and the time an injury occurs.

Question 23

Misrepresentation on a label is not enough to show an intent to induce the reliance of anyone who may use the product.

Question 24

Readymade Construction Corporation offers to buy from Set-Still Cement Company a certain quantity of cement for a certain price.Set-Still can accept the offer by

A)a material alteration of the terms within a reasonable time.
B)a promise to ship or a prompt shipment of the cement.
C)a prompt shipment of the cement only.
D)a shipment of nonconforming goods with a notice of accommodation.

Question 25

A seller must take steps to guard against the foreseeable misuse of a product.

Question 26

A product liability action may be based on warranty theories.

Question 27

An action in strict product liability requires that the product not be in a defective condition when the defendant sells it.

Question 28

Over the course of a year,Retail Market,Inc.,sells goods from its inventory and one of its warehouses.In exchange,Retail receives checks and other items that substitute for cash,which Retail uses to repay a loan from Savers Bank.Article 2 of the UCC governs

A)the checks.
B)the payment of the loan.
C)the sale of the buildings.
D)the sale of the goods.

Question 29

An action in strict product liability requires that the defendant fail to exercise reasonable care.

Question 30

Many jurisdictions will consider the negligent actions of both the plaintiff and the defendant when apportioning liability in a product liability action.

Question 31

Implied warranties can arise as a result of a course of dealing.

Question 32

Fresh Harvest,Inc.,agrees to sell to Gina's Bed & Breakfast Inn a certain amount of locally grown produce each week but no mention is made of where the goods are to be delivered.In general,the UCC requires that the delivery take place at

A)a neutral place of business halfway between the parties' locations.
B)a "reasonable" place of delivery.
C)Fresh Harvest's place of business.
D)Gina's place of business.

Question 33

Merchants are required to warrant that the goods they sell or lease are fit for the particular purpose for which a buyer or lessee will use the goods.

Question 34

A product liability action based on negligence does not require the plaintiff and the defendant to be in privity of contract.

Question 35

Due care must be exercised in designing a product.

Question 36

The types of product defects that have traditionally been recognized in product liability law include inadequate warnings.

Question 37

One requirement for a product liability suit based on negligence is a failure to exercise due care.

Question 38

Sellers or lessors are liable only for products that are reasonably dangerous.

Question 39

Rikki and Sid enter into a sales contract for tennis equipment.With respect to the specific contractual provisions set out in the UCC,Rikki and Sid may

A)agree to different terms only to a reasonable extent.
B)agree to different terms unless they "get caught."
C)agree to whatever terms they wish.
D)not agree to different terms.

Question 40

Five Star Flooring orders carpet from Textile Mills Corporation,but Textile does not deliver.Five Star will probably not be able to enforce the agreement if the parties omitted

A)a delivery term.
B)a payment term.
C)a quantity term.
D)a price term.

Question 41

Woodgrain Products Company and Sylvia enter into a contract for a sale of lumber.Woodgrain knows the purpose for which Sylvia will use the goods.Under the UCC,an implied warranty of fitness of a particular purpose arises

A)if the buyer is relying on the seller to select suitable goods.
B)if the buyer asks for it.
C)if the seller is a merchant who deals in goods of the kind sold.
D)in conjunction with lease contracts,not sales contracts.

Question 42

GR8 Skates Company makes and sells a pair of skates to Homer.GR8 fails to exercise "due care" to make the skates safe,and Homer is injured as a result.GR8 is most likely liable for

A)assumption of risk.
B)knowledgeable use.
C)negligence.
D)foreseeable misuse.

Question 43

Cheesy Pizza Company contracts to sell 1,000 cases of frozen pizzas to Roller Rinx,Inc.,but refuses to deliver.Due to a spice shortage,Roller Rinx cannot obtain pizza elsewhere.Roller Rinx's right to recover the goods from Cheesy is the right of

A)cover.
B)cure.
C)replevin.
D)specific performance.

Question 44

Dorothy eats a candy bar made and sold by Eastwich Candy Corporation and becomes ill.Dorothy files a suit against Eastwich,alleging that the candy bar was not merchantable.Merchantable food is food that is fit to eat on the basis of

A)consumer expectations.
B)what constitutes a perfect condition.
C)its maker's intentions.
D)its producer's experience.

Question 45

Nature's Foods,Inc.,orders "Grade A" oil from Olive Grove Farms to process and sell to Pic 'N Pay Grocers.Olive Grove ships "Grade B" oil,which Nature's Foods accepts.To recover damages for the nonconformity,Nature's Foods must give notice of the breach within a reasonable time to

A)Olive Grove.
B)Pic 'N Pay.
C)no one.
D)the appropriate government agency.

