Q&A Hero

Q: John buys a machine for $10,000 under a contract that excludes consequential damages and limits the buyer's remedies to repair and replacement of defective parts. John later discovers that the machine is not working properly. Under these circumstances if the remedy of limitation is enforceable, then, to what extent will John be successful? A. John can recover $10,000. B. John will have to pay an additional amount for any repairing done. C. John is entitled to any damages since he did not check the machine on purchase. D. John can only get the machined replaced or repaired by the seller.

Q: Adam decides to eat food despite knowing that it is adulterated and brags about it to Dee. Later Adam falls sick from infection. Adam sues the supplier of the said food for injury suffered by him. The defense which can be taken by the food supplier is: A. contributory negligence. B. assumption of risk. C. product misuse. D. comparative responsibility.

Q: Lazur Corp. entered into a contract with Baker Suppliers, Inc. to purchase a used word processor from Baker. Lazur was engaged in the business of selling new and used word processors to the general public. The contract required Baker to ship the goods to Lazur by common carrier pursuant to the following provision in the contract: "FOB - Baker Suppliers, Inc. loading dock." Baker also represented in the contract that the word processor had been used for only 10 hours by its previous owner. The contract included the provision that the word processor was being sold "as is" and this provision was in larger and different type style than the remainder of the contract. With regard to the contract between Lazur and Baker: A. an implied warranty of merchantability does not arise unless both Lazur and Baker are merchants. B. the "as is" provision effectively disclaims the implied warranty of title. C. no express warranties are created by the contract. D. the "as is" provision would not prevent Baker from being liable for a breach of any express warranties created by the contract.

Q: Jason sold Sally a car manufactured by ABC Corp. After driving the car for a couple hours, Sally found that the brakes did not function properly making it extremely difficult for her to control the car. When she finally reached home, she rang up Jason demanding her money back. Jason claimed that she should ideally talk with ABC Corp., who was the manufacturers. According to Jason, he was simply selling the car. Which of the following defenses is Jason using to save himself? A. No-privity B. Assumption of risk C. Contributory negligence D. Disclaimer

Q: Which of the following is used by sellers to eliminate any kind of liability that may be claimed by an injured buyer? A. Warranty B. Disclaimer C. Warning D. Advertisement

Q: A(n) _____ is a clause attempting to block recovery of certain damages. A. promissory estoppel B. condition subsequent C. implied warranty D. remedy limitation

Q: Sellers of goods sometimes attempt to disclaim (avoid) their liability under warranties. Which type of warranty disclaimers must be written in order to be effective? A. Disclaimers of industrywide liabilities. B. Disclaimers of the warranty of fitness for a particular purpose. C. Disclaimers of the warranty of the Magnuson-Moss Act. D. Disclaimers of the warranty of strict liability.

Q: A seller's ability to disclaim implied warranties is sometimes restricted by the doctrine of: A. unconscionability. B. remedy limitation. C. no-privity. D. commercial impracticability.

Q: Bob, an attorney, purchased licensed software from Bill Able Inc. to prepare his clients' invoices online. The shrinkwrap packaging for the program disks and the software manuals contained a limitations of remedies clause which limited the buyer's remedies to the $50.00 purchase price of the software. Bob later discovered that his invoices for the past year were too low due to a malfunction in the software, costing him over $10,000 in lost revenue. Bob sues Bill Able Inc. for breach of warranty. What is the likely result? A. Bob wins because he has equal bargaining power with Bill Able, Inc. B. Bob wins because such shrinkwrap limitations of remedies clauses are generally unenforceable. C. Bob loses because the court will likely view the limitations of remedies clause as conscionable and enforceable. D. Bob loses because the disclaimer is effective.

Q: Which of the following factors is most important in determining whether a manufacturer is strictly liable in tort for a defective product? A. The negligence of the manufacturer. B. The contributory negligence of the plaintiff. C. Modifications to the product by the wholesaler. D. Whether the product caused injuries.

