Pearson Ch21:Warranties

___________ is a warranty created when a seller or lessor makes an affirmation that the goods he or she is selling or leasing meet certain standards of quality, description, performance, or condition.

An express warranty

Which of the following regulates written warranties on consumer products?

the Magnuson-Moss Warranty Act

If a warranty needs to be disclaimed and the "as is" type of disclaimer is not used, which of the following may contain general language?

a disclaimer of the implied warranty of fitness for a particular purpose

Volkswagen is trying to repair its image after it was discovered that the company cheated on emissions tests for its diesel vehicles. For new buyers, Volkswagen is creating a warranty program as an incentive. Volkswagen is guaranteeing that any defective vehicle will be repaired or replaced free during a 36-month warranty period. Volkswagen's warranty deal is an example of which of the following?

a full warranty

You buy a new computer. Your new computer comes with a warranty. That warranty indicates that, in case the computer becomes defective, the warranty will cover the cost of parts but will not cover the labor to fix the product. Your new computer's warranty is an example of which of the following?

a limited warranty

You're looking for a used car, so you visit a few local lots. As you're looking at a used BMW, one of the salespeople comes over and points at the car. "Others would gladly pay $20,000 for this car," he says. The salesperson's statement is an example of which of the following?

a statement of opinion

A seller's or lessor's express or implied assurance to a buyer or lessee that the goods sold or leased meet certain quality standards is called_________________.

a warranty

Which of the following best defines an implied warranty?

a warranty that is not expressly stated in the sales or lease contract but instead is implied by law

A term that makes it clear to the buyer of a good that no implied warranties attach to the sale of the good is which of the following?

an "as is" disclaimer

Also known as "Let the buyer beware," which of the following was the traditional guideline of sales transactions until Articles 2 and 2A of the Uniform Commercial Code were established?

caveat emptor

Your brother is looking to buy a used car. He's been told by a used car salesperson that a certain used car has only been driven 15,000 miles. That would make the used car worth $25,000. Your brother agreed with the salesperson that this was a great deal, and purchased the car for $20,000. Unfortunately, the car was actually only worth $9,000 because it had actually been driven for 150,000 miles. Your brother discovers the breach of warranty. Your brother can sue the salesperson for which of the following?

compensatory damages

A heading printed in uppercase letters or a typeface that is larger, in a different style, or in a different color than the rest of the body of a sales or lease contract is considered to be_________.

conspicuous

Sellers or lessors who make express warranties are subject to the provisions of the Magnuson-Moss Warranty Act. If a warrantor chooses to make an express warranty, the Magnuson-Moss Warranty Act requires that the warranty be labeled as either "full" or "limited." The Magnuson-Moss Warranty Act is a federal statute that covers written warranties related to____________________.

consumer products

If the "as is" type of disclaimer is not used, a ___________ must specifically mention the term merchantability for the implied warranty of merchantability to be disclaimed.

disclaimer of the implied warranty of merchantability

A person is enjoying his basket of chicken nuggets until she injures herself when she bites down on a chicken bone. Under which of the following would the implied warranty be breached?

the consumer expectation test

A person is enjoying his basket of chicken nuggets until he looks more closely at one and discovers it's actually a deep-fried sponge. By then, the person has already taken a few bites and will suffer injuries from swallowing the sponge. Under which of the following would the implied warranty be breached?

the foreign substance test

Seamstress Inc., a manufacturer of quick-sew sewing machines, sells a machine to Rag & Bone, a clothing manufacturer. Subsequently, Marjani claims that she has a patent on the machine. Marjani proves her patent claim in court. Marjani then notifies Rag & Bone that the machine can no longer be used without her permission and the payment of a fee to her. Rag & Bone may rescind the sales contract with Seamstress Inc. based on the breach of which of the following?

warranty against infringement

Caterpillar owns a large tractor. A thief steals the tractor and sells it to Builder's Construction. Builder's Construction does not know that the tractor is stolen. If Caterpillar discovers that Builder's Construction has the equipment, it can reclaim it. Builder's Construction, in turn, can recover against the thief for breach of the warranty of title. Builder's Construction can recover against the thief because the thief implied that he had_____________to the equipment and that the transfer of title to Builder's Construction was rightful.

warranty of good title

Mining Services Corporation, as lessor, leases a piece of heavy equipment to American Drilling Company for their sapphire mining projects. Mining Services Corp. later gives a security interest in the equipment to Trust Bank as collateral for a loan. Mining Services Corp. then defaults on the loan to Trust Bank, and Trust Bank repossesses the equipment from American Drilling Company. American Drilling Company can recover damages from Mining Services Corp for breach of the_________________.

warranty of no interference

A statement that negates express and implied warranties is called_______________.

a warranty disclaimer

Which of the following refers to a characteristic of warranties that are not expressly stated in a sales or lease contract?

implied by law

Shannon wants to buy lumber to build a small play structure for her niece in her backyard. She goes to Jack's Lumber to purchase the lumber and describes to Jack, the owner, the design of her play structure project. Shannon also tells Jack that she is relying on him to select the right lumber for the project. Jack selects the lumber and states that the lumber will serve Shannon's purpose. Shannon buys the lumber and builds the structure. However, during a birthday party, the structure collapses, and several toddlers are injured because the lumber was not strong enough to support it. Shannon can sue Jack for breach of which of the following?

the implied warranty of fitness for a particular purpose

A warranty that applies to food or drink consumed on or off the premises of restaurants, grocery stores, fast-food outlets, coffee shops, bars, vending machines, and other purveyors of food and drink is called______________.

the implied warranty of fitness for human consumption

A stool must be able to safely perform the function of a stool. If a normal-sized person sits in a stool that has not been tampered with and the stool collapses, there has been a breach of the implied warranty. If the same person is injured because she uses the stool as a ladder and it tips over, there is no breach of implied warranty because use as a ladder is not the ordinary purpose of a stool. To which of the following types of implied warranty does the scenario refer?

the implied warranty of merchantability

Mark purchases a washer/dryer combination on credit from US Appliances, an appliance store. The store takes back a security interest in the washer/dryer. Before completely paying off the refrigerator, Mark sells it to Ashley for cash. Ashley has no knowledge of the store's security interest in the refrigerator. After Mark misses several payments, the appliance store discovers that Ashley has the washer/dryer and repossesses the washer/dryer. Ashley can recover against Mark, based on his breach of_____________ in the goods.

warranty of no security interests