Question 1

A statute of repose places an absolute limit on when a lawsuit may be filed regardless of when the defect is discovered.

Accepted Answer

A) True 
 B)False

Question 2

A purchaser may acquire better title than the seller had.

Accepted Answer

A) True 
 B)False

Question 3

Even though a car has an obvious dent in the rear quarter panel,the salesperson tells a potential customer,"This car has never been in an accident." The salesperson's statement creates a valid express warranty.

Accepted Answer

A) True 
 B)False

Question 4

Under which of the following warranties must the seller be a merchant?

Accepted Answer

A) Express warranties. 
B) Implied warranty of merchantability. 
C) Implied warranty of fitness for a particular purpose. 
D) Both b andc 
A) Express warranties. 
B) Implied warranty of merchantability. 
C) Implied warranty of fitness for a particular purpose. 
D) Both b andc

Question 5

A product liability case may be brought in warranty,negligence,or strict liability,but it must have the element that a person or business has been hurt by goods.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following would be a breach of the implied warranty of merchantability?

Accepted Answer

A) A knife that cuts its user when slicing a bagel. 
B) A radio that does not pick up FM signals. 
C) A match that burns a spot in the carpet when accidentally dropped. 
D) A watch that does not keep accurate time after getting wet. 
A) A knife that cuts its user when slicing a bagel. 
B) A radio that does not pick up FM signals. 
C) A match that burns a spot in the carpet when accidentally dropped. 
D) A watch that does not keep accurate time after getting wet.

Question 7

When Angelena was shopping for a new lawn mower,the salesman,Mark,told her the model she was interested in cuts an 18" swath and the only maintenance it needs is an oil change and a new sparkplug at the beginning of each mowing season.He hands her a warranty booklet which describes that model as a mulching mower and says it has a five-year full warranty.The booklet also disclaims "any warranties or statements made by any agent or salesperson or that appear elsewhere in this booklet." The effect of the written disclaimer is:

Accepted Answer

A) that it is valid to disclaim only the written warranties within the booklet. 
B) that it is valid to disclaim both oral and written warranties. 
C) it does not disclaim either the oral or written warranties. 
D) that it disclaims the oral warranties,but not the written warranties. 
A) that it is valid to disclaim only the written warranties within the booklet. 
B) that it is valid to disclaim both oral and written warranties. 
C) it does not disclaim either the oral or written warranties. 
D) that it disclaims the oral warranties,but not the written warranties.

Question 8

In which case does the buyer receive no title to the goods he purchases?

Accepted Answer

A) Owner has good title.Max steals the goods and sells them to buyer. 
B) Owner has good title.Max purchases the goods using deception.He then sells them to buyer who gives value and acts in good faith. 
C) Owner has good title.Max purchases the goods using fraud.He then sells them to buyer who is not a BFP. 
D) All of the above. 
E) Both a and c. 
A) Owner has good title.Max steals the goods and sells them to buyer. 
B) Owner has good title.Max purchases the goods using deception.He then sells them to buyer who gives value and acts in good faith. 
C) Owner has good title.Max purchases the goods using fraud.He then sells them to buyer who is not a BFP. 
D) All of the above. 
E) Both a and c.

Question 9

Which of the following is not guaranteed under an implied warranty?

Accepted Answer

A) The goods are free of hidden security interests or liens. 
B) The goods are not subject to a rightful claim by a third party. 
C) The goods are merchantable. 
D) The goods may be returned for a refund or replaced in the event of any defect. 
A) The goods are free of hidden security interests or liens. 
B) The goods are not subject to a rightful claim by a third party. 
C) The goods are merchantable. 
D) The goods may be returned for a refund or replaced in the event of any defect.

Question 10

A buyer has an insurable interest in goods when they are identified.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following warranties provides that the goods will be useable for the ordinary purposes for which they are used?

Accepted Answer

A) Infringement. 
B) Fitness for a particular purpose. 
C) Merchantability. 
D) Title. 
A) Infringement. 
B) Fitness for a particular purpose. 
C) Merchantability. 
D) Title.

Question 12

Arco sells to Melvin 1,000 computers that are stored in Arco's warehouse.Arco gives Melvin the ownership documents and Melvin will pick up the computers at the warehouse.Title has passed to Melvin.

Accepted Answer

A) True 
 B)False

Question 13

Assume that Bubba orders 15 cases of BBQ chips from Mays Potato Chips for his restaurant,Bubba's BBQ.Mays ships 15 cases of regular chips by mistake.If Bubba decides to keep the regular chips,in spite of the nonconformity with the contract,then the destruction of the chips when a water pipe breaks in the food storage room will result in:

Accepted Answer

A) Mays' having to bear the loss,because it shipped nonconforming goods to Bubba. 
B) Mays' having to bear the loss,because it failed to insure the chips. 
C) Bubba's having to bear the loss,because he accepted delivery of the nonconforming chips. 
D) Bubba's having to bear the loss,because it was a sale on approval contract. 
A) Mays' having to bear the loss,because it shipped nonconforming goods to Bubba. 
B) Mays' having to bear the loss,because it failed to insure the chips. 
C) Bubba's having to bear the loss,because he accepted delivery of the nonconforming chips. 
D) Bubba's having to bear the loss,because it was a sale on approval contract.

Question 14

Generally,a contract may include language that limits or alters the damages recoverable for a breach of warranty,as long as the restrictions are not unconscionable.

Accepted Answer

A) True 
 B)False

Question 15

Imogene takes her diamond solitaire ring to Sparkle Jewelry Shop to have the prongs holding the diamond retipped and have the ring cleaned.The clerk at Sparkle says she will have to leave the ring and that it should be ready in about a week.When Imogene returns in a week to get her ring,she finds out that the ring has been sold.Which of the following is true?

