Question 1

The statute of limitations for breach of warranty under the UCC is

Accepted Answer

A) one year. 
B) two years. 
C) three years. 
D) four years. 
A) one year. 
B) two years. 
C) three years. 
D) four years.

Question 2

Implied warranties are created by

Accepted Answer

A) the seller's words or actions. 
B) the buyer's intentions. 
C) the UCC itself. 
D) both the seller and the buyer. 
A) the seller's words or actions. 
B) the buyer's intentions. 
C) the UCC itself. 
D) both the seller and the buyer.

Question 3

Bill is injured when his new motorcycle speeds out of control because of a defective part.In most jurisdictions,Bill

Accepted Answer

A) can sue the motorcycle manufacturer even though he does not have privity. 
B) cannot sue the motorcycle manufacturer because his injuries are personal injuries as opposed to economic loss. 
C) cannot sue the motorcycle manufacturer because the law requires arbitration. 
D) cannot sue the motorcycle manufacturer because there is no privity of contract. 
A) can sue the motorcycle manufacturer even though he does not have privity. 
B) cannot sue the motorcycle manufacturer because his injuries are personal injuries as opposed to economic loss. 
C) cannot sue the motorcycle manufacturer because the law requires arbitration. 
D) cannot sue the motorcycle manufacturer because there is no privity of contract.

Question 4

Baker Furniture sold 50 living room sets to King's Department Store.The parties did not agree on passage of title,but the delivery term was F.O.B.place of shipment.Discuss title and risk of loss regarding the furniture.

Accepted Answer

Since the goods are to be moved,title pa

Question 5

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 6

Imogene takes her diamond solitaire ring to Sparkle Jewelry Shop to have the prongs holding the diamond retipped and the ring cleaned.The clerk at Sparkle tells her 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 was 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 was responsible for investigating the merchant's integrity before leaving her property.

Question 7

You leave your watch with Bryte Jewelers for repair.Bryte cannot transfer ownership interests in the watch to a customer of the jewelry shop without your permission.

Accepted Answer

A) True 
 B)False

Question 8

Both the buyer and seller may have an insurable interest in the same goods at the same time.

Accepted Answer

A) True 
 B)False

Question 9

In a breach of warranty case,the buyer must

Accepted Answer

A) notify the seller of defects within a reasonable time. 
B) bring any lawsuit no later than three years after the defect was discovered. 
C) extend the statute of limitations in writing rather than orally if he chooses to allow a longer time for bringing suit. 
D) notify the seller of defects within six months of his discovery or he cannot bring a lawsuit. 
A) notify the seller of defects within a reasonable time. 
B) bring any lawsuit no later than three years after the defect was discovered. 
C) extend the statute of limitations in writing rather than orally if he chooses to allow a longer time for bringing suit. 
D) notify the seller of defects within six months of his discovery or he cannot bring a lawsuit.

Question 10

A buyer obtains an insurable interest when the goods are identified to the contract.

Accepted Answer

A) True 
 B)False

Question 11

A common problem in cases of express warranty is being able to separate statements that create express warranties from statements that do not.Discuss what type of statements create an express warranty and four indications that a statement is likely to create an express warranty.

Accepted Answer

Any affirmation of fact,or any promise,c

Question 12

Crytrin Manufacturing,Inc.contracted with Molfry,Inc.to manufacture three large pieces of equipment.The contract contained a clause stating that Crytrin agreed to repair or replace any defective equipment,but that was the only remedy Molfry would have.This clause

Accepted Answer

A) is an effective disclaimer. 
B) will not keep Molfry from obtaining consequential damages since,under the UCC,consequential damages cannot be excluded. 
C) is a limitation of remedy clause,which limits or excludes normal remedies permitted under the UCC. 
D) limits any express warranties made by Crytrin. 
A) is an effective disclaimer. 
B) will not keep Molfry from obtaining consequential damages since,under the UCC,consequential damages cannot be excluded. 
C) is a limitation of remedy clause,which limits or excludes normal remedies permitted under the UCC. 
D) limits any express warranties made by Crytrin.

Question 13

When neither party has breached the contract,the risk of loss generally passes from seller to buyer when the seller has transported the goods as far as he is obligated to.

Accepted Answer

A) True 
 B)False

Question 14

A statement that a particular warranty does not apply is called a(n)

Accepted Answer

A) disclaimer. 
B) infringement. 
C) limitation of remedy clause. 
D) voidable title. 
A) disclaimer. 
B) infringement. 
C) limitation of remedy clause. 
D) voidable title.

Question 15

The buyer of a product is located in Des Moines,Iowa,and the seller is located in Sacramento,California.The contract specifies F.O.B.Des Moines.What type of contract is this?