Q: Several firms within an industry are involved in manufacturing a harmful product. It is impossible to prove which firm produced the product and caused injury. Identify the type of liability that would arise in these circumstances. A. Industrywide Liability B. Strict Liability C. No-privity determination D. Breach of expresses warranty

Q: What is the usual UCC time limitation for claiming express and implied warranty after the sale of a product? A. 12 months B. 2 years C. 4 years D. 5 years

Q: Which damages are especially awarded by the court to punish the defendant? A. Punitive B. Compensatory C. Monetary D. Liquidated

Q: Which of the following is an example of noneconomic damages from a contract case? A. Money loss from non-performance of one party B. Money loss from loss of professional time spent associated with contract C. Emotional harm D. Loss of future commerce that was budgeted for one party

Q: Which of the following is most important for imposing strict liability? A. Unavoidable circumstances B. Unreasonably unsafe C. Unreasonable expensive D. Unavoidably protected

Q: Under the product liability theory of recovery known as strict liability, which parties may be held liable? (Answer using the majority rule used in most States.) A. The manufacturer only, engaged in the business of making that product. B. Any seller who is a nonmerchant. C. The wholesaler only, engaged in the business of selling that product. D. The buyer of the product.

Q: Under the product liability theory of strict liability as expressed in the Restatement (Second) of Torts, what is an essential fact that must be present if strict liability may be used in a lawsuit as the basis for recovery? A. The product must be unreasonably dangerous. B. The product must be un-merchantable. C. The product must be unfit for the purpose intended by the buyer. D. The product must be unfit for any purpose.

Q: Which of the following would be most suitable to be tried under comment k of section 402A of the Restatements (Second) of Torts? A. Cases related to development of medicines B. Cases of manufacturing defect C. Cases of design defect D. Cases of failure-to-warn

Q: In order to establish a cause of action based upon strict liability in tort for personal injuries resulting from the use of a defective product, the plaintiff must start the case by proving that the seller (defendant): A. was engaged in the business of selling the product. B. failed to exercise due care. C. defectively designed the product. D. was in privity of contract with the plaintiff.

Q: In the case of a product where the risks are open and obvious, many courts hold that: A. buyers must register a complaint with the seller. B. strict liability must be applied. C. the case will be covered under section 402A. D. there is no duty to warn.

Q: What form of negligence involves the duty of a manufacturer to build a safe product? A. Negligent design B. Negligent hiring C. Negligent battery D. Incorporation

Q: Which of the following characterizes cases filed under section 402A? A. The seller must be engaged in selling the product that allegedly caused harm. B. The product may not be in a defective condition but must have caused injury. C. The seller must prove that suitable modifications were made to the product in order to avoid liability. D. All cases except design-defect ones may be covered under this section.

Q: Which of the following distinguishes the Restatement (Third) from section 402A? A. It covers design defects. B. It covers manufacturing defects. C. It does not require that the product be unreasonably dangerous. D. It covers sellers engaged in selling the product that harmed the plaintiff.

Q: Joe is going on a "survival hike" in the desert. He goes to a sporting goods store, describes the hike, and asks the salesman to select suitable hiking boots for him. The boots the salesman suggests are well made and are appropriate for normal hiking, but are not suitable for Joe's planned ordeal. Relying on the salesman's selection, Joe buys the boots. After he suffers personal injury because the boots prove inadequate for the survival hike, Joe sues the store. Joe can recover under: A. the implied warranty of merchantability. B. the implied warranty of fitness. C. both the implied warranty of fitness and the implied warranty of merchantability. D. Joe cannot sue for breach because it was his responsibility to select the boots.

Q: According to UCC 2-315's _____ for a particular purpose arises when the seller has reason to know a particular purpose for which the buyer requires the goods. A. express warranty B. warranty of merchantability C. implied warranty of fitness D. multiple express warranties

Q: What section of the UCC grants a warranty for fitness for particular purpose? A. 2-315 B. 2-102 C. 3-115 D. 7-104

Q: Which of the following doctrines often proves helpful to plaintiffs who bring a product liability lawsuit alleging negligence? A. Res judicata B. Res ipsa loquitur C. Caveat venditor D. Caveat emptor

Q: A(n) _____ is created by operation of law rather than the seller's express statements. A. endorsement B. advertisement C. express warranty D. implied warranty

Q: Which of the following statements characterizes an implied warranty of fitness? A. It is covered under UCC section 402A. B. The seller relies on the buyer's skill or judgment in making a purchase. C. Any seller, merchant or nonmerchant may make this implied warranty. D. It has the same tests as those for implied warranty of merchantability.

Q: The implied warranty of fitness for a particular purpose is violated when the goods are: A. unfit for any use. B. unfit for the ordinary use for which such goods are used. C. unfit for the particular use that the buyer intends. D. unfit for the particular use that the buyer intends, and the buyer is a merchant.

