Question 1

Due diligence is a defence based on adopting reasonable steps to avoid the violation of a legal duty.

Accepted Answer

This statement accurately defines the concept of due diligence. It is a legal defence that can be used if a person or company is accused of breaching a legal duty, such as a duty to ensure the safety of employees or customers. To claim due diligence, the accused must show that they took reasonable steps to prevent the breach from occurring, such as conducting appropriate training, providing safety equipment, or following relevant regulations and standards.

Question 2

A number of terms are automatically implied by the Sale of Goods Act into the contracts of parties, even though they may have expressly agreed to exclude the operation of this legislation with regard to their transaction.

Accepted Answer

The answer of A number of terms are automatically implied...

Question 3

How are promotional statements that are alleged to be either false or misleading to consumers assessed with respect to ascertaining their truth?

Accepted Answer

Promotional statements are assessed using an objective test to judge falsity. This test examines whether a reasonable person would be misled or deceived by the statement. The other options listed (A, C, D) provide regulations and guidelines for labeling and competition, but do not specifically address the assessment of false or misleading promotional statements.

Question 4

What is the term for advertising a product at a very low price when you have an insufficient supply to meet expected demand?

Accepted Answer

Bait and switch is a tactic in which a product or service is advertised at a low price with the intention of persuading customers to buy it, but when they arrive at the store, they are told that the product is out of stock, defective, or inadequate for their needs. Instead, the merchant will offer them a higher-priced alternative, which is the product they really want. This practice is considered unethical and misleading to consumers.

Question 5

False or misleading advertising involves illegal business practices that exploit the unequal bargaining position of consumers.

Accepted Answer

The answer of False or misleading advertising involves illegal business...

Question 6

The rules contained in the sale of goods legislation that determine when title to goods shifts also affect the seller's right to claim damages for non-acceptance.

Accepted Answer

The rules governing the transfer of title to goods under the sale of goods legislation also impact the seller's ability to seek damages when the buyer refuses to accept the goods. If title has not yet passed to the buyer, the seller can withhold delivery and sue for damages; however, if title has already shifted to the buyer, the seller must rely on other legal remedies to recover damages.

Question 7

The Latin phrase caveat emptor forms the foundation of common law's expectation of purchasers to be aware of what they are purchasing and to make appropriate investigations before buying.

Accepted Answer

Caveat emptor means "let the buyer beware" and is a fundamental principle in common law that places the responsibility on the purchaser to examine and assess the quality and suitability of a product or service before making a purchase. This principle is still applied in many legal systems today.

Question 8

When a condition in a sale of goods contract is breached, the sale of goods legislation permits the buyer to ask the court to reduce the purchase price due to the breach.

Accepted Answer

The answer of When a condition in a sale of...

Question 9

Unascertained goods must be identified and agreed on at the time a contract is made.

Accepted Answer

Unascertained goods are goods that are not specifically identified at the time a contract is made; they are defined or identified later, based on agreed criteria.

Question 10

Goods not yet set aside and identifiable as the subject of the contract are to be specifically ascertained at the time the contract is formed.

Accepted Answer

Goods not yet set aside and identifiable as the subject of the contract are to be specifically ascertained at the time they are shipped, marked, or otherwise designated as the goods to which the contract refers, not necessarily at the time the contract is formed.

Question 11

In a free on board contract, the seller specifies the type of transportation to be used.

Accepted Answer

In a Free On Board (FOB) contract, the seller is responsible for delivering the goods to a specified location, but it is the buyer who specifies the mode of transportation.

Question 12

Once goods are delivered to a carrier under ac.i.f. contract, the seller typically submits the bill of lading and certificate of insurance to the buyer in exchange for payment of the price of the goods.

Accepted Answer

This is consistent with the typical payment terms in an c.i.f. contract, where payment is made by the buyer upon receipt of the documents necessary to take possession of the goods.

Question 13

Unfair trade practices are considered by consumer protection legislation to involve false, misleading, and unconscionable representations made during any of the various forms of transactions for consumer products.

Accepted Answer

Unfair trade practices are indeed defined as false, misleading, and unconscionable representations made during consumer transactions and are regulated by consumer protection legislation.

Question 14

Tinsel X-Mas Trees received 200 trees from Misty Tree Farms Ltd. for sale during the holiday season. Tinsel paid a deposit of $500, and Misty granted payment terms of 30 days from the date of delivery. Should Tinsel sell all of the trees but neglect to remit payment within the 30 days, Misty will be entitled to claim an action for the price.

Accepted Answer

Misty will have the right to sue Tinsel for the price of the trees if Tinsel fails to make the payment within 30 days of delivery.

Question 15

The concept of protecting the consumer implicitly assumes that the commercial purchaser is better able to take care of itself and does not require any kind of safeguards.

Accepted Answer

The concept of consumer protection is based on the assumption that individual consumers are at a disadvantage compared to businesses in terms of information, resources, and bargaining power, and thus require safeguards that commercial purchasers, who are deemed more knowledgeable and capable, do not.

Question 16

A warranty is implied under sale of goods legislation that requires the seller to have the right to sell the goods.

Accepted Answer

The answer of A warranty is implied under sale of...

Question 17

A customer who has made its purpose for a particular product known to the seller will be deemed to have relied on the advice of the seller in selecting a product fit for that purpose.

Accepted Answer

If a customer has made clear to the seller their intended purpose for a product, then the seller is expected to provide advice or recommendations on products that are fit for that purpose. The customer is entitled to rely on the seller's expertise and advice in making their selection.

Question 18

The transfer of ownership of goods and the principles relating to delivery of the goods are among the key aspects of the contract of sale that are the focus of marketing laws.

Accepted Answer

This statement is true. The transfer of ownership and delivery of goods are important elements of a contract of sale, which is a fundamental aspect of marketing law.

Question 19

Classification of the relevant term of the contract for sale of goods is essential to determining whether the goods sold by description actually correspond with the description.

Accepted Answer

The answer of Classification of the relevant term of the...

Question 20

Which of the following should a legal risk manager insist upon with respect to advertising performance claims about a new product the company is promoting?

Accepted Answer

A legal risk manager should insist upon establishing a justification through scientific evidence for any performance claims made about a new product being promoted to avoid potential legal issues. Keeping improper practices secret or implementing a cynical marketing strategy to cover a lack of due diligence could lead to false statements and legal consequences, while retracting false statements is important but not proactive in preventing legal risks.

Quiz 23: Sales and Marketing: the Contract, Product, and Promotion