21: Warranties and Product Liabilitiy

A sales representative at Oxtren, Inc. orally told the purchasing agent at Wety, Inc. that its industrial saw will cut through metal up to 5 inches thick. Wety purchased the saw. Which statement is correct concerning the claim that the saw can cut through metal up to five inches thick? a. The claim is an express warranty. b. The claim is an implied warranty of merchantability. c. The claim is not a warranty because it is not in writing. d. The claim is not a warranty because it is sales puffery.

A

Alice's Aspirin Inc., produces and packages aspirin for sale to retail stores. Bob buys a bottle of Alice's aspirin at Dahl's Food Stores. Two days later Bob's friend, Hank, takes two aspirin while at Bob's house. Within minutes, Hank is very ill and is rushed to the hospital, where it is found that a defect in the aspirin caused the reaction. Which of the following is correct? a. Hank can sue both Alice's Aspirin Inc. and Dahl's under tort theories because he is an injured party due to the defective product. b. Hank cannot sue anyone because he assumed the risk of taking the aspirin. c. Hank cannot sue anyone because he is not in privity with Dahl's or Alice's. d. Hank can sue but will not be able to recover consequential damages for his medical expenses.

A

Bill is injured while standing on the corner of Hollyhock and Vine when Mia's new Hog speeds out of control because of a defective part. In most jurisdictions, Bill: a. can sue the motorcycle manufacturer even though he was only a bystander. b. cannot sue the motorcycle manufacturer because his injuries are personal injuries as opposed to economic loss. c. cannot sue the motorcycle manufacturer because the lemon laws require arbitration. d. cannot sue the motorcycle manufacturer because there is no privity of contract.

A

In a breach of warranty case, the buyer must: a. notify the seller of defects within a reasonable time. b. bring any lawsuit no later than three years after the defect was discovered. c. extend the statute of limitations in writing rather than orally if they choose to allow a longer time for bringing suit. d. notify the seller of defects within six months of their discovery or they cannot bring a lawsuit.

A

Lemon laws, which assist consumers who have purchased automobiles that turn out to be "lemons,": a. are enacted by state legislatures. b. are enacted by Congress. c. are included in the warranty provisions of the UCC. d. have been preempted by the Magnuson-Moss Warranty Act.

A

Tu-thumbs buys a used paint sprayer from the local paint store. The sprayer had a large sign on it which said "AS IS." The dealer made no promises or statements concerning the performance of the paint sprayer. When Tu-thumbs attempts to spray paint his house, the trigger on the sprayer sticks in the "on" position and before Tu-thumbs can pull the electrical cord to cut the power, paint is sprayed all over the neighbor's house and prize Borzoi dog that is scheduled to be shown in a dog show the next day. Tu-thumbs sues the dealership. Who wins? a. Dealer wins; there were no express warranties and all implied warranties have been successfully disclaimed. b. Tu-thumbs wins; he can recover on the basis of express warranties. c. Tu-thumbs wins; he can recover on the basis of the implied warranty of merchantability because the word "merchantability" was not used in the disclaimer. d. Tu-thumbs win; he can recover on the basis of either express or implied warranties.

A

Which one of the following warranties arises in a sale of goods? a. Implied warranty of title. b. Warranty against adverse possession. c. Implied warranty of quiet enjoyment. d. All of the above arise in a sale of goods.

A

Which of the following statements could create an express warranty? a. "This is the best car available in town." b. "This motorcycle will double in value in the next ten years." c. "These tires have 10,000 miles on them." d. "This antique is quite a bargain."

C

Which of the following warranties provides that the goods will be fit for the ordinary purposes for which they are used? a. Infringement. b. Fitness for a particular purpose. c. Merchantability. d. Title.

C

Bugs R Us, an organic gardening merchant, sells and delivers 100 units of live lady bugs to eat the bad bugs on the buyer's award-winning vegetables. The buyer ordered the lady bugs without consultation with Bugs R Us for suggestions. Although the buyer correctly knew that lady bugs were the appropriate bugs for eating bad bugs on vegetables, when the lady bugs were delivered, they refused to eat the bad bugs. The merchant has breached which warranty? a. Implied breach of fitness for a particular purpose. b. Implied breach of merchantability. c. Implied warranty of title. d. Implied warranty against infringement.

B

Daddy buys an electric car for his 10-year-old son. Daddy follows the directions for assembly carefully, but the son gets an injuring shock when he sits in the car. If Daddy and son sue the manufacturer for negligence, they will: a. be successful only if they can prove that the car manufacturer knew of the defect and failed to correct it. b. be successful only if they can prove that the car manufacturer failed to use reasonable care in designing, manufacturing, or warning the purchasers about intended uses and foreseeable misuses. c. lose, because the son has no privity of contract and therefore no standing to sue. d. not be successful if the car was sold "AS IS."

B

Ned sold his refrigerator to his next door neighbor, Ian. Ned fails to tell Ian he has not finished paying for the refrigerator and Neighborhood Bank has a lien on it. a. Ned has breached the warranty against infringement. b. Ned has breached the warranty of title. c. Ned has breached the warranty of merchantability. d. Ned has not breached any warranties because he did not guarantee that the refrigerator was free and clear of security liens.

B

Under which of the following warranties must the seller be a merchant? a. Express warranties. b. Implied warranty of merchantability. c. Implied warranty of fitness for a particular purpose. d. Both b and c.

B

Which of the following would be a breach of the implied warranty of merchantability? a. A knife that cuts its user when slicing a bagel. b. A radio that does not pick up FM signals. c. A match that burns a spot in the carpet when accidentally dropped. d. A watch that does not keep accurate time after getting wet.

