Question 1

Rienhardt Manufacturers contracts Shillingworth Mining to purchase quartz ores.Upon inspection of a particular shipment,Rienhardt discovers that most of the ores are of substantially lesser quality than the average quality standard of that grade.Shillingworth Mining has breached the ________.
A) implied warranty of merchantability
B) implied warranty of fitness for human consumption
C) statute of limitations of strict liability
D) statute of repose of strict liability

Accepted Answer

The implied warranty of merchantability is breached when goods are of substantially lesser quality than the average quality standard for that type of good. This applies to goods purchased for commercial purposes, such as the quartz ores purchased by Rienhardt from Shillingworth Mining.

Question 2

Where there has been a breach of warranty,the buyer or lessee may sue the seller or lessor to recover ________ damages.
A) compensatory
B) exemplary
C) punitive
D) incidental

Accepted Answer

When there is a breach of warranty, the buyer or lessee can only sue the seller or lessor to recover compensatory damages, which are meant to compensate the plaintiff for any losses they incurred due to the breach. Exemplary damages are a form of punitive damages generally reserved for cases of intentional or willful misconduct, and punitive damages are rarely awarded in breach of warranty cases. Incidental damages are a separate category of damages that may be awarded in addition to compensatory damages, but they are not related to the breach of warranty itself.

Question 3

Damages that are generally equal to the difference between the value of the goods as warranted and the actual value of the goods accepted at the time and place of acceptance is known as ________ damages.
A) punitive
B) liquidated
C) compensatory
D) exemplary

Accepted Answer

Compensatory damages are damages awarded to compensate the injured party for their losses as a result of a breach of contract. In this specific case, the damages would be to compensate for the difference between the warranted value of the goods and their actual value at the time and place of acceptance. Punitive damages are meant to punish the breaching party, liquidated damages are pre-determined damages set in a contract, and exemplary damages are awarded to make an example of the breaching party. None of these apply in this scenario.

Question 4

A warranty that is created when a seller or lessor makes an affirmation that the goods he or she is selling or leasing meet certain standards of quality,description,performance,or condition is known as a(n)________.
A) implied warranty
B) warranty of title
C) warranty disclaimer
D) express warranty

Accepted Answer

An express warranty is created when a seller or lessor makes an affirmation, promise, description, or sample of the goods that becomes part of the basis of the bargain, and gives rise to a warranty that the goods will conform to those standards. It is explicitly stated by the seller or lessor and can be oral or written.

Question 5

Which of the following is true of a statement of opinion?
A) It is a type of implied warranty.
B) It is a seller's commendation of goods.
C) It is a buyer's commendation of goods.
D) It is a type of express warranty.

Accepted Answer

A statement of opinion is a seller's commendation of goods, rather than a type of warranty. It is not a type of implied or express warranty and does not necessarily reflect the buyer's opinion.

Question 6

What was the doctrine of caveat emptor in sales or lease contracts?
A) It was a law that balanced risk of loss between seller and buyer.
B) It was a law that stated the risk of loss was completely on the buyer.
C) It was a law that stated the risk of loss was completely on the seller.
D) It was a law that required no risk of loss between seller and buyer.

Accepted Answer

The doctrine of caveat emptor in sales or lease contracts stated that the risk of loss was completely on the buyer. It means that the buyer should be cautious and check the quality and suitability of the product they are buying because the seller is not responsible for any defects or deficiencies in the product. This doctrine was prevalent in common law countries until the advent of consumer protection laws.

Question 7

A commendation of goods,made by a seller or lessor that does not create an express warranty is referred to as a(n)________.
A) statement of opinion
B) implied warranty
C) guarantee
D) express warranty

Accepted Answer

A commendation of goods made by a seller or lessor that does not create an express warranty is referred to as a statement of opinion, as it is not a guarantee or an implied warranty. It is simply the seller's or lessor's personal opinion about the quality or performance of the goods.

Question 8

Alan buys a toaster from a retail store where he is promised by the salesperson that the toaster will operate optimally for two years at the least.The salesman's assurance is an example of a(n)________.
A) express warranty
B) liability
C) statement of opinion
D) disclaimer

Accepted Answer

The salesperson's assurance that the toaster will operate optimally for two years is an express warranty. Express warranties are guarantees or promises, either written or spoken, made by a seller to a buyer regarding the quality, performance, or condition of a product or service.

