Deck 20: Warranties and Product Liability

Question 1

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

Answer 1

A
Explanation: The common test for merchantability is whether the goods are fit for the ordinary purpose for which such goods are used. Some of the other tests of merchantability for all sales contracts are: the goods conform to any promises or statements of fact made on the container or label, goods are adequately packaged and labeled, goods are of the same kind, quality, and quantity within each unit, and the goods conform closely enough to the description in the contract to be acceptable to others in the trade or business.

Question 2

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

Answer 2

False

Question 3

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 certain responsibilities on the seller for the quality of the goods sold.

Answer 3

D
Explanation: Implied warranties establish certain responsibilities on the seller for the quality, character, and suitability of the goods sold. This is particularly true where the seller is a merchant dealing in goods of that kind. Implied warranties imposed by law are not absolute. They arise only under certain circumstances, and the seller may include a clause in the contract that excludes them.

Question 4

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

Question 5

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

Question 6

Fungible goods are:

A) goods which are packaged and labeled separately (such as units which come in cartons or cases).
B) mixed goods that 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 prone to contamination.
D) goods which conform to any promises or statements of fact made on the container or label.

Question 7

The creation of an express warranty depends on the:

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

Question 8

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

Question 9

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

Question 10

When a seller uses descriptive terms and the buyer takes them into consideration when making the purchase,the seller has expressly warranted that the goods she delivers will meet that description.

Question 11

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

Question 12

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

Question 13

A statement made by a seller 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 buyer and seller.
C) whether the contract contains a disclaimer.
D) the type of goods or services dealt with.

Question 14

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

Question 15

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.

Question 16

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

Question 17

Under the Magnuson-Moss Warranty Act and the Federal Trade Commission (FTC)regulations,the seller is not required to give a written warranty.

Question 18

Under the Uniform Commercial Code,the implied warranty of merchantability applies to the sale of food or drink.

Question 19

Implied warranties imposed by law are absolute.

Question 20

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

Question 21

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

A) Industrywide liability
B) Vicarious liability
C) Negligence
D) Product misuse

Question 22

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) the warrantor is required to fulfill the warranty terms if the problem was caused by damage to the product through unreasonable use.

Question 23

Which of the following is true of strict liability?

A) Courts never hold the retailer liable if the manufacturer is available for suit.
B) The application of strict liability varies among states.
C) Most states hold that plaintiffs can recover for purely economic losses under strict liability.
D) The essential element for strict product liability is that the product is not defective.

Question 24

In 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 25

Which of the following statements is true of privity of contract?

A) In the past, a person was not required to be in privity of contract to enforce the contract.
B) In the past, courts allowed an injured purchaser to recover directly from the manufacturer of the goods.
C) In most cases, the manufacturer does not have control over the condition of the product when it reaches the buyer's hands and should not be held liable for any defects in it.
D) In most states, the buyer is permitted to sue both the retailer and the manufacturer in the same suit.

Question 26

Which of the following statements is true of the Federal Trade Commission (FTC)?

A) It applies to all sellers of a "consumer product" that costs less than $5.
B) It requires a seller of consumer goods to give a written warranty, either full or limited.
C) It enforces the disclosure provisions of the warranty act and regulations.
D) It does not permit consumers to sue the maker for failure to fulfill the terms of the warranty.

Question 27

Who among the following are held liable for negligence for failing to inspect and for misrepresenting the character of goods or their fitness for a particular purpose?

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

Question 28

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) the manufacturer's duty of care does not extend to all persons who might foreseeably be injured.
D) obviousness of the danger is not a factor that is considered in determining liability.

Question 29

The _____ protects the buyer in ownership of the goods bought.

A) implied warranty of title
B) implied warranty of merchantability
C) implied warranty of fitness
D) implied warranty of description

Question 30

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

A) It requires the seller to make the written warranty terms available to the prospective buyer before the sale.
B) It does not allow consumers to sue the maker of the warranty for failure to fulfill its terms.
C) It enforces the seller's obligation to make the terms available only after the sale.
D) It permits consumers to sue the manufacturer if the manufacturer offers the warranty, but not the retailer even if the retailer grants the warranty.