Accepted Answer

A) destination contract 
B) mixed contract 
C) shipment contract 
D) carrier contract 
A) destination contract 
B) mixed contract 
C) shipment contract 
D) carrier contract

Question 16

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 dress 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 dress watch that does not keep accurate time after getting wet

Question 17

Tu-thumbs buys a used paint sprayer from the local paint store.The sprayer had a large sign on it that said "AS IS." The dealer made no promises or statements concerning the performance of the paint sprayer.When Tu-thumbs attempts to spray paint his house,the trigger on the sprayer sticks in the "on" position and before Tu-thumbs can pull the electrical cord to cut the power,paint is sprayed all over his prize Borzoi dog that is scheduled to be shown in a dog show the next day.Tu-thumbs sues the dealership.Who wins?

Accepted Answer

A) Dealer wins;there were no express warranties,and all implied warranties have been successfully disclaimed. 
B) Tu-thumbs wins;he can recover on the basis of express warranties. 
C) Tu-thumbs wins;he can recover on the basis of the implied warranty of merchantability because the word "merchantability" was not used in the disclaimer. 
D) Dealer wins;even though there were implied warranties,the damage to the dog could not have been foreseen. 
A) Dealer wins;there were no express warranties,and all implied warranties have been successfully disclaimed. 
B) Tu-thumbs wins;he can recover on the basis of express warranties. 
C) Tu-thumbs wins;he can recover on the basis of the implied warranty of merchantability because the word "merchantability" was not used in the disclaimer. 
D) Dealer wins;even though there were implied warranties,the damage to the dog could not have been foreseen.

Question 18

Ruppart Manufacturing has a contract for the sale of 100 cases of teaching supplies to Teachers Co-op,Inc.Payment of the order is to be made in installments over the next year.Ruppart Manufacturing keeps a security interest in the cases sold to assure payment by Teachers Co-op,Inc.When the order is completed,Ruppart ships the order.Legally

Accepted Answer

A) both Ruppart and Teachers have an insurable interest in the supplies. 
B) only Ruppart has an insurable interest in the supplies. 
C) only Teachers has an insurable interest in the supplies. 
D) neither Ruppart nor Teachers has an insurable interest in the supplies. 
A) both Ruppart and Teachers have an insurable interest in the supplies. 
B) only Ruppart has an insurable interest in the supplies. 
C) only Teachers has an insurable interest in the supplies. 
D) neither Ruppart nor Teachers has an insurable interest in the supplies.

Question 19

Alice's Aspirin Inc.produces and packages aspirin for sale to retail stores.Bob buys a bottle of Alice's aspirin at Dahl's Food Stores.Two days later Bob takes two aspirin and within minutes,becomes very ill and is rushed to the hospital,where it is found that a defect in the aspirin caused the reaction.Which of the following is correct?

Accepted Answer

A) Bob can sue both Alice's Aspirin Inc.and Dahl's because he suffered personal injury due to the defective product. 
B) Bob cannot sue anyone because he assumed the risk of taking the aspirin. 
C) Bob cannot sue anyone because he is not in privity with Dahl's or Alice's. 
D) Bob can sue but will not be able to recover consequential damages for his medical expenses. 
A) Bob can sue both Alice's Aspirin Inc.and Dahl's because he suffered personal injury due to the defective product. 
B) Bob cannot sue anyone because he assumed the risk of taking the aspirin. 
C) Bob cannot sue anyone because he is not in privity with Dahl's or Alice's. 
D) Bob can sue but will not be able to recover consequential damages for his medical expenses.

Question 20

Angela uses fraudulent means to induce Walter to enter a sales contract.Angela obtains a voidable title to the goods.

Accepted Answer

A) True 
 B)False

Exam 22: Ownership, Risk and Warranties

The statute of limitations for breach of warranty under the UCC is

Implied warranties are created by

Bill is injured when his new motorcycle speeds out of control because of a defective part.In most jurisdictions,Bill

Baker Furniture sold 50 living room sets to King's Department Store.The parties did not agree on passage of title,but the delivery term was F.O.B.place of shipment.Discuss title and risk of loss regarding the furniture.

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.

You leave your watch with Bryte Jewelers for repair.Bryte cannot transfer ownership interests in the watch to a customer of the jewelry shop without your permission.

Both the buyer and seller may have an insurable interest in the same goods at the same time.

In a breach of warranty case,the buyer must

A buyer obtains an insurable interest when the goods are identified to the contract.

A common problem in cases of express warranty is being able to separate statements that create express warranties from statements that do not.Discuss what type of statements create an express warranty and four indications that a statement is likely to create an express warranty.

Crytrin Manufacturing,Inc.contracted with Molfry,Inc.to manufacture three large pieces of equipment.The contract contained a clause stating that Crytrin agreed to repair or replace any defective equipment,but that was the only remedy Molfry would have.This clause

When neither party has breached the contract,the risk of loss generally passes from seller to buyer when the seller has transported the goods as far as he is obligated to.

A statement that a particular warranty does not apply is called a(n)

The buyer of a product is located in Des Moines,Iowa,and the seller is located in Sacramento,California.The contract specifies F.O.B.Des Moines.What type of contract is this?

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

Angela uses fraudulent means to induce Walter to enter a sales contract.Angela obtains a voidable title to the goods.

Introduction to Law

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International Law

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Introduction to Contracts

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Voidable Contracts: Capacity and Consent

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Introduction to Sales

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