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Business Law I > Unit 6 > Flashcards

Unit 6 Flashcards

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1
Q

An express warranty may be formed by any of the 3 ways

A
  1. an affirmation of fact or promise regarding the goods is part of the basis of the bargain
  2. any description of the goods is part of the basis of the bargain
  3. a sample or model of the goods 552
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2
Q

what test is used by the courts in determining whether an express warranty existed

A

the basis of the bargain test 552

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3
Q

implied warranty

A

A warrantee created by operation of law rather than the sellers express statements UCC 2-314(1) 554

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4
Q

In an implied warranty or merchantability case, the plaintiff argues that the seller breached the warranty by selling ___________ _______ and that the plaintiff should therefore recover _______ damages

A

unmerchantable goods, compensatory 554

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5
Q

4 types of negligence under product liability

A
  1. negligent manufacture
  2. negligent inspection
  3. negligent failure to provide adequate warnings
  4. negligent design 559
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6
Q

Implied warranty of fitness (3 elements)

A
  1. When the seller has reason to know of a particular purpose for which a buyer requires the goods
  2. the seller has reason to know that the buyer is relying on the seller’s skill or judgment for the selection of suitable goods; and
  3. the buyer actually relies on the seller’s skill or judgment in purchasing the goods 556
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7
Q

The strict liability rule ________ require the plaintive to prove a breach of duty.

A

does NOT 565

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8
Q

A seller is ______ liable when they engaged in the business of selling a product that was in a defective condition “unreasonably dangerous” to the user or consumer or to his property

A

strictly 565

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9
Q

Risk-utility test (3)

A
  • the designs social utility
  • the availability and effectiveness of alternative designs
  • and the cost of safer designs 559
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10
Q

402A of the Restatement 2nd

A

strict liability torts

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11
Q

The Magnuson-Moss Act

A

governs the enforcement of recovery on items costing more than $10 when then seller has provided a limited or full warranty. 571

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12
Q

Type of liability that provides a way for plaintiffs to bypass problems of causation that exist where several firms within an industry have manufactured a harmful standardized product, and it is impossible for the plaintiff to prove which firm produced the product that injured them

A

Industrywide liability 571

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13
Q

The usual UCC statute of limitations for express and implied warranty claims is _____ after the seller offers the defective goods to the buyer

A

4 years 573

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14
Q

Damages awarded when the buyers of a defective good have not received full value for the goods purchase price. Value of the goods as promised under the contract, minus the value of the goods as received.

A

Basis-of-the-bargain damages OR direct economic loss 573.

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15
Q

Damages that include personal injury, property damage, non-economic loss and economic loss resulting from a product defect.

A

Consequential damages 573

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16
Q

what are indirect economic losses

A

Lost profits or diminished business reputation 573

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17
Q

What are non-economic losses

A

Pain and suffering, physical impairment, mental distress, loss of enjoyment of life, loss of companionship or consortium, inconvenience, and disfigurement 573

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18
Q

Are punitive damages recoverable in express and implied warranty cases and why?

A

No, because punitive damages are not recoverable in contract cases 577

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19
Q

what defense often prohibits a buyer from suing manufacturers who make parts for the manufacturer who ultimately sold the product.

A

The no-privity defense 577

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20
Q

privity of contract only exists between buyers and ______ ______

A

Immediate sellers 579

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21
Q

It is quite difficult to disclaim an _______ warranty (because you can not disclaim what you have already offered.)

A

express 585

22
Q

disclaimers are more likely to be enforced between _____ parties while parties who suffered _______ injuries are more likely to recover if there is an applicable exception such as unconscionability.

A

commercial, personal

23
Q

3 common defenses to product liability suits

A
  1. product misuse
  2. assumption of risk
  3. contributory negligence 587
24
Q

Preemption defense

A

when a state law is preempted by federal law, a plaintiffs state-based claim will be thrown out 589.

25
Q

Regulatory compliance defense

A

whereby the defendant argues that their product adhered to applicable federal safety standards and that this compliance should shield them. 590

26
Q

a _____ is an uncertain, future events that affects a parties duty to perform

A

condition 498

27
Q

When a promisor’s duty is ______, his duty to perform is affected by the occurrence of the ______.