Accepted Answer

A) Sparkle Jewelry Shop had the power to transfer all of Imogene's rights in the ring to a good faith buyer in the ordinary course of business. 
B) This situation was a theft of the ring by Sparkle,and Sparkle must retrieve the ring and return it to Imogene. 
C) The buyer of the ring must return it to Imogene since the buyer did not fully investigate whether Sparkle had good title to the ring. 
D) Imogene has lost title to her ring and has no recourse since she is responsible for investigating the merchant's integrity before leaving her property. 
A) Sparkle Jewelry Shop had the power to transfer all of Imogene's rights in the ring to a good faith buyer in the ordinary course of business. 
B) This situation was a theft of the ring by Sparkle,and Sparkle must retrieve the ring and return it to Imogene. 
C) The buyer of the ring must return it to Imogene since the buyer did not fully investigate whether Sparkle had good title to the ring. 
D) Imogene has lost title to her ring and has no recourse since she is responsible for investigating the merchant's integrity before leaving her property.

Question 16

In order to disclaim a warranty of fitness for a particular purpose,a merchant:

Accepted Answer

A) need do nothing;such a warranty will not exist unless the merchant intends to create the warranty. 
B) must make the disclaimer orally and directly to the buyer. 
C) may disclaim the warranty with any language that is clear and conspicuous. 
D) None of the above.Implied warranties cannot be disclaimed. 
A) need do nothing;such a warranty will not exist unless the merchant intends to create the warranty. 
B) must make the disclaimer orally and directly to the buyer. 
C) may disclaim the warranty with any language that is clear and conspicuous. 
D) None of the above.Implied warranties cannot be disclaimed.

Question 17

On impulse,you purchase a travel trailer and ask your acquaintance,Max,if you can leave the trailer at the edge of his restaurant's parking lot until you can have a concrete pad built to store the trailer on your property.Max agrees.When you return for the trailer the next week,it is gone and you find out that Max sold it.You can:

Accepted Answer

A) recover the trailer because Max did not have any ownership interest to pass. 
B) recover,but only if Max bought insurance to cover the trailer while it was on his property. 
C) not recover because you "entrusted" the trailer to Max,who then had a right to sell it. 
D) not recover because Max had only a voidable title to transfer. 
A) recover the trailer because Max did not have any ownership interest to pass. 
B) recover,but only if Max bought insurance to cover the trailer while it was on his property. 
C) not recover because you "entrusted" the trailer to Max,who then had a right to sell it. 
D) not recover because Max had only a voidable title to transfer.

Question 18

In January,Eddie contracts to sell 100 bushels of soybeans that fall.This contract:

Accepted Answer

A) is void.He cannot contract to sell a crop before it is even planted;the goods must be in existence. 
B) is void.The soybeans must be identified to the contract at the time he contracts to sell them. 
C) can be valid;but title to the soybeans cannot pass until the soybeans exist. 
D) can be valid,and title to the soybeans passes when the contract is signed. 
A) is void.He cannot contract to sell a crop before it is even planted;the goods must be in existence. 
B) is void.The soybeans must be identified to the contract at the time he contracts to sell them. 
C) can be valid;but title to the soybeans cannot pass until the soybeans exist. 
D) can be valid,and title to the soybeans passes when the contract is signed.

Question 19

Which one of the following warranties arises in a sale of goods?

Accepted Answer

A) Implied warranty of title. 
B) Warranty against adverse possession. 
C) Implied warranty of quiet enjoyment. 
D) All of the above arise in a sale of goods. 
A) Implied warranty of title. 
B) Warranty against adverse possession. 
C) Implied warranty of quiet enjoyment. 
D) All of the above arise in a sale of goods.

Question 20

Circuit City Stores,Inc.v.Commissioner of Revenue...

Accepted Answer

A) the issue was where were the goods identified. 
B) the Court determined that the goods were not subject to Massachusetts sales tax because title did not pass until they were picked up in new Hampshire. 
C) The case involved insurable interest in good sold in one state but picked up in another. 
D) the court determined that until a specific serial number was recorded and the goods were identified title could not pass. 
A) the issue was where were the goods identified. 
B) the Court determined that the goods were not subject to Massachusetts sales tax because title did not pass until they were picked up in new Hampshire. 
C) The case involved insurable interest in good sold in one state but picked up in another. 
D) the court determined that until a specific serial number was recorded and the goods were identified title could not pass.

Exam 20: Ownership and Warranties

A statute of repose places an absolute limit on when a lawsuit may be filed regardless of when the defect is discovered.

A purchaser may acquire better title than the seller had.

Even though a car has an obvious dent in the rear quarter panel,the salesperson tells a potential customer,"This car has never been in an accident." The salesperson's statement creates a valid express warranty.

Under which of the following warranties must the seller be a merchant?

A product liability case may be brought in warranty,negligence,or strict liability,but it must have the element that a person or business has been hurt by goods.

Which of the following would be a breach of the implied warranty of merchantability?

In which case does the buyer receive no title to the goods he purchases?

Which of the following is not guaranteed under an implied warranty?

A buyer has an insurable interest in goods when they are identified.

Which of the following warranties provides that the goods will be useable for the ordinary purposes for which they are used?

Arco sells to Melvin 1,000 computers that are stored in Arco's warehouse.Arco gives Melvin the ownership documents and Melvin will pick up the computers at the warehouse.Title has passed to Melvin.

Generally,a contract may include language that limits or alters the damages recoverable for a breach of warranty,as long as the restrictions are not unconscionable.

In order to disclaim a warranty of fitness for a particular purpose,a merchant:

In January,Eddie contracts to sell 100 bushels of soybeans that fall.This contract:

Which one of the following warranties arises in a sale of goods?

Circuit City Stores,Inc.v.Commissioner of Revenue...

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