Sales Contracts 3 of 3 (37)

Question 1

Product Liability

Answer 1

A manufacturer’s or seller’s liability to compensate buyers if the product causes injury or illness, which may be asserted on the basis of any of the following:

Breach of warranty—Buyer suffers injury and can demonstrate that the injury resulted from the breach of an express or implied warranty that was not properly disclaimed.

Negligence—A party’s careless actions cause harm to the other party requiring the plaintiff to prove an absence of due care, a defect in the product that was caused by carelessness, and damages to the plaintiff that resulted from the defect.

Strict liability—Makes the defendant liable, even in circumstances where the plaintiff did not apply care in the use of the product and was not in privity of contract with the defendant, requiring only that the plaintiff prove that an injury was suffered, that the seller was in the business of selling the product, and that the product was sold in an unreasonably dangerous condition due to the defect.

Question 2

Seller Remedies

Answer 2

Recourse available to a seller when a buyer is in breach of a sales contract, which may include the right to resell the goods, the right to stop the common carrier from delivering the goods, the right to cancel the contract, and the right to recover incidental and consequential, but not punitive, damages.

Question 3

Buyer Remedies

Answer 3

Recourse available to a buyer when a seller is in breach of a sales contract, which may include accepting some, all, or none of the goods; cover, which is the purchase of substitute goods and recovering any additional cost from the seller; specific performance in the case of goods that are unique; incidental and consequential, but not punitive, damages; and the right to rescind the contract.