Business Law: Text & Cases, Chapter 23
Vehicle Wholesale Company and Walt’s Retail Motors enter into a contract for a sale of used cars. Vehicle Wholesale assures Walt’s that it has valid title to the vehicles. Under the UCC, warranties of title arise
a. automatically in most sales contracts.
b. only if the buyer asks for such a warranty.
c. only if the seller expresses such a warranty.
d. only in conjunction with lease contracts, not sales contracts.
a. automatically in most sales contracts.
Store Outfitters Company and Towncraft retail stores enter into a contract for a lease of cash registers. Store Outfitters assures Towncraft that it has valid title to the goods. Under the UCC, a warranty of title arises
a. automatically in most lease contracts.
b. only if the lessee asks for such a warranty.
c. only if the lessor expresses such a warranty.
d. only in conjunction with sales contracts, not lease contracts.
d. only in conjunction with sales contracts, not lease contracts.
Greg, a salesperson for Home Improvement Center, tells Irena, “This is the best floor sander I’ve ever seen.” This statement is
a. an express warranty.
b. an implied warranty.
c. a warranty of title.
d. puffery.
d. puffery.
Phoenix, a salesperson for Quality Fruit, Inc., shows Robert, a buyer for Sweet Home Fruit Company, samples of peaches, stating that any shipment will match the samples. This statement is
a. an express warranty.
b. an implied warranty.
c. a warranty of title.
d. puffery.
a. an express warranty.
Global Talk Corporation sells phones and other mobile devices. Under most circumstances, Global Talk will be presumed to have warranted that its title to the goods is
a. the same as each brand’s name.
b. none of the choices—a warranty of title is not presumed.
c. good and valid.
d. the best that money can buy.
c. good and valid.
Wheels Inc. sells bicycles. Under most circumstances, Wheels will be presumed to have warranted that its title to the bikes is
a. the same as each brand’s name.
b. none of the choices—a warranty of title is not presumed.
c. good and valid.
d. the best that money can buy.
c. good and valid.
Arnold buys a backhoe from Big Dig Equipment Inc. Arnold is unaware that Credit Collection Company holds a lien against the backhoe when he buys it. If Credit Collection repossesses the backhoe, Arnold can
a. recover from Big Dig for breach of warranty.
b. do nothing.
c. file criminal charges against Big Dig and Credit Collection.
d. recover damages from Credit Collection for breach of warranty.
a. recover from Big Dig for breach of warranty.
Eliza buys a new motorcycle from Fab Cycles, Inc. The most important factor in determining whether an express warranty is created is whether
a. Eliza expresses to Fab Cycles what she wants warranted.
b. Eliza’s desire for the cycle becomes part of her motivation to deal.
c. Fab Cycles expresses to Eliza what it expects of its customers.
d. Fab Cycles’s promise becomes part of the basis of the bargain.
d. Fab Cycles’s promise becomes part of the basis of the bargain.
MotorCo Inc. makes and sells auto parts to retail repair services, vehicle sales outlets, and consumer parts stores. On one MotorCo box is a label that reads “Contains one gross (144) sparkplugs, assorted sizes.” This statement is
a. an implied warranty of fitness for a particular purpose.
b. an implied warranty of merchantability.
c. an express warranty.
d. none of the choices.
c. an express warranty.
Quade is an expert in twentieth-century art. Rachel visits Quade’s gallery, seeking to buy artwork as an investment. Quade shows her a painting that in his opinion is by Picasso. Quade’s statement is
a. an express warranty.
b. an implied warranty.
c. a warranty of title.
d. puffery.
a. an express warranty.
Home Remodelers, Inc., and Imogen enter into a contract for a sale of cabinets and countertops. Home Remodelers, 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
a. fit for the buyer’s particular purpose.
b. fit for the ordinary purpose for which such goods are used.
c. suitable for resale at an acceptable price.
d. the best quality that money can buy.
b. fit for the ordinary purpose for which such goods are used.
Trucks & Trailers, Inc. (T&T), and United Express Service enter into a contract for a lease of vehicles. T&T is a merchant who deals in goods of the kind leased. Under the UCC, an implied warranty of merchantability arises
a. automatically in most contracts for a lease of goods.
b. only if the lessee asks for it.
c. only if the lessor expresses such a warranty.
d. only in conjunction with sales, not lease, contracts.
a. automatically in most contracts for a lease of goods.
Replay Sports Stores and SportsPower Products, Inc., enter into a contract for a sale of trampolines. SportsPower Products is a merchant who deals in goods of the kind sold. Under the UCC, an implied warranty of merchantability arises
a. automatically in most contracts for a sale of goods.
b. only if the buyer asks for such a warranty.
c. only if the seller expresses such a warranty.
d. only in conjunction with lease contracts, not sales contracts.
a. automatically in most contracts for a sale of goods.