Q: Palmer goes to a truck dealership and asks for a truck capable of handling a 5000-pound load. He makes it clear that it is up to the salesman to select an appropriate truck. Without saying anything about the truck's load-carrying capacity, the salesman selects a certain truck for Palmer. Relying on the salesman's choice, Palmer buys the truck in question. However, the truck can only handle a 2500-pound load. Palmer wants to sue the dealership because he didn't get the truck he desired. Which of the following product liability theories gives Palmer his best chance of recovery? A. Express warranty B. Implied warranty of fitness C. Implied warranty of merchantability D. Section 402A

Q: Statements made in an advertisement are what kind of warranty? A. Express B. Implied C. Corporate D. Fiduciary

Q: Ahmed, a lawyer, sold his car to Carlos. Has an implied warranty of merchantability been created by this transaction? A. Yes, because a car is "goods" and the Uniform Commercial Code applies to contracts for the sale of goods. B. Yes, because if the car is defective Carlos will have a right to return in to Ahmed. C. No, because Ahmed is not a merchant. D. No, Ahmed has not implied so either orally or in written.

Q: Goods that are not "merchantable" are: A. unfit for any use. B. unfit for the ordinary use for which such goods are used. C. unfit for the particular use that the buyer intends. D. unfit for the particular use that the buyer intends, and the buyer is a merchant.

Q: The most important requirement of goods regarding their merchantability is that they must: A. be fit for the ordinary purposes for which they are used. B. be passed without objection in the trade. C. be adequately contained, packaged, and labeled. D. conform to any promises or statements of fact made on the label.

Q: The Elle Corporation manufactures fingernail polish. Suzy buys a container of Elle's fingernail polish, applies it to her nails, and suffers a severe allergic reaction. She sues Elle under the implied warranty of merchantability. The test for determining whether Suzy will recover is whether: A. the nail polish she bought was suitable for the needs of the average consumer. B. the nail polish she bought properly performed its function of coloring one's nails. C. such a reaction in an appreciable number of consumers was reasonably foreseeable. D. the ingredient causing the reaction was foreign to the nail polish, or natural to it.

Q: Which of the following factors will be most important in determining if an express warranty has been created? A. Whether the statements made by the seller were in writing. B. Whether the seller intended to create a warranty. C. Whether the promises became part of the basis of the bargain. D. Whether the sale was made by a merchant in the regular course of business.

Q: Which of the following factors will be most important in determining whether an express warranty has been created concerning goods sold? A. The seller's description of the goods formed the basis of the bargain. B. The buyer or seller is a merchant with respect to the goods being sold. C. The seller intended to create the express warranty. D. The buyer relied on the seller's statements.

Q: In order to recover for breach of an express warranty, a plaintiff must show that: A. the warranty was part of the basis of the bargain. B. the seller gave a sample or model of the goods. C. the warranty was in writing. D. the warranty used the words "warrant" or "guarantee."

Q: What does the term "caveat emptor" mean? A. Let the seller beware B. Let the buyer beware C. Taking of the body D. Justice for all

Q: The preemption defense rests on a federal supremacy premisethe notion that federal law overrides state law when the two conflict or when state law stands in the way of the objectives underlying federal law.

Q: The 20th century product liability law is best characterized by the phrase: A. res ipsa loquitur. B. caveat venditor. C. caveat emptor. D. laissez-faire.

Q: Which of the following is an express or implied promise about the nature of the product sold? A. Warranty B. Caveat C. Advertisement D. License

Q: Joe buys some watermelon seeds from a seed manufacturer's catalog. The catalog describes the seed Joe buys as "top quality." Joe strongly relies upon this statement in making the purchase. The seed turns out to be worthless, and Joe sues the manufacturer for breach of express warranty. You are the attorney representing the manufacturer. Which of the following is your best argument for escaping liability? A. That a catalog statement cannot create an express warranty. B. That the basis-of-the-bargain requirement was not met. C. That the alleged warranty was merely sales talk. D. That the manufacturer did not give a sample or a model of the seeds.

Q: A disclaimer of the implied warranty of merchantability must be in writing to be enforceable.

Q: A remedy limitation is more likely to be declared unconscionable in consumer cases involving personal injury.

Q: The increasing use of comparative principles in product liability cases is due to the popularity of the three traditional defenses used in product liability cases.

Q: A disclaimer of the implied warranty of merchantability can be oral.

Q: If a seller gives a written warranty for a product to a consumer, the warranty must be designated in the nature of full or limited warranty.

