Question 1

The FTC can issue an order to halt a comparative ad if information used in the ad is inaccurate.

Accepted Answer

The FTC (Federal Trade Commission) can issue an order to stop a comparative ad if it contains inaccurate information. The FTC's primary goal is to protect consumers from misleading or deceptive advertising, and inaccurate information in ads can be considered a violation of this goal.

Question 2

If there is a breach of the warranty of merchantability, there is no tort liability.

Accepted Answer

A breach of the warranty of merchantability can result in both contract and tort liability.

Question 3

Product packaging stating that the line is "ideal for use on boat or dock" is mere puffery and not an express
warranty.

Accepted Answer

Puffery is a general claim made by the seller about the product, which cannot be quantified or proved. It is not a statement of fact, and hence cannot be considered an express warranty. Therefore, the statement "ideal for use on boat or dock" is mere puffery.

Question 4

Restaurants have no liability for natural items such as bones in chicken that injure customers.

Accepted Answer

Restaurants do have a certain level of liability for natural items such as bones in chicken, as they have a duty to ensure the food they serve is reasonably safe for consumption. If a customer is injured by a bone or other natural item in their food, the restaurant may be held liable for any damages resulting from the injury. However, the specific circumstances of each case will determine the extent of the restaurant's liability.

Question 5

The implied warranty of merchantability requires:

Accepted Answer

The answer of The implied warranty of merchantability requires:
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Question 6

An internal memo in a company that acknowledges the risk of a product prior to the product's release without any kind of change establishes proof for punitive damages under a negligence theory of product liability.

Accepted Answer

The internal memo acknowledging the risk of a product, but failing to make any changes or take adequate precautions, could be used as evidence of negligence on the part of the company. This could lead to the awarding of punitive damages in a product liability lawsuit.

Question 7

The implied warranty of fitness for a particular purpose requires:

Accepted Answer

The implied warranty of fitness for a particular purpose does not specifically require any of the conditions listed in options A, B, or C. It is established when a seller knows or has reason to know the particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods.

Question 8

Passengers injured in a plane crash caused by the plane's defective design have no rights of recovery against the
airplane manufacturer.

Accepted Answer

Passengers injured in a plane crash caused by the plane's defective design may have rights of recovery against the airplane manufacturer under product liability laws.

Question 9

A salesperson who recommends a fertilizer to a customer for the customer's described purposes is not making a
warranty.

Accepted Answer

Recommending a product for a specific purpose can be considered an express warranty that the product will perform as stated.

Question 10

Under the Consumer Product Safety Improvement Act a reseller of goods cannot be liable for selling toys or other products with lead paint because the reseller did not manufacture the goods.

Accepted Answer

Under the Consumer Product Safety Improvement Act, a reseller can be held liable for selling toys or other products with lead paint, even if the reseller did not manufacture the goods. Resellers have a legal responsibility to ensure that the products they sell comply with safety standards and regulations.

Question 11

A purchase of a deep fryer at a sale of a bankrupt restaurant's equipment by the bankruptcy trustee is covered by
the warranty of merchantability.

Accepted Answer

The warranty of merchantability, which guarantees that goods are fit for the ordinary purposes for which such goods are used, typically applies to sales by merchants in the course of business. A bankruptcy trustee selling off assets of a bankrupt entity is not considered a merchant in this context, and thus, such sales are usually as-is and without warranties unless explicitly stated otherwise.

Question 12

Proof that a manufacturer was aware of a defect in its product but did not correct it is proof of negligence.

Accepted Answer

If a manufacturer was aware of a defect in its product but did not correct it, it shows that they acted negligently by not taking the necessary steps to ensure the safety and quality of their product. This can result in harm to consumers and potential legal repercussions.

Question 13

The FTC Improvements Act of 1980 curbed FTC regulation of children's advertising.

Accepted Answer

The FTC Improvements Act of 1980 limited the FTC's regulatory powers over children's advertising, specifically by prohibiting the FTC from imposing a ban or limitation on ads directed at children unless it found that the ad was "unfair and deceptive" and that no other remedy would be as effective. This curbed the FTC's ability to regulate children's advertising to some extent.

Question 14

Which is a requirement for an express warranty?

Accepted Answer

A requirement for an express warranty is a description or promise of performance. While the use of the words "warrant" or "guarantee" can indicate that a warranty exists, they alone are not enough to create one. A written statement is not always required, as warranties can also be made orally. While it is preferable for the warranty to be made by a merchant (a person or business that deals in goods of the type or description involved), it is not always necessary for the warranty to be valid.

Question 15

Which of the following is not an example of an express warranty?

Accepted Answer

This statement is a statement of opinion or puffery and does not make a specific factual representation about the product. The other statements make express warranties by making specific factual representations about the products.

Question 16

Comparative ads are now illegal.

Accepted Answer

Comparative advertising is not illegal, but it is highly regulated and companies need to ensure that their claims are truthful and can be substantiated.

Question 17

The foreign/natural test for food items is different from the liability issues under the reasonable expectation test.

Accepted Answer

The foreign/natural test is used to determine whether a food item's presence in a product would be unexpected or surprising to the consumer, while the reasonable expectation test is used to determine whether a manufacturer can be held liable for injury caused by a product that fails to meet the consumer's reasonable expectations. These are two separate tests with different purposes.

Question 18

"As is" written in a contract:

Accepted Answer

"As is" serves to disclaim both the implied warranty of merchantability and the implied warranty of fitness for a particular purpose. It means that the buyer accepts the product or service in its current condition without any guarantees or warranties from the seller.

Question 19

The implied warranty of fitness for a particular purpose requires reliance by the buyer on the seller's expertise.

Accepted Answer

The implied warranty of fitness for a particular purpose means that the seller guarantees that the product will be suitable for the specific needs of the buyer, and that the buyer is relying on the seller's expertise to provide this assurance. Therefore, it requires reliance by the buyer on the seller's expertise.

Question 20

The implied warranty of merchantability requires proof that the buyer was relying on some language when he or she made the purchase of the good.

Accepted Answer

The implied warranty of merchantability does not require proof that the buyer was relying on any language. It is automatically attached to the sale of goods by a merchant, and guarantees that the goods are fit for their intended purpose, are of a generally acceptable quality, and are properly labeled and packaged.

Quiz 14: Sales: Product Advertising and Liability