Q&A Hero

Q: ValuRich Tools, Inc., sells tools, tool parts, and related supplies under "full" warranties. Under the Magnuson-Moss Warranty Act, this means that ValuRich must provide A.a choice between a refund or replacement if a product cannot be fixed and repair or replacement of defective parts. B.neither a choice of a refund or replacement, or repair of defective parts. C.only a choice of a refund or replacement if a product cannot be fixed. D.only repair or replacement of defective parts.

Q: Mountain Bikes, Inc. (MBI), and Nero enter into a contract for a sale of a mountain bike. MBI, 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 attempts 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.

Q: Musical, Inc., sells fifty MP3 players to Noise Stores, Inc. To avoid liability for most implied warranties, in some states Musical 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.

Q: Electric Autos, Inc., sells cars to consumers. To avoid liability for oral express warranties, each 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.

Q: Sweet Candy, Inc., and Tasty Treats Stores enter into a contract for a sale of candy. Sweet, 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.

Q: Imported Carpets Store and Jill enter into a contract for a sale of an Oriental rug. Imported Carpets, 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.

Q: Regional Lumber Company and Superior Builders Corporation enter into a contract for a sale of wood products. Regional, a merchant who deals in goods of the kind sold, 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.

Q: Neil goes to Oil Shop to change the oil in his car. Perry, the service technician, learns that Neil plans to take a trip and advises the use of a certain type of oil. The oil breaks down during the trip, damaging the car. Neil may recover from Oil Shop for breach of A.an express warranty. B.an implied warranty of fitness for a particular purpose. C.an implied warranty of merchantability. D.a warranty of title.

Q: Oceanic Vessels, Inc., and Pacific Harbor Company enter into a contract for a sale of a boat. Oceanic 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 Oceanic did not know about and could not have discovered the defect. B.only if Oceanic did not know about the defect. C.only if Oceanic knew about or could have discovered the defect. D.regardless of what Oceanic knew or could have discovered.

Q: Dependable Appliances, Inc., and Elain enter into a contract for a sale of kitchen appliances. Dependable, 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.

Q: Fact Pattern 15-1 Bret, a representative of Concrete Products, Inc. assures Dependable Construction Company (DCC) that Concrete's cement will not crack within a certain range of temperatures. DCC uses the product. When cracks develop within the stated temperature range, DCC files a suit against Concrete. Refer to Fact Pattern 15-1. Suppose that the court rules against Concrete. The manufacturer might have avoided that result by A.making its cement fit for its particular purpose. B.making its cement merchantable for its intended use. C.not allowing Bret to express an opinion. D.not permitting Bret to make an express warranty.

Q: Fact Pattern 15-1 Bret, a representative of Concrete Products, Inc. assures Dependable Construction Company (DCC) that Concrete's cement will not crack within a certain range of temperatures. DCC uses the product. When cracks develop within the stated temperature range, DCC files a suit against Concrete. Refer to Fact Pattern 15-1. The court is most likely to rule in favor of A.Concrete, because Bret's statement was an expression of opinion. B.Concrete, because DCC chose Concrete's product voluntarily. C.DCC, because Bret's statement was an express warranty. D.DCC, because Concrete's product is not fit for its purpose.

Q: Good Tire Company and Hiway Auto Service enter into a contract for a sale of tires. Good Tire is a merchant who deals in goods of the kind sold. Under the UCC, an implied warranty of merchantability arises A.automatically in sales contracts. B.only if the buyer asks for it. C.only if the seller does not expressly disclaim it. D.only in conjunction with lease contracts, not sales contracts.

Q: Trucks & Trailers, Inc. (T&T), and United Delivery 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 A.automatically in lease contracts. B.only if the lessee asks for it. C.only if the lessor does not expressly disclaim it. D.only in conjunction with sales contracts, not lease contracts.

Q: Sari buys a new sport utility vehicle (SUV) from Terrific Cars & Trucks, Inc. The most important factor in determining whether an express warranty is created is whether A.Sari expresses to Terrific what she wants warranted. B.Sari's desire for the SUV becomes part of her motivation to deal. C.Terrific expresses to Sari what it expects of its customers. D.Terrific promise becomes part of the basis of the bargain.

