Exam 23: Warranties and Product Liability

Mountain Bikes, Inc. (MBI), and Nero enter into a contract for a sale of a mountain bike. MBI, a merchant who deals in goods of the kind sold, makes implied and express warranties in connection with the sale. The Magnuson-Moss Warranty Act attempts to prevent deception in warranties by

In sales law, a warranty is an assurance by one party of the existence of a fact on which the other party can rely.

GR8 Skates Company makes and sells a pair of skates to Hugh. GR8 fails to exercise "due care" to make the skates safe, and Hugh is injured as a result. GR8 is most likely liable for

Privity of contract between the plaintiff and the defendant is required to bring a product liability suit based on any theory.

A Coastal Railroad train's brakes malfunction and it rolls towards main?te?nance workers on the tracks. Everyone gets out of the way except Dick, who wants to show off. The train hits Dick, who sues Eagle, Inc., the brakes' manufacturer. Eagle can raise the defense of

Navigation, Inc., makes aviation guidance systems. Ollie is in?jured in a crash caused by a defective Navigation product. A statute re?stricts the time within which Ollie may file a product liability suit against Navigation regardless of when he was injured. This is a statute of

Only the manufacturer of a defective product can be strictly liable for an injury or damage caused by the product.

Trucks & Trailers, Inc. (T&T), and United Delivery Service enter into a contract for a lease of trucks. T&T is a merchant who deals in goods of the kind leased. Under the UCC, an implied warranty of merchantability arises

A public policy underlying the imposition of strict product liability is that a manufacturer who makes an unsafe product should be put out of business.

A manufacturer's liability to an injured party on a strict product liability theory is limited to a refund or a replacement of the defective product.

Sweet Candy, Inc., and Tasty Treats Stores enter into a contract for a sale of candy. Sweet, a merchant who deals in goods of the kind sold, makes express warranties in connection with the sale. Under the UCC, at the time a contract is formed, an express warranty can be disclaimed or modified

A seller must warn those who buy a product of harm that could result from the foreseeable misuse of the product.

Good Tire Company and Hiway Auto Service enter into a contract for a sale of tires. Good Tire is a merchant who deals in goods of the kind sold. Under the UCC, an implied warranty of merchantability arises

An inadequate warning is not a product defect that will support the imposition of liability on a strict product liability basis.

Fact Pattern 23-B1 HiDef, Inc., a television set maker, provides a limited warranty on its com?puters in a contract that includes an "informal dispute settlement proce?dure" clause. Ike buys an HiDef computer, which soon malfunctions. After several unsuc?cessful repair attempts, Ike files a suit against HiDef, seeking damages under the Magnuson-Moss Warranty Act. -Refer to Fact Pattern 23-B1. Suppose that the dispute-resolution clause in HiDef's contract calls for binding arbitration. A court is most likely to order

Merchants are required to warrant that the goods they sell are fit for their ordinary purpose.

City Car Company and Dave's Autos enter into a contract for a sale of motor vehicles. City assures Dave's that it has valid title to the vehicles. Under the UCC, a warranty of title arises

Sari buys a new sport utility vehicle (SUV) from Terrific Cars & Trucks, Inc. The most important factor in determining whether an ex?press war?ranty is created is whether

Delta Company makes and sells table saws, which are designed to be safe if used properly. Erin buys a Delta saw and lends it to her neighbor Frank. To reach a toolbox on a high shelf in his garage, Frank props the saw at an angle against a cabinet and climbs onto the saw. Frank loses his footing, slips off the saw, falls on the blade, and is injured. He files a product liability suit against Delta, on the ground of negligence. On what basis could Delta prevail?

Imported Carpets Store and Jill enter into a contract for a sale of an Oriental rug. Imported Carpets, a merchant who deals in goods of the kind sold, generally describes the goods, details technical specifications, and shows a sample. Under the UCC, if these are inconsistent