Chapter 19 - Warranties

Question 1

express warranty

Answer 1

• a warranty that the law derives by implication or inference from the nature of the transaction or the relative situation or circumstances of the parties

Question 2

implied warranty

Answer 2

• a warranty that goods sold or leased are fit for a particular purpose
• the warranty arises when any seller or lessor knows the particular purpose for which a buyer or lessee will use the goods and knows that the buyer or lessee is relying on the skill and judgement of the seller or lessor to select suitable goods

Question 3

implied warranty of fitness for a particular purpose

Answer 3

• a warranty that goods being sold or leased are reasonably fit for the ordinary purpose for which they are sold or leased, are properly packaged and labeled, and are of fair quality
• the warranty automatically arises in every sale or lease of goods made by a merchant who deals in goods of the kind sold or leased

Question 4

implied warranty of merchantability

Answer 4

-

Question 5

SAMPLE TEST QUESTIONS

1. Medical Equipment Supply Company and Natural Rehabilitation Center enter into a contract for a lease of a certain number of wheelchairs. Medical Equipment assures the lessee that it has a valid title to the goods. Under the UCC, this type of title warranty arises :
   a. automatically
   b. only if the buyer asks for such a warranty
   c. only if the seller expenses such a warranty
   d. only if the seller actually has valid title to the goods

Answer 5

ANSWER :
(D)
CORRECT :
(A)

Question 6

SAMPLE TEST QUESTIONS

2. Arnold buys a backhoe from Big a Dig Equipment, Inc. Arnold is unaware that Credit Collection Company holds a lien against the backhoe when he buys it. If Credit Collection repossesses the backhoe, Arnold can :
   a. recover from Big Dig for breach of warranty
   b. do nothing
   c. file criminal charges against Big Dig and Credit Collection
   d. recover damages from Credit Collection for breach of warranty

Answer 6

ANSWER :
(A)
CORRECT :
(A)

Question 7

SAMPLE TEST QUESTIONS

3. Riverside Ranch is a horse breeding facility. Steed Stables is a customer looking for a new stallion for its breeding program. Riverside’s representative Tomas shows Steed a stallion that he says is very fertile and can easily breed twenty mares per year. This statement is :
   a. an express warranty
   b. an implied warranty
   c. a warranty of title
   d. puffery

Answer 7

ANSWER :
(D)
CORRECT :
(A)

Question 8

SAMPLE TEST QUESTIONS

4. Livestock Feedlot orders one hundred sacks of cattle feed from MegaNutrient Feed, Inc. Each sack is stamped with the phrase “Twenty percent protein.” This is :
   a. an express warranty
   b. an implied warranty
   c. a warranty of title
   d. puffery

Answer 8

ANSWER :
(A)
CORRECT :
(A)

Question 9

SAMPLE TEST QUESTIONS

5. MotorCo, Inc., makes and sells auto parts to retail repair services, vehicle sales outlets, and consumer parts stores. On one MotorCo box is a label that reads “Contains one gross (144) spark plugs, assorted sizes.” This statement is :
   a. an implied warranty of fitness for a particular purpose
   b. an implied warranty of merchantability
   c. an express warranty
   d. none of the choices

Answer 9

ANSWER :
(C)
CORRECT :
(C)

Question 10

SAMPLE TEST QUESTIONS

6. Chords Guitars, Inc., sells guitars and other stringed instruments to consumers. A Chord salesperson says to a potential customer, “This Chord is the best guitar you’ll find anywhere, even online.” This statement is :
   a. an implied warranty of fitness for a particular purpose
   b. an implied warranty of merchantability
   c. an express warranty
   d. none of the choices

Answer 10

ANSWER :
(D)
CORRECT :
(D)

Question 11

SAMPLE TEST QUESTIONS

7. Phoenix, a salesperson for Quality Fruits, Inc., shows Robert, a buyer for Sweet Home Fruit Company, samples of peaches, 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. puffery

Answer 11

ANSWER :
(A)
CORRECT :
(A)

Question 12

SAMPLE TEST QUESTIONS

8. Quade is an expert in twentieth-century art. Rachel visits Quade’s gallery, seeking to buy artwork as an investment. Quade shows her a painting that in his opinion is by Picasso. Quade’s statement is :
   a. an express warranty
   b. an implied warranty
   c. an opinion
   d. puffery

Answer 12

ANSWER :
(C)
CORRECT :
(A)

Question 13

SAMPLE TEST QUESTIONS

9. 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
   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

Answer 13

ANSWER :
(D)
CORRECT :
(A)