Question 9

Sam expresses interest in buying a motorbike from Jake,a salesman.In an attempt to force a sale,Jake promises Sam that the motorbike in question is capable of providing a mileage of 70 miles for every gallon of gas in its tank.Jake's promise is an example of ________.
A) a disclaimer
B) puffing
C) an express warranty
D) slander

Accepted Answer

Jake's promise is an express warranty, which is a guarantee or assurance given by a seller to a buyer about the quality or condition of a product. It is a specific representation of fact made by the seller regarding the product, which may influence the buyer's decision to purchase it. A disclaimer is a statement that limits a seller's liability or responsibility for a product's defects or shortcomings, and is the opposite of an express warranty. Puffing refers to exaggerated or subjective claims made by a seller about a product, which are not considered legally binding. Slander is a false and damaging statement made about a person or entity, and is unrelated to the situation described in the question.

Question 10

Anthony buys an electric stove from a home appliance shop that provides him with a complete 48-month warranty.The shop guarantees that the stove will be repaired or replaced for free during this period.This is an example of a(n)________.
A) full warranty
B) limited warranty
C) implied warranty of merchantability
D) implied warranty of fitness for a particular purpose

Accepted Answer

A complete 48-month warranty is a full warranty, which guarantees free repair or replacement of the electric stove within the specified time period.

Question 11

A statement that negates express and implied warranties is known as a ________.
A) warranty disclaimer
B) limited warranty
C) strict liability
D) statement of opinion

Accepted Answer

A warranty disclaimer is a statement that denies or negates any express or implied warranties associated with a product or service. It is a common practice used by businesses to limit their liability in case of product malfunctions or failures.

Question 12

A heading printed in uppercase letters or a typeface that is larger than the rest of the body of a sales or lease contract is meeting the UCC's requirement of ________ for warranties.
A) obscurity
B) conspicuity
C) crashworthiness
D) nebulousness

Accepted Answer

The UCC requires warranties to be conspicuous, which means they must be noticeable and easily visible to the consumer. Using an all-caps heading or larger typeface helps to meet this requirement. Options A, C, and D are not relevant to the UCC's requirements for warranties.

Question 13

Andy is interested in purchasing a fridge from Tim,a salesman.In an attempt to force a sale,Tim claims that the fridge is the best of its kind in the contemporary market.Tim's claim is an example of ________.
A) a statement of opinion
B) an express warranty
C) a full warranty
D) slander

Accepted Answer

Tim's claim that the fridge is the best of its kind is subjective and cannot be easily verified. It is considered a statement of opinion rather than a factual warranty or a defamatory statement (slander).

Question 14

A(n)________ is a warranty that applies to food or drink consumed on or off the premises of restaurants,grocery stores,fast-food outlets,and vending machines.
A) statement of opinion
B) express warranty
C) explicit guarantee
D) implied warranty of fitness for human consumption

Accepted Answer

The implied warranty of fitness for human consumption is a legal warranty that applies to food or drink consumed on or off the premises of food businesses like restaurants, grocery stores, and vending machines. It guarantees that the food is safe for people to consume and free from harmful substances. It is implied because it is automatically applied by law, even if the business does not explicitly state it.

Question 15

A ________ is a seller's or lessor's express or implied assurance to a buyer or lessee that the goods sold or leased meet certain quality standards.
A) breach
B) caveat emptor
C) warranty
D) liability

Accepted Answer

A warranty is a seller's or lessor's assurance to a buyer or lessee that the goods sold or leased meet certain quality standards. A breach refers to a failure to perform a legal obligation, caveat emptor is a principle that places the responsibility for determining the condition and suitability of goods on the buyer, and liability refers to legal responsibility for one's actions or omissions.

Question 16

What of the following is true of an "as is" disclaimer?
A) It limits all implied warranties.
B) It limits all express warranties.
C) It is a type of implied warranty.
D) It is a type of express warranty.

Accepted Answer

An "as is" disclaimer is a statement indicating that a product or service is being sold without any warranty or guarantee, and that the buyer is assuming all risks associated with the purchase. It is used to limit or exclude implied warranties, meaning that the seller is not responsible for any defects or problems that may arise after the sale. It does not limit express warranties, which are explicitly stated by the seller.