Q: Parker, a salesperson for Quality Textiles, Inc., shows Rosa, a fabric buyer for Style Clothing Company, samples of cloth, 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.puffing.

Q: Olga, a salesperson for Pre-owned Cars & Trucks, Inc., tells Quincy, "This is the best car I've ever seen." This statement is A.an express warranty. B.an implied warranty. C.a warranty of title. D.puffing.

Q: Big Screen Video Corporation sells high-definition television sets. Under most circumstances, Big Screen Video will be presumed to have warranted that its title to the TVs 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.

Q: Merchant Supply Company and National Discount Stores enter into a contract for a lease of cash registers. Merchant assures National 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.

Q: City Car Company and Dave's Autos enter into a contract for a sale of motor vehicles. City assures Dave's that it has valid title to the vehicles. Under the UCC, a warranty of title arises 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.

Q: In many states, the plaintiff's negligence is a defense that may be raised in a product liability suit based on strict liability.

Q: Strict liability applies to the suppliers of component parts.

Q: A seller must warn those who buy a product of harm that could result from the foreseeable misuse of the product.

Q: An inadequate warning is not a product defect that will support the imposition of liability on a strict product liability basis.

Q: A design defect is not the sort of product defect that will support the imposition of liability on a strict product liability basis.

Q: A product is not so unreasonably dangerous as to support the imposition of liability in a strict product liability suit solely because a less dangerous alternative was commercially feasible but was not produced.

Q: Any product may be made entirely safe for all consumption.

Q: Only the manufacturer of a defective product can be strictly liable for an injury or damage caused by the product.

Q: To support the imposition of strict product liability, a product must be substantially changed from the time it is sold to the time an injury occurs.

Q: To succeed in a strict product liability suit, an injured plaintiff must show that a product's defect was the proximate cause of the injury.

Q: One requirement for a product liability suit based on strict liability is a failure to exercise reasonable care.

Q: A manufacturer's liability to an injured party on a strict product liability theory is limited to a refund or a replacement of the defective product.

Q: A public policy underlying the imposition of strict product liability is that consumers should be protected against unsafe products.

Q: A public policy underlying the imposition of strict product liability is that a manufacturer who makes an unsafe product should be put out of business.

Q: Privity of contract between the plaintiff and the defendant is required to bring a product liability suit based on negligence.

Q: A product liability action may be based on warranty theory.

Q: A manufacturer's duty of care does not extend to the inspection and testing of products bought to incorporate in the final product.

Q: The Magnuson-Moss Warranty Act modifies UCC warranty rules to some extent in consumer transactions.

Q: A merchant cannot disclaim an implied warranty of merchantability.

Q: An express warranty cannot be limited.

Q: Colby contracts in writing to sell his 2005 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?

Q: Signal Sets Company contracts to deliver one hundred 52-inch plasma high-definition television sets to a new retail customer, Tuner TV Store, on May 1, with payment to be made on delivery. Signal tenders delivery in its own truck. Tuner's manager notices that some of the cartons have scrape marks. Tuner's owner phones Signal's office and asks whether the sets might have been damaged as they were being loaded. Signal assures Tuner that the sets are in perfect condition. Tuner tenders Signal a check, which Signal refuses, claiming that the first delivery to new customers is always for cash. Tuner promises to pay the cash within two days. Signal leaves the sets with Tuner, which stores them in its warehouse pending its "Grand Opening Sale" on May 15. Two days later, Tuner's stocker opens some of the cartons and discovers that a number of the sets are damaged beyond ordinary repair. Signal claims Tuner has accepted the sets and is in breach by not paying on delivery. Will Signal succeed on these claims? Explain.

Q: BBQ, Inc., makes and sells grills to Grill Mart, a retailer, which sells one of the grills to Hope, a consumer. BBQ and Grill Mart include in their contracts a limitation on consequential damages for personal injuries arising from a breach of warranty. This is prima facie unconscionable with respect to A.all of these parties. B.BBQ and Grill Mart, but not Hope. C.Hope only. D.none of these parties.