Question 14

SAMPLE TEST QUESTIONS

10. Replay Sports Stores and SportsPower Products, Inc., enter into a contract for a sale of trampolines. SportsPower Products is a merchant who deals in goods of the kind sold. Under the UCC, an implied warranty of merchantability arises :
    a. automatically
    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

Answer 14

ANSWER :
(A)
CORRECT :
(A)

Question 15

SAMPLE TEST QUESTIONS

11. Beginners Run Ski Shop sells a pair of skis to Crystal. When Crystal first uses the skis, they snap in two. The cause is something that Beginners Run did not know about and could not have discovered. Beginners Run breached :
    a. the merchant’s implied duty of inspection
    b. the implied warranty of merchantability
    c. no duty or warrant because Beginners Run knew nothing about the defect that made the goods unsafe
    d. no duty or warranty because consumers should reasonably expect to occasionally find a product that does not work as warranted

Answer 15

ANSWER :
(A)
CORRECT :
(B)

Question 16

SAMPLE TEST QUESTIONS

12. Rita eats Salsa Caliente made and sold by Salsa Zest Corporation and becomes ill. Rita files a suit against Salsa Zest, alleging that its product was not merchantable. Merchantable food is food that is fit to eat on the basis of :
    a. consumer expectations
    b. what constitutes a perfect condition
    c. it’s maker’s intentions
    d. it’s producer’s experience

Answer 16

ANSWER :
(B)
CORRECT :
(A)

Question 17

SAMPLE TEST QUESTIONS

13. Freddy buys bike shoes from Get n’ Gear Store, telling the clerk that she wants the shoes to compete in High Pace Triathlon. The shoes break apart during the competition, causing Freddy to be injured. Get n’ Gear most likely breached :
    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

Answer 17

ANSWER :
(B)
CORRECT :
(B)

Question 18

SAMPLE TEST QUESTIONS

14. Aerospace, Inc., makes and sells flight navigation equipment, through independent salespersons, to retailers for resale to consumers. The Magnuson-Moss Warranty Act covers :
    a. implied warranties, oral statements, and written promises
    b. only implied warranties that consumers are aware of
    c. only a salesperson’s oral statements
    d. only a seller’s written promises

Answer 18

ANSWER :
(D)
CORRECT :
(D)

Question 19

SAMPLE TEST QUESTIONS

15. Eden Valley Ranch and Farm Supply Corporation enter into a contract for a sale of fencing materials. Farm Supply, a merchant who delays in goods of the kind, makes implied and express warranties in connections 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

Answer 19

ANSWER :
(C)
CORRECT :
(C)

Question 20

SAMPLE TEST QUESTIONS

16. Grande Floors, Inc., and Home Decor Stores enter into a contract for a sale of carpeting. Grande Floors, 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

Answer 20

ANSWER :
(A)
CORRECT :
(A)

Question 21

SAMPLE TEST QUESTIONS

17. Band Instruments, Inc., sells seventy-six trombones to Community & School Band Source, Inc. To avoid liability for most implied warranties, Band Instruments should state in writing that the trombones are sold :
    a. as is
    b. by a merchant
    c. in perfect condition
    d. with no known defects

Answer 21

ANSWER :
(D)
CORRECT :
(A)

Question 22

SAMPLE TEST QUESTIONS

18. Regal Autos, Inc., sells cars to consumers. To avoid potential liability for oral express warranties, each Regal sales agreement should note that a car is sold :
    a. as is
    b. by a merchant
    c. subject to warranties included in written contract only
    d. with no known defects

Answer 22

ANSWER :
(C)
CORRECT :
(C)

Question 23

SAMPLE TEST QUESTIONS

19. WaterCourse Pipe Company includes in its contracts a provision that reads, in large red letters, “There are no warranties that extend beyond the description on the face hereof.” This disclaimer effectively negates :
    a. the implied warranty of fitness for a particular purpose
    b. the implied warranty of merchantability
    c. the implied warranty of title
    d. none of the choices

Answer 23

ANSWER :
(D)
CORRECT :
(A)

Question 24

SAMPLE TEST QUESTIONS

20. Marcos buys a pneumatic drill from NuTools, Inc. Owen leases a table saw from Piercework Tools Sales & Lease Company. Later, Marcos and Owen become aware of defects in the goods that indicate breaches of warranty. An action for breach of warranty accrues when :
    a. the seller or lessor tenders delivery
    b. the buyer or lessee becomes aware of the breach
    c. the non-breaching party notifies the breaching party of the breach
    d. four years have passed since the breach occurred

Answer 24

ANSWER :
(B)
CORRECT :
(A)