Q: Basis-of-the-bargain damages are almost always successfully awarded in tort cases.

Q: Punitive damages are awarded to compensate for the losses a person has suffered.

Q: Emotional loss, pain, and suffering are examples of noneconomic damages.

Q: A disclaimer is a clause attempting to block recovery of certain damages.

Q: Mr. Green purchases a treadmill from Mr. Brown. Mr. Green tells Mr. Brown that he is purchasing the treadmill to jog and sprint. The treadmill that Mr. Green purchases does not allow for speeds faster than walking. Mr. Green should be able to recover his purchase money or receive a different machine based on the UCC warrant for specific purpose.

Q: Manufacturers who fail to inspect their products before being shipped can be guilty of negligence.

Q: When determining whether a manufacturer was negligent in adopting a particular design, courts frequently supplement the above factors with an analysis known as the utilitarian test.

Q: Strict liability was first promulgated in the Restatement (Second) of Torts in section 402A.

Q: Tony enters into a contract with Joseph to supply his entire output of guava of each season from his orchid at the then current market price. The guava is to be used by Joseph for making jams. However, the contract didn't contain any clause as to when it can be terminated. Tony gave a one year notice period to Joseph prior to termination of the contract. Joseph intentionally didn't do any arrangements for himself to acquire guavas from elsewhere. When Tony expressed his inability to supply Joseph the Guava's after one year, Joseph sued Tony for breach of contract. Whether or not the approach of Joseph is justified?

Q: A music store lets Laura take a guitar home with her so that Laura might test how it plays. After playing the guitar for a day, Laura puts it on a sofa and forgets about it. Two weeks later, the guitar is damaged due to fire. Who must bear the risk of loss for the damage to the guitar?

Q: Press Publishers sold 100 copies of a new hardback book entitled Business Law to Boardwalk Books. The contract between Press Publishing and Boardwalk Books provides, in relevant part, that Boardwalk may return to Press any unused copies of the book within six months. During the six-month period, Boardwalk sold only five copies of these books. However, twenty copies were damaged from sitting on the bookshelf for six months and having customers rip pages and spill coffee on them. Boardwalk wants to return all ninety-five copies to Press. Discuss.

Q: What is the UCC approach to the risk of loss of goods during transportation?

Q: What section of the UCC addresses Sale or Return contracts and Sale on Approval contracts? A. 2-201 B. 2-305 C. 2-326 D. 2-405

Q: Isaac contracts to sell Boyd all of his requirements of coal. In the past, Boyd has required between 1000 and 1500 tons of coal per year, but the contract contains no estimate of Boyd's needs. In 1998, Boyd's needs increase dramatically, and it demands 10,000 tons of coal from Isaac. Is Isaac obligated to sell Boyd this amount?

Q: Pulse Corp. maintained a warehouse where it stored its manufactured goods. Pulse received an order from Star. Shortly after Pulse identified the goods to be shipped to Star and before moving them to the loading dock, a fire destroyed the warehouse and its contents. With respect to the goods, which of the following statements is correct? A. Pulse has title but no insurable interest. B. Star has title and an insurable interest. C. Pulse has title and an insurable interest. D. Star has title but no insurable interest.

Q: Cey Corp. entered into a contract to sell parts to Deck, Ltd. The contract provided that the goods would be shipped "FOB Cey's warehouse." Cey shipped parts different from those specified in the contract. Deck rejected the parts. A few hours after Deck informed Cey that the parts were rejected, they were destroyed by fire in Deck's warehouse. Cey believed that the parts were conforming to the contract. Which of the following statements is correct? A. Regardless of whether the parts were conforming, Deck will bear the loss because the contract was a shipment contract. B. If the parts were nonconforming, Deck had the right to reject them, but the risk of loss remains with Deck until Cey takes possession of the parts. C. If the parts were conforming, risk of loss does not pass to Deck until a reasonable period of time after they are delivered to Deck. D. If the parts were nonconforming, Cey will bear the risk of loss, even though the contract was a shipment contract.

Q: For which of the following sale contracts does title and risk of loss remain with the seller until the buyer accepts the goods? A. A sale on approval B. A sale or return C. A bulk sale D. A sale "FAS [point of origin]"

Q: In a _____ contract, the goods are delivered to the buyer primarily for resale with the understanding that the buyer has the right to return them. A. sales B. buy and sell C. sale or return D. supply of goods

Q: In a _____ contract, the goods are delivered to the buyer primarily for the buyer's use. A. delivery B. sale on approval C. sale or return D. supply of goods

Q: Which of the following factors is most important in deciding who bears the risk of loss between merchants when goods are destroyed during shipment? A. The agreement of the parties. B. Whether the goods are perishable. C. Who has title at the time of the loss. D. The terms of applicable insurance policies.