Q: Natural Foods, Inc., orders "Grade A" oil from Olive Grove Farms to process and sell to Pic 'N Pay Grocers. Olive Grove ships "Grade B" oil, which Natural Foods accepts. To recover damages for the nonconformity, Natural Foods must give notice of the breach within a reasonable time to A.Olive Grove only. B.Olive Grove, Pic 'N Pay, and the appropriate government agency. C.Pic 'N Pay only. D.the appropriate government agency only.

Q: Leather Products Stores, Inc., rejects a shipment of goods that does not conform to its contract with Manufactured Cowhide Corporation, but is unable to obtain instructions from the seller. Leather Products may A.resell or return the goods only. B.resell or store the goods only. C.return or store the goods only. D.resell, return, or store the goods.

Q: Owen and Pablo enter into a contract for a sale of fifty Western saddles. Pablo pays, but Owen does not deliver. Pablo can normally recover as damages the difference between A.any loss avoided and any profit gained. B.the actual price and the hoped-for price. C.the contract price and the market price. D.the current prices in the parties' locations.

Q: Cheesy Pizza Company contracts to sell 1,000 cases of frozen pizzas to Roller Rinks, Inc., but refuses to deliver. Due to a spice shortage, Roller Rinks cannot obtain pizza elsewhere. Roller Rinks's right to recover the goods from Cheesy is the right of A.cover. B.cure. C.replevin. D.specific performance.

Q: Phil and Kelsey enter into a contract for a sale of Harmonica, a dog. Phil pays the price, but Kelsey does not deliver. Phil can use specific performance as a remedy if A.Kelsey is lawfully withholding delivery of Harmonica. B.Phil cannot effectively cure the defect. C.Harmonica is unique. D.Harmonica has not been identified to the contract.

Q: Bayou Boats, Inc., and Eventide Fishing Tours enter into a contract for a sale of seven swamp boats. Eventide pays for the goods, but Bayou does not deliver. Eventide can use replevin as a remedy if A.Bayou is lawfully withholding the goods. B.Eventide cannot effectively cure the defect. C.Eventide is unable to cover for the goods. D.the goods have not been identified to the contract.

Q: Hi-Tech Company contracts to sell fiber optic cable to Internet Services, Inc. Hi-Tech may bring an action to recover the purchase price and incidental damages if Internet A.accepts the cable and pays for it. B.accepts the cable but does not pay for it. C.rejects the cable. D.revokes acceptance of the cable.

Q: Garden Field Farms and Haute Gourmet Restaurant, Inc., enter into a contract for a sale of lettuce before Haute Gourmet declares bankruptcy. Garden Field can stop delivery of the goods in transit A.only if the quantity is at least a carload. B.only if the quantity is at least a planeload. C.only if the quantity is at least a truckload. D.regardless of the quantity.

Q: Text Publishers, Inc., contracts for a sale of textbooks to University Bookstores, Inc. Vital Shipping Corporation, the carrier, transports the books to Warehouse Storage Company. Text's right to stop delivery is lost when University's rights to the goods are acknowledged by A.the appropriate government agency only. B.Vital Shipping only. C.Vital Shipping or Warehouse Storage. D.Warehouse Storage only.

Q: Double D Ranch and Esau enter into a contract on August 1 for the sale of 200 cattle. Esau cancels the contract ten days later. Double D is unable to sell the cattle to another buyer. Double D is entitled to A.force Esau to accept the cattle and recover the contract price. B.keep the cattle and recover the contract price from Esau. C.keep the cattle only. D.recover the contract price from Esau but must destroy the cattle.

Q: Ramblin' Country Stables contracts to buy 1,000 horseshoes from Blacksmith, Inc., for $1 per shoe. When the market price decreases to 50 cents per shoe, Ramblin' refuses to go through with the deal. Blacksmith can recover A.$1,500. B.$1,000. C.$500. D.$0.

Q: Loni and Myra enter into a contract for a sale of clarinets and other wind instruments. Loni delivers, but Myra does not pay. Loni can normally recover as damages the difference between A.any loss avoided and any profit gained. B.the actual price and the hoped-for price. C.the contract price and the market price. D.the current prices in the parties' locations.

