Business Law Chapter 13 Quiz

Which of the following phrases constitutes an express warranty? A)"Boned chicken" B)"Maine's finest" C)"Best in the West" D)"Most beautiful in town"

A)"Boned chicken"

Which of the following statements constitutes an express warranty? A)"These shelves hold up to 300 lbs. each." B)"This will keep your child occupied for hours." C)"This sweater is made of the finest materials." D)"This mosquito repellent is very effective."

A)"These shelves hold up to 300 lbs. each."

Which of the following is a function of the Federal Trade Commission (FTC)? A)The FTC regulates the fairness of the terms of contracts and the time for performance. B)The FTC investigates whether companies that manufacture energy drinks are accurately disclosing how much caffeine their drinks contain. C)The Federal Trade Commission decides the language to be used for warranty disclaimers.

A)The FTC regulates the fairness of the terms of contracts and the time for performance.

Pestro manufactures a herbicide that is used in the parks in Metroville. After the parks were sprayed with the herbicide, a group of children became ill and required hospitalization. Two dogs that were also in the park that day died. The parents of the children and the dog owners could: A)bring suit against Pestro under Section 402A even though there is no privity. B)not bring suit against Pestro because of a lack of privity. C)not bring suit against the city. D)only bring suit against the city.

A)bring suit against Pestro under Section 402A even though there is no privity.

The Wheeler-Lea Act: A)expanded the Federal Trade Commission's authority to regulate advertising. B)limited the Federal Trade Commission's authority to regulate only ads that affected competition. C)eliminated the Federal Trade Commission's authority to require corrective advertising.

A)expanded the Federal Trade Commission's authority to regulate advertising.

Privity of contract: A)is a direct contractual relationship between the parties in a contract. B)is required for recovery on a UCC warranty theory. C)is required for recovery under Section 402A. D)means there is no direct contractual relationship between the parties.

A)is a direct contractual relationship between the parties in a contract.

Bait and switch: A)is a sales tactic of advertising a cheaper product in order to get a customer in to buy a more expensive product. B)is legal as long as the store has the advertised product in stock. C)is not regulated by the Federal Trade Commission. D)is not illegal because the seller is not making any promises to the customer.

A)is a sales tactic of advertising a cheaper product in order to get a customer in to buy a more expensive product.

Privity in negligence product liability cases is: A)not required. B)more stringent than in Uniform Commercial Code cases. C)determined by the relationship of the injured party to the buyer. D)determined by the relationship of the injured party to the seller.

A)not required.

The implied warranty of merchantability requires: A)proof that the seller is a merchant. B)proof that the buyer relied on a merchant. C)proof of a defective product. D)proof that the buyer used the product improperly.

A)proof that the seller is a merchant.

"As is" written in a contract: A)serves to disclaim the implied warranty of merchantability. B)serves to disclaim an express warranty. C)has no effect on warranty protection. D)serves to disclaim misrepresentation.

A)serves to disclaim the implied warranty of merchantability.

Product misuse is a defense in product liability: A)unless the misuse is the result of a failure to warn. B)unless it is a negligence action. C)unless it is a warranty action. D)unless the state follows Section 402A.

A)unless the misuse is the result of a failure to warn.

The U.S. Army purchased a large number of Bell Jet Ranger helicopters in 1963. Many of the helicopters were used in tours of duty in Vietnam and were returned to the United States after the war. Because of damages sustained during the war, many of the helicopters' engines were rebuilt. In 1974, one of the helicopters with a rebuilt engine crashed because of engine failure. The families of the two servicemen killed in the accident wish to recover from Bell under Section 402A. What defense could Bell probably successfully allege? A)Misuse of the product B)Product modification C)Assumption of risk D)Negligence

B)Product modification

Which is a requirement for an express warranty? A)use of the word "warrant" or "guarantee" B)a description or promise of performance C)written statement D)must be made by a merchant

B)a description or promise of performance

The sellers of "Acne-Statin," a skin cream, claim in their ads that their cream "cures acne." The American Association of Dermatologists has determined that there is no cure for acne, only creams that can curb breakouts. The ad claims: A)constitute puffery. B)breach an express warranty. C)do not violate any FTC rules.

B)breach an express warranty.

Corrective advertising: A)is unconstitutional. B)is one of the Federal Trade Commission's remedies for unsubstantiated claims. C)has never been ordered by a court.