A

conditional, condition 498

28
Q

a _____ ______ is a future, uncertain event that creates the duty to perform.

A

condition precedent 498

29
Q

a _____ ______ occurs exists when the contract calls for the parties to perform at the same time and each person’s performance is conditioned on the performance or tender of performance by the other.

A

Concurrent condition 498

30
Q

a ____ ______ is a future, uncertain events that discharges the duty to perform.

A

Condition subsequent 498

31
Q

constructive conditions

A

also known as implied-in-law conditions, are conditions that are imposed by law rather than by the agreement of the parties 500

32
Q

express conditions

A

A condition that is specified in the language of the parties contract 500

33
Q

Strict performance standard

A

when a party’s duty is subject to an express condition, their failure to perform to the strict conditions will result in

  • forfeiture of the promisor’s payment
  • liability should the promisor sue for breach of contract

Example: frank agrees to pay Jester $500 on condition that Jester finish the job no later than June 1st. If Jester finished on Jun 15th, Frank does not have to pay Jester and Frank could sue Jester for breach of contract. 504

34
Q

a ____ _____ standard is a somewhat lower standard of performance that is applied to duties that are difficult to perform without some deviation from perfection if performance of those duties is not an express condition

A

Substantial performance 504

35
Q

A _____ ______ _____ standard is generally taken to mean that neither party to a contract would do anything to prevent the other from obtaining the benefits he has the right to expect from the parties agreement or their contractual relationship.

A

Good faith performance 504

36
Q

the good faith performance standard is _____ through law

A

implied 504

37
Q

a ____ ______ occurs when the promisor’s performance fails to reach the level of performance that the promisee is justified in expecting under the circumstances.

A

Material breach 506

38
Q

A _____ breach allows the injured party the cancel the contract while a _______ breach does not afford the injured party the right to cancel the contract

A

material, nonmaterial 506

39
Q

an _____ _____ or ____ ______ occurs when the promisor indicates before the time for his performance that he is unwilling or unable to carry out the contract. In this case the breach is material and the promisee is _____ from all further obligations of the contract.

A

Anticipatory repudiation, anticipatory breach, discharged 508

40
Q

When anticipatory repudiation occurs, the nonbreaching party ____ sue right away, or wait till the time when the performance was set to occur

A

CAN 509

41
Q

Parties who commit a material breach could (but are not guaranteed) possibly recover under these two remedies

A
  1. quasi-contract
  2. partial performance of a divisible contract (john agrees to moe bob’s lawn for $20 and clean the gutters for $30). 509
42
Q

3 forms of impossibilities that could excuse nonperformance of a contract

A
  1. illness or death
  2. supervening illegality (when a governmental regulation was enacted after the formation of the contract making the performance illegal).
  3. destruction of the subject matter of the contract 511
43
Q

under the UCC, an ________ excuse could be used in cases in which unforeseen developments make performance by the promisor highly impracticable, unreasonably expensive, or of little value to the promisee.

A

Impracticability 512

44
Q

restitution interest

A

Requires the defendant to pay the value of the benefits that the plaintiff has conferred on the other party (kind of like unjust enrichment). 513

45
Q

expectation interest

A

Placing the plaintiff in the position he would have been in has the contract been performed as promised. Commonly compensatory damages. 514

46
Q

liquidated damages provision

A

a clause whereby parties agree that a specific sum will be recoverable if the contract is breached 516

47
Q

punitive damages are generally not used in ________ cases, however one exception could be ________________.

A

breach of contract, breach of implied covenant of good faith 519

48
Q

specific performance and injections are examples of ______ remedies.

A

equitable 519

49
Q

specific performance remedies are most commonly applied in contracts for ________

A

Real estate 519

50
Q

two forms of restitution

A
  1. specific restitution: the defendant is required to return the exact property conferred on him by the plaintiff
  2. substitutionary restitution: a court awards the plaintiff a sum of money that reflects the amount by which he conferred upon the defendant 521

Business Law I (7 decks)

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