Terms and Warranties

Question 1

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

Answer 1

construed against the party drafting the contract.

Question 2

Regarding warranties, a sample or model item can

Answer 2

create an express warranty.

Question 3

An implied warranty of merchantability may be disclaimed __________.

Answer 3

either by a specific disclaimer mentioning merchantability or by general language such as “as is”.

Question 4

To be effective, a warranty disclaimer must be agreed to

Answer 4

during the bargaining process.

Question 5

A written, conspicuous disclaimer is necessary only if

Answer 5

the sales contract is in writing.

Question 6

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

Answer 6

a reasonable price at the time of delivery.

Question 7

If the place for delivery is not specified, the place is the

Answer 7

sellers place of business, if he has one, otherwise it is the sellers house.

Question 8

If the time for payment is not specified,

Answer 8

payment is due at the time and place at which the buyer is to receive the goods.

Question 9

If the quantity term is not specified,

Answer 9

there is no contract.

Question 10

C.I.F. means that the price in the contract includes the price of

Answer 10

the goods, the cost of shipping, and the cost of purchasing insurance for the buyer’s benefit.

Question 11

Under an F.O.B. (free on board) contract, the seller has the risk of loss until

Answer 11

the goods reach the location specified.

Question 12

The implied warranty of merchantability is implied

Answer 12

in every contract for sale by a merchant who deals in goods of the kind sold.

Question 13

In a shipment contract, when goods are destroyed en route from the Seller to the Buyer, the risk of loss is borne by:

Answer 13

the buyer because the risk of loss passed to the buyer when the goods were delivered to the carrier.

Question 14

Which of the following terms is interpreted as creating a destination contract?

Answer 14

F.O.B. the buyers place of business.

Question 15

If Seller is a merchant, the risk of loss does not pass to Buyer until Buyer

Answer 15

takes physical possession of the goods.

Question 16

If the seller is not a merchant, the risk of loss passes to the buyer

Answer 16

upon tender of delivery.

Question 17

The implied warranty of fitness for a particular purpose arises whenever

Answer 17

(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.

Question 18

If the offeror is a merchant and the offeree is a nonmerchant, additional terms in an acceptance ______.

Answer 18

Become part of the contract if the offeror expressly agrees.

Question 19

General disclaimers include:

Answer 19

(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.

Question 20

For which of the following does Article 2 provide gap-filling provisions?

Answer 20

Price; time and place of delivery; time for payment.

Question 21

Under Article 2, if goods are so defective that the buyer has a right to reject them the __________.

Answer 21

risk of loss does not pass to the buyer until the defects are cured or the buyer accepts the goods despite the defects.

Question 22

Unless properly disclaimed, this warranty is included in every contract for the sale of goods:

Answer 22

Warranty of Title.

Question 23

The warranty against infringement warrants that goods are

Answer 23

delivered free of any patent, trademark, copyright, or similar claims, and arises automatically only in contracts by merchant sellers.

Question 24

When, in a contract between merchants for the sale of goods, the acceptance does not match the terms of the offer

Answer 24

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.

Question 25

If both the buyer and seller are merchants, an additional term in an acceptance is included in the contract unless it

Answer 25

materially alters the original offer terms, the offer expressly limited the acceptance to its terms, or the offeror objects within a reasonable time.

Question 26

Under the warranty of _____________ , goods are warranted to be fit for the ordinary purpose for which such goods are used.

Answer 26

Merchantability

Question 27

Under the U.C.C.

Answer 27

A contract may be modified without consideration.

Question 28

Under the U.C.C., a contract is required to be modified in writing only if

Answer 28

the contract so requires or the contract, as modified, falls within the Statute of Frauds.

Question 29

If a written contract expressly provides that it may be modified only by a writing, ___________.

Answer 29

The common law rule is that the parties can orally modify the contract

Question 30

When goods covered by a sales contract are defective, the risk of loss is on the buyer despite the defects ___________.

Answer 30

once the defects are cured.

Question 31

If both Seller and Buyer are merchants, the contract includes the shipping charges term unless

Answer 31

Seller objects within a reasonable time.

Question 32

Under the common law of contracts, modification of a written contract requires __________.

Answer 32

Consideration.