Question 46

Merchant Supply Company and National Discount Stores enter into a contract for a lease of cash registers.Merchant assures National that it has valid title to the goods.Under the UCC,this type of title warranty arises

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

Question 47

Good Tire Company and Hiway Auto Service enter into a contract for a sale of tires.Good Tire is a merchant who deals in goods of the kind sold.Under the UCC,an implied warranty of merchantability arises

A)automatically in sales contracts.
B)only if the buyer asks for it.
C)only if the seller does not expressly disclaim it.
D)only in conjunction with lease contracts,not sales contracts.

Question 48

Sari buys a new sport utility vehicle (SUV)from 'Tastic Cars & Trucks,Inc.The most important factor in determining whether an express warranty is created is whether

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

Question 49

Reilly makes a fraudulent misrepresentation to Sonny,a consumer,who buys Reilly's product.In using the product,Sonny suffers an injury.To serve as a basis for recovery,the misrepresentation must concern

A)a material fact.
B)a national fact.
C)an ethereal fact.
D)a scientific fact.

Question 50

Equipment Rental Corporation and Family Farm,Inc.,are parties to an oral agreement for a lease of farm equipment with payments in excess of $10,000.They may satisfy the Statute of Frauds by

A)mutually agreeing not to commit fraud.
B)repeating the terms in a phone call.
C)setting out the terms in a memo.
D)shaking hands on the deal.

Question 51

Recycle Packaging,Inc.,agrees to sell 50,000 6-ounce yogurt containers to Organic Dairy Company.Recycle can obtain only 20,000 of the 6-ounce containers,but also ships 30,000 more expensive 8-ounce containers for the same price.Organic rejects the 8-ounce containers.With time for performance not yet expired,Recycle can

A)attempt to cure the defect.
B)cancel the contract.
C)recover the purchase price plus incidental damages.
D)resell or dispose of the goods and hold Organic liable for any loss.

Question 52

Concrete Products,Inc.,assures Deepwater Construction Company (DCC)that Concrete's cement will not crack within a certain range of pressure.This "assurance" is

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

Question 53

Parker,a salesperson for Quality Textiles,Inc.,shows Rosa,a fabric buyer for Style Clothing Company,samples of cloth,stating that any shipment will match the samples.This statement is

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

Question 54

Gleaming Gem Corporation agrees to sell Jewelry Outlets,Inc.(JOI),fifty new diamonds,but the contract does not specify a place of delivery.JOI is expected to pick up the goods.The place of delivery is

A)Gleaming's place of business.
B)JOI's place of business.
C)the Annual Gems and Jewels Convention.
D)the U.S.Postal Service office nearest to JOI's place of business.

Question 55

Consuelo and Gabriela enter into a contract for a sale of saxophones and other brass instruments.Consuelo delivers,but Gabriela does not pay.Consuelo can normally recover as damages

A)any profit lost minus any loss avoided.
B)whatever amount the seller wishes to claim.
C)the purchase price plus incidental damages.
D)the market price at the place at which the seller delivered the goods.

Question 56

Oven Products Company makes microwave ovens.Pico discovers that his Oven Products oven is defective and sues the maker for product liability based on strict liability.To win,Pico must show that

A)Oven Products sold the oven to Pico.
B)Pico knew and appreciated the risk caused by the defect.
C)Pico suffered an injury caused by the defect.
D)the "defect" was a commonly known danger.

Question 57

Olga,a salesperson for Pre-owned Cars & Trucks,Inc.,tells Quincy,"This is the best car I've ever seen." This statement is

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

Question 58

Swank Tool Company makes hedge trimmers.Troy is injured while using a Swank trimmer and sues the company for product liability based on negligence.To win,Troy must show that

A)Swank did not use due care with respect to the trimmer.
B)Swank misrepresented a material fact regarding the trimmer.
C)Troy was experienced in the use of trimmers.
D)Troy was in privity of contract with Swank.

Question 59

Heat Wave,Inc.,makes portable heaters.To pay for its liability for injuries to consumers harmed by defective heaters,Heat Wave can pass the costs on to

A)consumers in the form of higher prices.
B)other manufacturers of heaters on a theory of market share liability.
C)suppliers in the form of "reverse kickbacks." d the government in the form of direct payments.

Question 60

Gunmakers Pride Corporation contracts for the sale of twelve hunting rifles to Hunters Supply store.Gunmakers delivers nonconforming goods.Acceptance will be presumed unless Hunters Supply rejects the goods

A)within a reasonable time after delivery.
B)within a reasonable time after ordering the goods.
C)within any time,since hunting rifles are not perishable.
D)before the last day of the current hunting season.