Q: On May 1, City Auto & Truck Sales agrees to sell a car to Dino. Five days later, Dino refuses delivery and cancels the contract. City is entitled to A.force Dino to accept the car. B.recover any damages from Dino but not resell the car. C.resell the car and recover any damages from Dino. D.resell the car but not recover any damages from Dino.

Q: Regal Manufacturing Company contracts to sell sweaters to Superb Styles Store. Before the sweaters are delivered, Superb indicates that it will not be able to pay. Regal can resell the goods A.either after finishing the job (and identifying the goods), or after stopping the job. B.only after finishing the job and identifying the goods. C.only if Regal immediately stops the job. D.under no circumstances.

Q: Relax Chair Company contracts to deliver 100 chairs to Stuffy Furnishings Store on May 1 for which Stuffy agrees to pay. Relax tells Stuffy on April 15 that delivery will be delayed until June 1. Stuffy may A.await performance, sue Relax, or suspend its own performance. B.only await Relax's performance for a commercially reasonable time. C.only sue Relax for breach of contract. D.only suspend its own performance.

Q: Sid and Tony enter a contract for a sale of Sid's collection of electric guitars. Before the time for performance, Sid tells Tony that he does not want to deliver the guitars. Anticipatory repudiation is A.a breach of contract. B.a compromise between two parties who are unable to perform. C.a remedy available only to a breaching party. D.a remedy available only to a nonbreaching party.

Q: Fact Pattern 14-1 Internet Cafes, Inc., contracts to buy all of its requirements for coffee, at a minimum of 1 million pounds per year, from Java Corporation for six years. After three years, Internet tells Java that it plans to sell its company to Kwik Eateries, Inc. Kwik refuses to assure Java that it will continue Internet's contract. Refer to Fact Pattern 14-1. Java can A.assign its rights under the contract but cannot terminate it. B.do nothing. C.suspend performance under the contract until Java is fully paid. D.terminate the contract and seek damages.

Q: Fact Pattern 14-1 Internet Cafes, Inc., contracts to buy all of its requirements for coffee, at a minimum of 1 million pounds per year, from Java Corporation for six years. After three years, Internet tells Java that it plans to sell its company to Kwik Eateries, Inc. Kwik refuses to assure Java that it will continue Internet's contract. Refer to Fact Pattern 14-1. Kwik's refusal constitutes A.a justified response based on Kwik's relation to the contract. B.an assignment of Internet's rights under the contract. C.a reasonable suspension of performance under the contract. D.a repudiation of the contract.

Q: Craft Engineering, Inc., contracts for a sale of technical instruments to Detail Design Company. Before the date on which performance is due, Craft notifies Detail that it will not perform. This is A.anticipatory repudiation. B.perfect tender. C.rejection of performance. D.revocation of acceptance.

Q: Summit Supply Company contracts for a sale of medical equipment to Valley Immediate Care Corporation. Summit can enforce its right to payment A.only after Valley has actually inspected the goods. B.only after Valley has had an opportunity to inspect the goods. C.only before Valley has inspected the goods. D.whether or not Valley has had the chance to inspect the goods.

Q: Citrus Groves contracts with four food companies to sell its entire crop of oranges. When half of the crop is lost to an unexpected insect infestation, Citrus must A.apportion its surviving crop fairly among its customers. B.breach some of its contracts. C.buy elsewhere as many oranges as needed to satisfy its contracts. D.substitute other fruit for the oranges.

Q: Mineral Resource Company contracts to provide several manufacturers with tin. When a cartel of tin-producing countries suddenly embargoes future shipments of tin to Mineral Resource so that it cannot fulfill its contracts, the distributor A.can substitute some other material for the tin. B.is excused from the performance of its contracts. C.is liable for breach of contract. D.must still supply the tin needs of its customers.

Q: According to the court in Case 14.1, Maple Farms, Inc. v. City School District of Elmira, the defense of commercial impracticability will not excuse the performance of a contractual obligation when there is an increase in the seller's costs while the contract is in force A.unless the increase in the seller's costs is substantial. B.under any circumstances. C.unless the increase in the seller's costs makes it impossible for the seller to perform without losing money. D.unless the increase in the seller's costs was not foreseeable at the time the contract was formed.