Q: If goods have been delivered to a buyer pursuant to a sale or return contract, the: A. buyer may use the goods but not resell them. B. seller is liable for the expenses incurred by the buyer in returning the goods to the seller. C. title to the goods remains with the seller. D. risk of loss for the goods passed to the buyer.

Q: Which of the following is most important in determining who bears the risk of loss in a sale of goods contract? A. The shipping terms. B. The agreement of the parties. C. One who has title to the goods. D. One who has possession of the goods.

Q: The Benson Bearing Company sells Textron, Inc. a quantity of baseball bats that were stored in an independent warehouse at the time of the sale. The contract says that Textron is to pick up the bats at the warehouse. The risk of loss passes to Textron: A. at the time of the contract. B. at the time it receives a negotiable warehouse receipt for the bats. C. at the time it pays for the bats. D. at the time it picks up the bats.

Q: Goods are being sold by Anne in Seattle and shipped by ABC Railroad to Brian in Portland, Oregon. In this situation, the term "FOB Seattle" means that the risk of loss passes from the seller to the buyer when: A. the goods are identified in Seattle. B. the goods are placed at the seller's warehouse loading dock in Seattle. C. the goods are delivered to ABC Railroad in Seattle. D. the goods leave the city limits of Seattle.

Q: Which of the following terms in a contract for the sale of goods requires the seller to insure the goods? A. FOB B. FAS C. CIF D. C & F

Q: Stone, a merchant seller in Seattle, contracted with Rose, a merchant buyer in Rochester, for the sale of goods to be shipped by truck. The terms of the contract were "F.O.B. Seattle." Stone delivered the goods to the carrier. After leaving Seattle, the truck containing the goods was never seen again. Stone has demanded payment for the goods, and Rose has refused. If Stone sues, the outcome will be: A. Rose will win because Rose did not receive the goods. B. Rose will win because under the UCC this was a shipment contract. C. Stone will win because Stone was not at fault in causing the loss. D. Stone will win because under the UCC this was a shipment contract.

Q: The only difference between C & F and CIF shipping contracts is: A. C & F shipping contracts do not require the seller to insure the goods B. CIF shipping contracts do not require the seller to insure the goods C. CIF shipping contracts do not include the cost of shipping D. C & F shipping contracts do not include the cost of shipping

Q: The common law placed the risk of loss on _____ at the time of the loss. A. the party which was the seller B. the party which was the buyer C. the party that had technical title D. the party which was the carrier

Q: An exception to the general rule on buyer receiving better title than seller is that if goods are entrusted to a merchant who deals in goods of that kind, the merchant has: A. the power to keep rights to the goods, even if the goods are sold to a buyer. B. the power to transfer all rights of the entruster to a buyer in the ordinary course of business. C. no power to sell the goods without the physical presence of the entruster. D. the power to deprive the entruster from any benefit so caused by the transaction.

Q: Maple Interiors, located in Boston, contracted to sell and ship sofas to Peach Furniture, located in Atlanta. The contract stated that the goods were to be shipped "F.O.B. Boston, via XYZ railroad." Maple delivered the sofas to XYZ railroad. They were shipped from Boston but never seen again. Both Peach and Maple had assumed that the other party had the risk of loss, so neither had obtained insurance. Who must bear this loss? A. Peach must bear the loss because the risk passed to it after the sofas were placed on the loading dock at Maple's warehouse. B. Peach must bear the loss because the risk passed to it after the sofas were delivered to XYZ railroad. C. Maple must bear the loss because the goods were never tendered to Peach. D. Maple must bear the loss because in any sale by a merchant, risk does not pass until the actual delivery of the goods to the buyer.

Q: Sean goes to Pinnacle Corp., convinces the store manager that he is their loyal online customer Ryan and purchases a DVD credited to Ryan's account. He then sells the DVD to Jason for a higher price. When Ryan finds out, he wants the DVD back from Jason. Which of the following is true of the case? A. Ryan is the good faith purchaser in this deal. B. Pinnacle can get the DVD from Jason. C. Sean has voidable title to the DVD. D. Jason needs to pay Sean as well as Pinnacle.