Question 61

Green Glass Corporation makes glass bottles for food and beverage makers to package their products for wholesale distribution and retail sale.Liability may be imposed on Green Glass based on

A)the "reasonableness" of the manufacturer's quality control efforts.
B)the type of the manufacturer's insurance coverage.
C)a manufacturing defect.
D)the opinion and testimony of non-experts.

Question 62

Country Style,Inc.,makes landscaping tools.Under the Restatement (Third)of Torts: Products Liability,Country could be liable for a warning defect if there is a foreseeable risk of harm posed by a product and

A)the omission of a warning renders the product not reasonably safe.
B)there is a reasonable alternative design.
C)there is a lack of care in making of the product.
D)there is insufficient insurance coverage.

Question 63

Delta Company makes and sells table saws,which are designed to be safe if used properly.Erin buys a Delta saw and lends it to her neighbor Frank.To reach a toolbox on a high shelf in his garage,Frank props the saw at an angle against a cabinet and climbs onto the saw.Frank loses his footing,slips off the saw,falls on the blade,and is injured.He files a product liability suit against Delta,on the ground of negligence.On what basis could Delta prevail

Question 64

Pharma Company,Quitox Corporation,and Renal,Inc.,are drug makers.Med Sales Company and National OTC,Inc.,are drug distributors.In a suit against all of these parties in which market-share liability is imposed,most likely to be liable are

A)neither the distributors nor the makers.
B)the distributors and the makers.
C)the distributors only.
D)the makers only.

Question 65

Horizon Corporation makes cell phones.Ginvera files a product liability suit against Horizon,alleging a design defect.Under the Restatement (Third)of Torts: Products Liability,in deciding whether to hold Horizon liable,the court may consider the "reasonableness" of

A)the manufacturer's intentions.
B)the seller's method of accounting.
C)the manufacturer's quality control efforts.
D)an available alternative design.

Question 66

Welding Systems,Inc.(WSI),makes welding torches,masks,and related products.A WSI product may be unreasonably dangerous due to

A)a defect in its design.
B)the expectations of its seller.
C)the intentions of its distributor.
D)the method of accounting of its maker.

Question 67

The brakes on a Central & Coastal Railroad train malfunction and it rolls towards maintenance workers on the tracks.Everyone gets out of the way except Dick,who wants to show off.The train hits Dick,who sues EZ Hydraulics,Inc.,the brakes' manufacturer.EZ can raise the defense of

A)a component-part manufacturer.
B)assumption of risk.
C)consumer expectations.
D)product misuse.

Question 68

Toyoda Company buys gas pedals and other parts from subcontractors and puts them in its vehicles without changing their composition.If the pedals or other parts are defective,strictly liable for any damage caused by the defects are

A)neither Toyoda nor the subcontractors.
B)Toyoda and the subcontractors.
C)the subcontractors only.
D)Toyoda only.

Question 69

Dwayne,an electrician,files a suit against Electro Mechanix,Inc.,alleging that its circuit breakers are unreasonably dangerous due to the possibility of electrical shock.Dwayne's suit is most likely to

A)fail,because Dwayne assumes the risk if he uses an Electro product.
B)fail,because Dwayne is a knowledgeable user.
C)succeed,because the danger is open and obvious.
D)succeed,because Electro's products are not safe for all uses.

Question 70

Tune Products,Inc.,offers to sell to Unlimited Sales Company one hundred MP3 players at $50 a piece,subject to certain specific delivery dates.Unlimited replies with a signed purchase order that reads,"Accept your offer for 100 I-appliances at $50 each.Must be delivered to our warehouse." Tune does not respond or deliver the goods.Unlimited files a suit for breach of contract,to which Tune answers that there is no contract because Unlimited's purchase order contained additional terms and is not signed by Tune.Can Unlimited recover Explain.

Question 71

Cold Stuf,Inc.,makes snowboards,which it sells to Deep Freeze Sports Store (DFS).DFS sells Cold Stuf boards to consumers,including Ed.Ed is injured while using the board.In a product liability suit based on strict liability,Ed may recover from

A)Cold Stuf only.
B)Cold Stuf or DFS.
C)DFS only.
D)no one.

Question 72

Furious Toyz Corporation makes skateboards,which it sells to consumers,including Gitana.Gitana is injured due to a defect in the board that causes an accident in which Haley,a bystander,is also injured.In a product liability suit based on strict product liability,Furious Toyz may be liable to

A)Gitana and Haley.
B)Gitana only.
C)Haley only.
D)no one.