Question 1

Trucks & Trailers,Inc.(T&T),and United Express Service enter into a contract for a lease of trucks.T&T is a merchant who deals in goods of the kind leased.Under the UCC,an implied warranty of merchantability arises

Accepted Answer

The implied warranty of merchantability arises automatically under the UCC when a merchant leases goods of the kind it deals in. Therefore, option A is the correct answer. Option B, C, and D are incorrect because they do not reflect the correct legal position under the UCC.

Question 2

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

Accepted Answer

This is a breach of the implied warranty of merchantability, as the skis were not fit for their ordinary purpose (skiing) and broke while being used in a normal manner. The implied duty of inspection would only apply if Ski Shop had reason to believe that there was a defect in the skis, which is not the case here. An express warranty would be if Ski Shop provided a specific guarantee about the skis, which is also not the case here.

Question 3

Eliza buys a new motorcycle from Fast Bikes,Inc.The most important factor in determining whether an express warranty is created is whether

Accepted Answer

An express warranty is created when the seller's promise becomes part of the basis of the bargain. If Fast Bikes makes a promise about the motorcycle and that promise is a significant factor in Eliza's decision to purchase the motorcycle, then an express warranty is created.

Question 4

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

Accepted Answer

According to the UCC, an implied warranty of fitness of a particular purpose arises if the seller is a merchant who deals in goods of the kind sold and knows the buyer is relying on the seller's skill or judgment to select suitable goods for a particular purpose. Therefore, option C is the best choice as it satisfies both conditions.

Question 5

Home Redo,Inc. ,and Ivy enter into a contract for a sale of cabinets and countertops.Home Redo,a merchant who deals in goods of the kind sold,notes that its goods come with an implied warranty of merchantability.Under the UCC,this means that the goods are reasonably

Accepted Answer

The implied warranty of merchantability under the UCC means that the goods are fit for the ordinary purpose for which such goods are used. Option A refers to the implied warranty of fitness for a particular purpose, which can be created if the seller has reason to know of the buyer's particular purpose and the buyer relies on the seller's expertise in recommending the goods. Option C refers to the requirement of goods being able to be sold at an acceptable price, which is not related to the concept of merchantability. Option D is not a requirement for fulfilling the implied warranty of merchantability.

Question 6

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.

Accepted Answer

The answer of Tune Products,Inc. ,offers to sell to Unlimited...

Question 7

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

Accepted Answer

The answer of Cruisin' Autos,Inc. ,sells cars to consumers.To avoid...

Question 8

Coal Mine Company buys an excavator from Dig Equipment Inc.Coal Mine is unaware that Equity Credit Company holds a lien against the excavator.If Equity repossesses the goods,Coal Mine can recover for breach of warranty from

Accepted Answer

Dig Equipment Inc. sold the excavator to Coal Mine Company, and therefore breached the warranty of title by not disclosing the fact that the equipment was subject to a lien held by Equity Credit Company. This makes Dig Equipment Inc. liable to Coal Mine Company for breach of warranty. However, since Equity Credit Company holds the lien, it has the right to repossess the goods. Coal Mine Company can recover from Dig Equipment Inc. for the breach of warranty of title, but cannot recover from Equity Credit Company, as it has only exercised its legal right to repossess the goods.

Question 9

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

Accepted Answer

The phrase "as is" indicates that the buyer is accepting the product in its current condition, without any guarantees or warranties from the seller. By stating that the trombones are sold "as is," Brass Instruments, Inc. would avoid liability for most implied warranties.

Question 10

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

Accepted Answer

The answer of Pipe Company includes in its contracts a...

Question 11

Colby contracts in writing to sell his Dodge-brand pick-up truck to Efrem for $10,500.Colby agrees to deliver the truck on Friday,and Efrem promises to pay the $10,500 on the following Monday.On Thursday,Efrem tells Colby that he changed his mind and will not buy the truck.Over the weekend,Efrem changes his mind again and tenders $10,500 to Colby on Monday.Colby has not sold the truck to another party but refuses the tender and refuses to deliver.Efrem claims that Colby has breached their contract.Colby contends that Efrem's repudiation released him from his duty to perform under the contract.Who is correct,and why?

Accepted Answer

The answer of Colby contracts in writing to sell his...

Question 12

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

Accepted Answer

This is an express warranty, as Blake is explicitly stating that the purchased equipment will match the display. Express warranties are guarantees that are made explicitly by the seller or manufacturer.

Quiz 12: Sales and Lease Law

Trucks & Trailers,Inc.(T&T) ,and United Express Service enter into a contract for a lease of trucks.T&T is a merchant who deals in goods of the kind leased.Under the UCC,an implied warranty of merchantability arises