Q: Pep Paints agrees to sell to Quality Painters Grade A-1 latex outdoor paint to be delivered May 8. On May 7, Pep tenders Grade B-2 paint. Quality rejects the Grade B-2 paint. Two days later, Pep tenders Grade C-3 paint with an offer of a price allowance. Pep has A.additional, unlimited time to cure. B.a reasonable, additional time to cure. C.one more day to cure. D.no more time to cure.

Q: Food Packaging, Inc., agrees to sell 50,000 6-ounce yogurt containers to Golden Dairy Company. Food can obtain only 20,000 of the 6-ounce containers, but also ships 30,000 more expensive 8-ounce containers for the same price. Under these circumstances, Golden A.cannot reject delivery, and Food cannot later replace the containers. B.cannot reject delivery, but Food can later replace the containers. C.may reject delivery, and notice to Golden of Food's intent to cure will give Food a reasonable time to replace the containers. D.may reject delivery, but Food cannot later replace the containers.

Q: Timber Mills Corporation and Ur-Choice Lumberyards enter into a contract for a sale of plywood. Under a destination contract, the seller must A.allow the buyer to reject the goods for any reason. B.deliver the goods to a particular destination. C.inspect the goods before tendering their delivery. D.place the goods into the hands of a carrier.

Q: Vehicle Leasing Agency (VLA) and Wander Trucking Company enter into a contract for a lease of eight cargo vans. VLA delivers eight vans, but they are not cargo-sized. Wander A.cannot reject the entire shipment. B.can reject the entire shipment. C.must accept the entire shipment. D.must reject the entire shipment.

Q: Genuine Seed Company and Hillside Farmers Cooperative enter into a contract for a sale of hybrid seeds. Under the perfect tender rule, Genuine Seed must ship or tender seeds to Hillside that A.approximately conform to all of the details of the contract. B.entirely conform to the contract except in one or two details. C.exactly conform to the contract in every detail. D.substantially conform to the contract in most details.

Q: Primo Pools Company and Aquatic Recreation, Inc., enter into a contract for a sale of prefabricated swimming pools. Under either a shipment contract or a destination contract, the seller must A.allow the buyer to reject the goods for any reason. B.deliver the goods to a particular destination. C.place the goods into the hands of a carrier. D.provide the buyer with any necessary documents of title.

Q: Screen Perfect, Inc., and TV Stores enter into a contract for a sale of high-definition television sets. Screen Perfect ships goods that do not exactly conform to the contract in some details. TV Stores A.cannot reject the entire shipment. B.can reject the entire shipment. C.must accept the entire shipment. D.must reject the entire shipment.

Q: Business Rental Corporation (BRC) and Cartage Trucking Company enter into a contract for a lease of ten hydraulic lifts. Under the perfect tender rule, BRC must ship or tender goods to the lessee that A.approximately conform to all of the details of the contract. B.entirely conform to the contract except in one or two details. C.exactly conform to the contract in every detail. D.substantially conform to the contract in most details.

Q: Elegant Carpets, Inc., and Fantastic Floors Stores enter into a contract for a sale of carpeting. Under a shipment contract, the seller must A.allow the buyer to reject the goods for any reason. B.deliver the goods to a particular destination. C.inspect the goods before shipping them. D.place the goods into the hands of a carrier.

Q: Clear Day Company, which is based in Delaware, agrees to sell fifty windows, currently stored in Florida, to Great Vu, Inc., which is based in Hawaii. Absent an agreement to the contrary, the place of delivery is in A.California. B.Delaware. C.Florida. D.Hawaii.

Q: International Gem Corporation agrees to sell Jewel Outlets, Inc. (JOI), fifty new diamonds, but the contract does not specify a place of delivery. JOI is expected to pick up the goods. The place of delivery is A.International's place of business. B.JOI's place of business. C.the Annual Gems and Jewels Convention. D.the U.S. Postal Service office nearest to JOI's place of business.

Q: If the parties to a sales contract state that a certain remedy is exclusive, then it is the sole remedy.

Q: A buyer who accepts nonconforming goods cannot revoke the acceptance.

Q: A buyer may reject a seller's goods under any circumstances.