Contracts - UCC Art 2 - Terms: Warranties & Product Liability

Question 1

What are the requirements for a disclaimer of oral express warranties?

Answer 1

1. Specific;
2. Unambiguous;
3. Clearly and conspicuously drawn to attention of buyer.

Question 2

List three types of express warranties.

Answer 2

1. Affirmations of fact or promises;
2. Sales by description;
3. Sales by sample or model.

Question 3

Describe the elements of a disclaimer of a warranty of title.

Answer 3

Must be in writing and conspicuous or be obvious from the nature of the goods or the transaction that there is no warranty of title.

Question 4

List the requirements for establishing negligent product liability.

Answer 4

1. Product is in a defective condition that is unreasonably dangerous by design, production, or lack of warning.
2. Seller is in the business of manufacturing, distributing, or selling the product.
3. The product reaches the buyer in the same condition as when it left the seller’s possession (i.e., it has not been altered)
4. Seller had knowledge that the product was defective and did not take steps to fix the problem.

Question 5

Can an express warranty be withdrawn?

Answer 5

It is not possible to make an express warranty and then withdraw it when it has been a basis of the bargain.

Question 6

List the criteria required for an implied warranty of fitness for a particular purpose.

Answer 6

1. The seller must expressly or impliedly know the purpose or buyer’s use;
2. The buyer must rely on seller in making selection.

Question 7

Give examples of language that effectively disclaims implied warranties of merchantability and fitness for a particular purpose.

Answer 7

1. “As is” sale;
2. “Sold with all faults;”
3. Any other language brought to Buyer’s attention plainly making a disclaimer.

Question 8

List the protections given by the implied warranty of title.

Answer 8

1. Seller has a good title and transfer is rightful;
2. There are no outstanding liens, encumbrances or security interests;
3. If seller is a merchant, goods shall be delivered free from third party infringement claims.

Question 9

What is the difference between recovery under strict tort liability and recovery under negligence?

Answer 9

Punitive damages are available for negligence.

Question 10

Explain when the implied warranty of merchantability is given.

Answer 10

1. Seller is a merchant; and

2. Goods are warranted to be fit for ordinary use, of proper kind, properly packaged, and conform to the label.

Question 11

Describe the elements of a disclaimer of an implied warranty of fitness for a particular purpose.

Answer 11

Must be written; must be conspicuous; General disclaimer of “As is,” “With all faults,” or “As they stand” disclaims this and warranty of merchantability.

Question 12

What are the necessary requirements for a party in a transaction to disclaim an implied warrant of merchantability?

Answer 12

1. Must mention word merchantability;
2. Can be in writing or oral;
3. If in writing, must be conspicuous.

Question 13

What are the necessary requirements for a party in a transaction to disclaim an implied warranty of fitness for a particular purpose?

Answer 13

1. Must be in writing;

2. Conspicuous.

Question 14

List the justifications that a party in a transaction can use as a warranty defense.

Answer 14

1. Lack of Privity;
2. Statute of Limitations;
3. Failure of Notice of Breach.

Question 15

When does an implied warranty that arises from a course of dealing or trade usage apply?

Answer 15

When both parties have a knowledge of a well-recognized usage of trade, or by numerous past performances, infer a warranty course of action intended to be performed.

Question 16

Describe the elements of a disclaimer of an implied warranty of merchantability.

Answer 16

If written, must be conspicuous. Must use terms such as “No warranty of merchantability” or general disclaimer of “As is,” “With all faults,” or “As they stand.”

Question 17

List the requirements for establishing strict tort liability.

Answer 17

1. Product is in a defective condition that is unreasonably dangerous by design, production, or lack of warning.
2. Seller is in the business of manufacturing, distributing, or selling the product.
3. The product reaches the buyer in the same condition as when it left the seller’s possession (i.e., it has not been altered).

Question 18

List the four types of warranties that are given under Article 2 sales contracts.

Answer 18

1. Express Warranties;
2. Implied Warranty of Title;
3. Implied Warranty of Merchantability;
4. Implied Warranty of Fitness for a Particular Purpose.