B)is one of the Federal Trade Commission's remedies for unsubstantiated claims.

A candle has the following label: "NEVER LEAVE A BURNING CANDLE UNATTENDED." The warning: A)is not necessary to prevent liability on the part of the maker. B)would not cover a defect in the candle's manufacture. C)is an example of a warning needed to prevent liability for negligence only.

B)would not cover a defect in the candle's manufacture.

Which of the following constitutes an express warranty? A)"This car will give you a great deal of satisfaction." B)"This car gets excellent mileage!" C)"This car goes from 0 to 60 mph in 10 seconds." D)"This car is the best in the world."

C)"This car goes from 0 to 60 mph in 10 seconds."

Which of the following is not an example of an express warranty? A)"This jacket is lined." B)"This water heater holds 50 gallons." C)"This toothpaste makes teeth the whitest around." D)"Preshrunk jeans."

C)"This toothpaste makes teeth the whitest around."

The 2008 act that includes some regulations on the resale of goods is the: A)Consumer Product Safety Act. B)Consumer Product Resale Safety Act. C)Consumer Product Safety Improvement Act. D)Consumer Product Resellers Inclusion Act.

C)Consumer Product Safety Improvement Act.

When Toyota delayed in issuing a recall for certain vehicles with suspected sudden unintended acceleration problems, Toyota faced a(n): A)legal but not ethical problem. B)ethical but not legal problem. C)ethical and legal problem. D)public relations problem but no ethical or legal problems.

C)ethical and legal problem.

The FTC controls on product comparisons: A)are very stringent. B)are a high regulatory priority. C)have changed dramatically with private enforcement. D)no longer exist.

C)have changed dramatically with private enforcement.

The opposite of caveat emptor is: A)negligence. B)privity requirements. C)strict tort liability. D)misrepresentation.

C)strict tort liability.

Which of the following phrases is an example of an express warranty? A)"Guaranteed to bring the most happiness to any home." B)"Simply the best donut you'll ever eat." C)"Brings friends running to you." D)"This hotdog is pure beef."

D)"This hotdog is pure beef."

What is the maximum civil penalty the Consumer Product Safety Commission can assess against a company for violations of the Consumer Product Safety Act? A)$2,000 B)$50,000 C)$500,000 D)$100,000

D)$100,000

Arrion McClellan was using an underarm aerosol deodorant one morning while smoking a cigarette. The deodorant had this warning in large letters on the side of the can: "DO NOT USE AROUND HEAT, FLAME, OR WHILE SMOKING." The deodorant ignited the cigarette in Arrion's hand and the flames quickly spread to her silk robe. McClellan was severely burned and will have permanent scarring. Who is liable for her injuries? A)The deodorant manufacturer B)The cigarette manufacturer C)The manufacturer of her silk robe D)Arrion McClellan

D)Arrion McClellan

Which of the following is not regulated by the FTC? A)content accuracy B)celebrity endorsements C)performance claims D)express warranties

D)express warranties

Contributory negligence: A)can be a partial defense in product liability cases for negligence. B)is the same as comparative negligence. C)is no longer permitted as evidence in suits. D)is a complete defense in product liability cases for negligence.

D)is a complete defense in product liability cases for negligence.

Negligence product liability cases: A)are the same as Section 402A cases. B)have no defenses. C)require proof of privity. D)require that the manufacturer knew of the defect but sold the product anyway.

D)require that the manufacturer knew of the defect but sold the product anyway.

"With all faults" serves to disclaim: A)an express warranty. B)liability under Section 402A. C)liability for negligence. D)the implied warranty of merchantability.

D)the implied warranty of merchantability.

"This car has the finest workmanship money can buy" is an example of an express warranty.

False

Privity is required for recovery on the basis of warranty.

False

There can be no recovery on the basis of a breach of a UCC warranty by anyone other than the actual buyer.

False

To establish an express warranty under the UCC, the buyer must produce evidence that the seller used the term "warrant" or "guarantee."

False

Caveat emptor is a Latin term meaning "let the buyer beware."

True

Misuse of a product is a defense in a product liability suit.

True

Privity of contract is a direct contractual relationship between the parties.

True

Proof of negligence in product design or manufacture allows recovery of punitive damages.

True

The implied warranty of merchantability (unless disclaimed) is given in every sale of goods by a merchant.

True

The language "as is" disclaims both the warranty of merchantability and the warranty of fitness for a particular purpose.

True