Beginners Run Ski Shop sells a pair of skis to Crystal. When Crystal first uses the skis, they snap in two. The cause is something that Beginners Run did not know about and could not have discovered. Beginners Run breached
a. the merchant’s implied duty of inspection.
b. the implied warranty of merchantability.
c. no duty or warranty because Beginners Run knew nothing about the defect that made the goods unsafe.
d. no duty or warranty because consumers should reasonably expect to occasionally find a product that does not work as warranted.
b. the implied warranty of merchantability.
Chord Guitars Inc. sells guitars to consumers. A Chord salesperson says to a potential customer, “This Chord is the best guitar you’ll find anywhere.” This statement is
a. an implied warranty of fitness for a particular purpose.
b. an implied warranty of merchantability.
c. an express warranty.
d. puffery.
d. puffery.
Kanye goes to a Lawn & Yard store to tune up his mower. Marty, the service technician, learns that Kanye’s lawn is overgrown and rocky, and advises the use of a certain type of oil, plug, filter, and blade. Later, the mower breaks down due to the use of the items recommended by Marty. Kanye may recover from Lawn & Garden for breach of
a. an express warranty.
b. an implied warranty of fitness for a particular purpose.
c. an implied warranty of merchantability.
d. none of the choices.
b. an implied warranty of fitness for a particular purpose.
Fred buys running shoes from Gear Store, telling the clerk that he wants the shoes to compete in High Pace Triathlon. The shoes break apart during the competition, causing Fred to fall and sustain an injury. The seller most likely breached
a. an express warranty.
b. an implied warranty of fitness for a particular purpose.
c. an implied warranty of merchantability.
d. none of the choices.
b. an implied warranty of fitness for a particular purpose.
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
a. if the buyer is relying on the seller to select suitable goods.
b. if the buyer asks for it.
c. if the seller is a merchant who deals in goods of the kind sold.
d. in conjunction with lease contracts, not sales contracts.
c. if the seller is a merchant who deals in goods of the kind sold.
Construction Products Company and Dante enter into a contract for a sale of bricks and stones. Construction Products knows the purpose for which Dante will use the goods. Under the UCC, an implied warranty of fitness of a particular purpose arises
a. if the buyer is relying on the seller to select suitable goods.
b. if the buyer asks for it.
c. if the seller is a merchant who deals in goods of the kind sold.
d. in conjunction with lease contracts, not sales contracts.
a. if the buyer is relying on the seller to select suitable goods.
Drive-Away Autos, Inc., sells cars to consumers. To avoid liability for oral express warranties, each Drive-Away sales agreement should note that a car is sold
a. as is.
b. in perfect condition.
c. subject to warranties included in the written contract only.
d. with no known defects.
c. subject to warranties included in the written contract only.
Water 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
a. the implied warranty of fitness for a particular purpose.
b. the implied warranty of merchantability.
c. the implied warranty of title.
d. none of the choices.
a. the implied warranty of fitness for a particular purpose.
Band Instruments, Inc., sells seventy-six trombones to Community & School Band Source, Inc. To avoid liability for most implied warranties, Band Instruments should state in writing that the trombones are sold
a. as is.
b. by a merchant.
c. in perfect condition.
d. with no known defects.
a. as is.
Lighter Than Air, Inc., and Mario enter into a contract for a sale of a hang glider. Lighter Than Air, a merchant who deals in goods of the kind sold, makes implied and express warranties in connection with the sale. The Magnuson-Moss Warranty Act was designed to prevent deception in warranties by
a. displacing the UCC as the primary source of warranty rules.
b. making warranties easier to understand.
c. prohibiting disclaimers of warranties.
d. requiring sellers to give written warranties for consumer goods.
b. making warranties easier to understand.
HandiTools, Inc., sells power tools, power tool parts, and related supplies under “full” warranties. Under the Magnuson-Moss Warranty Act, this means that HandiTools must provide
a. free repair or replacement of any defective part.
b. a toll-free number for a HandiTools-approved service company.
c. a complete catalog of products and parts available for sale.
d. repair or replacement of any defective part at a reduced charge.
a. free repair or replacement of any defective part.
Pat’s Pet Houses, Inc. sells shelters for animals under “limited” warranties. Under the Magnuson-Moss Warranty Act, this means that the warranties on the shelters from Pat’s
a. limit the buyers’ recourse in some fashion.
b. are only good for some buyers.
c. cover only some of the shelters.
d. are oral instead of written.
a. limit the buyers’ recourse in some fashion.