Question 31

Priety,a manufacturer of chairs,sold 150 chairs to Shilpa,the owner of a furniture shop.This sale was made after both the parties entered into a contract.The term of the contract read,"Seller hereby disclaims all implied warranties." Unlike the rest of the contract,this term was written in all capital letters and placed prominently in the document.In this scenario,Priety has effectively made a disclaimer of:

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

Question 32

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 33

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

Question 34

Natalie injured herself while trimming the sides of her hedge with her electric lawn mower.In this case,Natalie:

A) cannot recover under strict liability because she misused the electric lawn mower.
B) can recover under 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 under strict liability because the lawn mower was by itself dangerous.
D) can sue all market manufacturers of electric lawn mowers for dangerous product designs.

Question 35

An express warranty is created when a seller:

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

Question 36

Which of the following requirements must be satisfied by the sellers according to the Magnuson-Moss Warranty Act and the Federal Trade Commission (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 from 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 37

The Magnuson-Moss Warranty Act is intended to:

A) provide maximum warranty protection for consumers.
B) increase consumer understanding of warranties.
C) protect all sellers of a "consumer product" that costs less than $5.
D) assert on the importance of giving a written warranty to consumers.

Question 38

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 39

The basic rule of _____ is that a person owes a duty of care to avoid foreseeable injury to others.

A) negligence
B) Magnuson-Moss Act
C) breach of warranty
D) strict liability

Question 40

Which of the following statements is true of the obvious danger rule in the context of product liability?

A) Traditionally, middlemen had a duty to warn customers of obvious dangers.
B) It has to be implemented more frequently in order to be effective.
C) A manufacturer need not issue a warning even after learning that the product is dangerous.
D) It holds that the unmistakable presence of danger is a factor in determining liability.

Question 41

Under the theory of industry wide 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 plaintiff identify a likely manufacturer.
C) withhold liability among the firms in that industry that could have produced the product.
D) prohibit further manufacturing of the product.

Question 42

Syeda bought a thermos bottle from Pentagon Corp.When using it for the first time,she poured coffee into it and was adding some warm milk when it exploded,sending shards of glass into her face and injuring her right eye.Syeda testified that she had not dropped the thermos and had not abused it.She sued Pentagon,claiming,among other things,breach of warranty of merchantability.Under the Uniform Commercial Code,was the warranty of merchantability breached?

Question 43

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.In this scenario,was the manufacturer of the sedan negligent for failing to warn,or failing to include a release mechanism in its design of the car?

Question 44

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

Question 45

A consumer who misuses a product:

A) can hold the manufacturer liable even if the manufacturer uses a defense of strict product liability by knowingly assuming an obvious risk of injury by the consumer.
B) may not recover under the theory of strict liability.
C) will recover under the theory of strict liability if the misuse was not foreseeable.
D) cannot hold the manufacturer liable for not designing the product so that it could not be altered even if the danger it created was foreseeable.

Question 46

Which of the following is true of a statute of repose?

A) It 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) The 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 47

A few state courts have declared their state's statute of repose unconstitutional because it:

A) gives people time from the date they discover their injury in which to bring their suit.
B) refrains people to bring a suit who are injured by products such as asbestos or DES that cause injury immediately.
C) denies people the right to seek redress for their injuries when they had no chance to discover their injuries within the statutory period.
D) does not bar the bringing of a tort-based product liability suit after a certain number of years from the date the product is first sold to a user.

Question 48

Salman,a high-school senior,bit into a chicken bone in a chicken burger in his high-school cafeteria.He had difficulty in breathing,and with some effort,expelled a small bone from his throat.He hurt his esophagus and had to be hospitalized for a few days.Salman 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 Salman?

Question 49

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

Question 50

A manufacturer who is sued on the basis of industry wide liability may try to defend on the grounds that:

A) it manufactured the product that caused the injury to the plaintiff.
B) it manufactured the product with a disclaimer.
C) the risks from its product were lower than those from other manufacturers.
D) the market share of its product was more than alleged by the plaintiff.