Question 17

What type of transaction is covered under the Magnuson-Moss Warranty Act?
A) consumer transactions
B) commercial transactions
C) industrial transactions
D) government transactions

Accepted Answer

The Magnuson-Moss Warranty Act applies to consumer transactions, which are transactions in which the buyer is an individual who purchases goods or services primarily for personal, family, or household use. This includes transactions for items such as appliances, electronics, and vehicles. The act does not apply to commercial or industrial transactions, which involve businesses buying goods or services for their own use, or to government transactions.

Question 18

Which of the following is true of an implied warranty of merchantability?
A) It is made by the buyer or lessee.
B) It is implied by law if the seller or lessor is a nonmerchant.
C) It is implied by law if the seller or lessor is a merchant.
D) It has to be explicitly expressed in the contract.

Accepted Answer

An implied warranty of merchantability is implied by law if the seller or lessor is a merchant. It assures that the product is reasonably fit for its ordinary purpose, adequately packaged, labeled, and conforms to any promises or affirmations made on the label or container. It is not made by the buyer or lessee, and does not have to be explicitly expressed in the contract.

Question 19

Mark goes to Tony's Lumber Yard to buy some lumber to build a new roof for his cabin.Mark tells Tony,the lumber yard owner,to provide him an exact type of wood that can resist the wood decay caused due to the damp environment around the cabin.Mark buys the lumber after Tony assures him that the wood is exactly what Mark is looking for.But the dampness affects the wood and it caves in.What warranty has Tony explicitly breached by not providing Mark the lumber he needed?
A) express warranty
B) statement of opinion
C) implied warranty of fitness for human consumption
D) implied warranty of fitness for a particular purpose

Accepted Answer

Tony explicitly breached the implied warranty of fitness for a particular purpose, as Mark specifically requested the wood to resist wood decay caused by the damp environment around his cabin.

Question 20

The ________ is a federal statute,passed in 1975,that regulates written warranties on consumer products.
A) Purchaser's Act
B) Industry Loss Warranty Act
C) Magnuson-Moss Warranty Act
D) Consumer Warranty Act

Accepted Answer

The Magnuson-Moss Warranty Act is the federal statute passed in 1975 that regulates written warranties on consumer products. The other options are not correct names for this statute.

Quiz 19: Warranties and Product Liability

Rienhardt Manufacturers contracts Shillingworth Mining to purchase quartz ores.Upon inspection of a particular shipment,Rienhardt discovers that most of the ores are of substantially lesser quality than the average quality standard of that grade.Shillingworth Mining has breached the ________.

Where there has been a breach of warranty,the buyer or lessee may sue the seller or lessor to recover ________ damages.

Damages that are generally equal to the difference between the value of the goods as warranted and the actual value of the goods accepted at the time and place of acceptance is known as ________ damages.

A warranty that is created when a seller or lessor makes an affirmation that the goods he or she is selling or leasing meet certain standards of quality,description,performance,or condition is known as a(n) ________.

Which of the following is true of a statement of opinion?

What was the doctrine of caveat emptor in sales or lease contracts?

A commendation of goods,made by a seller or lessor that does not create an express warranty is referred to as a(n) ________.

Alan buys a toaster from a retail store where he is promised by the salesperson that the toaster will operate optimally for two years at the least.The salesman's assurance is an example of a(n) ________.

Sam expresses interest in buying a motorbike from Jake,a salesman.In an attempt to force a sale,Jake promises Sam that the motorbike in question is capable of providing a mileage of 70 miles for every gallon of gas in its tank.Jake's promise is an example of ________.

Anthony buys an electric stove from a home appliance shop that provides him with a complete 48-month warranty.The shop guarantees that the stove will be repaired or replaced for free during this period.This is an example of a(n) ________.

A statement that negates express and implied warranties is known as a ________.

A heading printed in uppercase letters or a typeface that is larger than the rest of the body of a sales or lease contract is meeting the UCC's requirement of ________ for warranties.

Andy is interested in purchasing a fridge from Tim,a salesman.In an attempt to force a sale,Tim claims that the fridge is the best of its kind in the contemporary market.Tim's claim is an example of ________.

A(n) ________ is a warranty that applies to food or drink consumed on or off the premises of restaurants,grocery stores,fast-food outlets,and vending machines.

A ________ is a seller's or lessor's express or implied assurance to a buyer or lessee that the goods sold or leased meet certain quality standards.

What of the following is true of an "as is" disclaimer?

What type of transaction is covered under the Magnuson-Moss Warranty Act?

Which of the following is true of an implied warranty of merchantability?

The ________ is a federal statute,passed in 1975,that regulates written warranties on consumer products.