Safe4U Lenses, Inc., assures ThruVu Optical Company that Safe4U’s lenses will not crack within a certain range of pressure. ThruVu buys the lenses to prescribe to its customers. When cracks develop within the stated range, ThruVu files a suit against Safe4U. The court is most likely to rule in favor of
a. Safe4U, because its statement was an expression of opinion.
b. Safe4U, because ThruVu chose Safe4U’s products voluntarily.
c. ThruVu, because Safe4U’s statement was an express warranty.
d. ThruVu, because Safe4U’s statement constituted puffery.
c. ThruVu, because Safe4U’s statement was an express warranty.
Aerospace, Inc., makes and sells flight navigation equipment, through independent salespersons, to retailers for resale to consumers. The Magnuson-Moss Warranty Act covers
a. implied warranties, oral statements, and written promises.
b. only implied warranties that consumers are aware of.
c. only a salesperson’s oral statements.
d. only a seller’s written promises.
d. only a seller’s written promises.
Ocean Vessels, Inc., and Pacific Harbor Company enter into a contract for a sale of a boat. Ocean is a merchant who deals in goods of the kind sold. The goods are defective. Under the UCC, the implied warranty of merchantability is breached
a. only if Ocean did not know of and could not have discovered the defect.
b. only if Ocean did not know of the defect.
c. only if Ocean knew about or could have discovered the defect.
d. regardless of what Ocean knew or could have discovered.
b. only if Ocean did not know of the defect.
Eden Valley Ranch and Farm Supply Corporation enter into a contract for a sale of fencing materials. Farm Supply, a merchant who deals in goods of the kind, makes implied and express warranties in connection with the sale. Under the UCC, if these are inconsistent
a. all implied warranties displace all express warranties.
b. all express warranties displace all implied warranties.
c. the implied warranty of fitness for a particular purpose takes precedence.
d. the implied warranty of merchantability takes precedence.
c. the implied warranty of fitness for a particular purpose takes precedence.
Sigrud buys spiked mountain-climbing shoes from Rockridge Gear store. Rockridge does not know that Sigrud plans to wear the shoes to climb Tower Mountain. When Sigrud is on the mountain, the spikes come out of the shoes, causing her to fall and be injured. Rockridge breached
a. an express warranty.
b. an implied warranty of fitness for a particular purpose.
c. an implied warranty of merchantability.
d. none of the choices.
a. an express warranty.
Grande Floors, Inc., and Home Decor Stores enter into a contract for a sale of carpeting. Grande Floors, a merchant who deals in goods of the kind sold, makes express warranties in connection with the sale. Under the UCC, at the time a contract is formed, an express warranty can be disclaimed or modified
a. by clear, conspicuous language called to the buyer’s attention.
b. by implied affirmations of fact relating to the goods.
c. in any way that the seller sees fit for the ordinary purpose.
d. in no way.
a. by clear, conspicuous language called to the buyer’s attention.
Banquet Furnishings, Inc., and Christina enter into a contract for a lease of tables, chairs, and items for a wedding reception. Banquet Furnishings, a merchant who deals in goods of the kind sold, generally describes the goods, details technical specifications, and shows a sample. Under the UCC, if these are inconsistent
a. the general description displaces the sample.
b. the general description displaces the technical specifications.
c. the sample takes precedence over the general description.
d. the sample takes precedence over the technical specifications.
c. the sample takes precedence over the general description.
Sugar & Spice, Inc., and Taste Treats stores enter into a contract for a sale of confections. Sugar & Spice, a merchant who deals in goods of the kind sold, makes express warranties in connection with the sale. Under the UCC, at the time a contract is formed, an express warranty can be disclaimed or modified
a. by clear, conspicuous language called to the buyer’s attention.
b. by implied affirmations of fact relating to the goods.
c. in any way that the seller sees fit for the ordinary purpose.
d. in no way.
a. by clear, conspicuous language called to the buyer’s attention.
Marcos buys a pneumatic drill from NuTools Inc. Owen leases a table saw from Piecework Tools Sales & Lease Company. Later, Marcos and Owen become aware of defects in the goods that indicate breaches of warranty. An action for breach of warranty accrues when
a. the seller or lessor tenders delivery.
b. the buyer or lessee becomes aware of the breach.
c. the nonbreaching party notifies the breaching party of the breach.
d. four years have passed since the breach occurred.
a. the seller or lessor tenders delivery.
Music, Inc., sells fifty MP3 players to Noise Stores, Inc. To avoid liability for most implied warranties, in some states Music could simply state in writing that the players are sold
a. as is.
b. by a merchant.
c. in perfect condition.
d. with no known defects.
a. as is.