Terms and Warranties Flashcards
In general, if there is no evidence of the parties intentions, contracts will be construed as a whole and ambiguities in the contract will be
construed against the party drafting the contract.
Regarding warranties, a sample or model item can
create an express warranty.
An implied warranty of merchantability may be disclaimed __________.
either by a specific disclaimer mentioning merchantability or by general language such as “as is”.
To be effective, a warranty disclaimer must be agreed to
during the bargaining process.
A written, conspicuous disclaimer is necessary only if
the sales contract is in writing.
Regarding a sale of goods contract, if the price is left open to be agreed upon later and the parties fail to agree, the price is
a reasonable price at the time of delivery.
If the place for delivery is not specified, the place is the
sellers place of business, if he has one, otherwise it is the sellers house.
If the time for payment is not specified,
payment is due at the time and place at which the buyer is to receive the goods.
If the quantity term is not specified,
there is no contract.
C.I.F. means that the price in the contract includes the price of
the goods, the cost of shipping, and the cost of purchasing insurance for the buyer’s benefit.
Under an F.O.B. (free on board) contract, the seller has the risk of loss until
the goods reach the location specified.
The implied warranty of merchantability is implied
in every contract for sale by a merchant who deals in goods of the kind sold.
In a shipment contract, when goods are destroyed en route from the Seller to the Buyer, the risk of loss is borne by:
the buyer because the risk of loss passed to the buyer when the goods were delivered to the carrier.
Which of the following terms is interpreted as creating a destination contract?
F.O.B. the buyers place of business.
If Seller is a merchant, the risk of loss does not pass to Buyer until Buyer
takes physical possession of the goods.
If the seller is not a merchant, the risk of loss passes to the buyer
upon tender of delivery.
The implied warranty of fitness for a particular purpose arises whenever
(i) any seller has reason to know the particular purpose for which the goods are to be used and that the buyer is relying on the seller’s skill or judgment to select suitable goods, and (ii) the buyer in fact relies on the seller’s skill or judgment.
If the offeror is a merchant and the offeree is a nonmerchant, additional terms in an acceptance ______.
Become part of the contract if the offeror expressly agrees.
General disclaimers include:
(i) language such as “as is,” “with all faults;” (ii) examination of goods by the buyer or a refusal to examine when the defects would be revealed by examination; and (iii) course of dealing, course of performance, or usage of trade.
For which of the following does Article 2 provide gap-filling provisions?
Price; time and place of delivery; time for payment.
Under Article 2, if goods are so defective that the buyer has a right to reject them the __________.
risk of loss does not pass to the buyer until the defects are cured or the buyer accepts the goods despite the defects.
Unless properly disclaimed, this warranty is included in every contract for the sale of goods:
Warranty of Title.
The warranty against infringement warrants that goods are
delivered free of any patent, trademark, copyright, or similar claims, and arises automatically only in contracts by merchant sellers.
When, in a contract between merchants for the sale of goods, the acceptance does not match the terms of the offer
Additional terms that do not materially alter the original terms of the offer will be included in the contract, but different terms may be knocked out of the contract.
If both the buyer and seller are merchants, an additional term in an acceptance is included in the contract unless it
materially alters the original offer terms, the offer expressly limited the acceptance to its terms, or the offeror objects within a reasonable time.
Under the warranty of _____________ , goods are warranted to be fit for the ordinary purpose for which such goods are used.
Merchantability
Under the U.C.C.
A contract may be modified without consideration.
Under the U.C.C., a contract is required to be modified in writing only if
the contract so requires or the contract, as modified, falls within the Statute of Frauds.
If a written contract expressly provides that it may be modified only by a writing, ___________.
The common law rule is that the parties can orally modify the contract
When goods covered by a sales contract are defective, the risk of loss is on the buyer despite the defects ___________.
once the defects are cured.
If both Seller and Buyer are merchants, the contract includes the shipping charges term unless
Seller objects within a reasonable time.
Under the common law of contracts, modification of a written contract requires __________.
Consideration.