B

Van is using his wrench as a hammer when the wrench breaks and a piece flies off, injuring his neighbor who is helping Van change a tire on Van's car. If Van sues the tool manufacturer, its best defense will be: a. consent. b. warranties have been disclaimed. c. product misuse. d. that the claim is an economic loss only.

C

Crytrin Manufacturing, Inc. contracted with Molfrey, Inc. to manufacture three large pieces of equipment. The contract contained a clause stating that Crytrin agreed to repair or replace any defective equipment, but that was the only remedy Molfry would have. This clause: a. is an effective disclaimer. b. will not keep Molfry from obtaining consequential damages since, under the UCC, consequential damages cannot be excluded. c. is a limitation of remedy clause, which limits or excludes normal remedies permitted under the Code. d. limits any express warranties made by Crytrin.

C

In order to disclaim a warranty of fitness for a particular purpose, a merchant: a. need do nothing; such a warranty will not exist unless the merchant intends to create the warranty. b. must make the disclaimer orally and directly to the buyer. c. may disclaim the warranty with any language that is clear and conspicuous. d. None of the above. Implied warranties cannot be disclaimed.

C

M & E sold a lathe "AS IS" to Brenna. M & E has disclaimed: a. strict liability. b. liability for negligence. c. all implied warranties. d. all of the above.

C

A merchant seller who would like to exclude the warranty of merchantability can do so by doing which of the following? a. The merchant can sell the goods "As Is." b. The merchant can sell the goods "With All Faults." c. The merchant can write conspicuously that the warranty of MERCHANTABILITY is excluded. d. All of the above.

D

A sales representative at Oxtren, Inc orally told the purchasing agent at Wety, Inc. that its industrial saw is exceptional. Which statement is correct concerning the claim that the saw is exceptional? a. The claim is an express warranty. b. The claim is an implied warranty of merchantability. c. The claim is not a warranty because it is not in writing. d. The claim is not a warranty because it is sales puffery.

D

An express warranty can be created by which of the following? a. An affirmation of fact or promise. b. A description. c. A model. d. All of the above.

D

Mason bought a rotisserie in preparation for a party he was planning. When he put a chicken on the rotisserie, it would not rotate, but stayed in one position where it burned the chicken on one side and left it raw on the other. When he returned the rotisserie to the store, the salesperson disclaimed any responsibility because he had never told Mason the rotisserie would rotate the food as it cooked. Does Mason have any recourse? a. No, the salesperson did not make any express warranties. b. Yes, the salesperson made an express warranty just by selling the goods. c. Yes, although the salesperson did not make any express warranties, the UCC imposes an express warranty on the sale. d. Yes, although the salesperson did not make any express warranties, the UCC imposes an implied warranty of merchantability under which the rotisserie is guaranteed to be fit for the ordinary purposes for which it is used.

D

The statute of limitations for breach of warranty under the UCC is? a. one year. b. two years. c. three years. d. four years.

D

When Angelena was shopping for a new lawn mower, the salesman, Mark, told her the model she was interested in cuts an 18" swath and the only maintenance it needs is an oil change and a new sparkplug at the beginning of each mowing season. He hands her a warranty booklet which describes that model as a mulching mower and says it has a five-year full warranty. The booklet also disclaims "any warranties or statements made by any agent or salesperson or that appear elsewhere in this booklet." The effect of the written disclaimer is: a. that it is valid to disclaim only the written warranties within the booklet. b. that it is valid to disclaim both oral and written warranties. c. it does not disclaim either the oral or written warranties. d. that it disclaims the oral warranties, but not the written warranties.

D

Which of the following is not guaranteed under an implied warranty? a. The goods are free of hidden security interests or liens. b. The goods are not subject to a rightful claim by a third party. c. The goods are merchantable. d. The goods may be returned for a refund or replaced in the event of any defect.

D

Even though a car has an obvious dent in the rear quarter panel, the salesperson tells a potential customer, "This car has never been in an accident." The salesperson's statement creates an express warranty.

F

Express warranties must be in writing.

F

Myrtle walks into Hank's Hardware Store and says, "I need metal storage shelves that can hold 500 pounds." Hank directs her to a metal storage shelving system. Myrtle buys the shelving recommended by Hank. When Myrtle puts 475 pounds of weight on the bottom shelf, it breaks. Hank's Hardware breached the warranty of merchantability.

F

Strict liability is based on contract law.

F

The Magnuson-Moss Warranty Act requires sellers to give written warranties.

F

The economic loss doctrine states that, when the injured party is a corporation and the harm is purely economic, the only remedies available are those under the Magnuson-Moss Warranty Act.

F

Under the UCC, no warranty of title arises unless the contract is in writing.

F

A product liability case may be brought in warranty, negligence, or strict liability, but it must have the element that a person or business has been hurt by goods.

T

A statute of repose places an absolute limit on when a lawsuit may be filed regardless of when the defect is discovered.

T

A tag attached to a tree in a nursery identifying the tree as a Southern Magnolia creates an express warranty.

T

Generally, the parties to a contract may limit or alter the damages recoverable for a breach of warranty, as long as their actions are not unconscionable.

T

In a tort case, the statute of limitations runs from the time the defect was discovered.

T

Many states prohibit a seller from disclaiming implied warranties in the sale of consumer goods.

T

Mark, a power tool salesman, promises Jill, a customer, that the Turbo Power Hedge Trimmer 1000 will easily cut through bamboo up to 3 inches thick. Mark's statement constitutes an express warranty if Jill purchases the hedge trimmer.

T

To find an express warranty, not all courts require proof that the buyer relied on the seller's statement.

T