Exam 21: Warranties

The Magnuson-Moss Warranty Act does not govern warranties of commercial or industrial transactions.

A warranty in which the seller warrants that he or she has valid title to the goods he or she is selling and that the transfer of title is rightful is known as a warranty ________.

Joe's Alternative Realty leased a piece of real estate to WideEye Builders. While still on lease, Joe's Alternative Realty gave that same piece of real estate as security interest to procure a loan from Cloudnine Bank. The real estate, which was collateral, was eventually repossessed by the bank from WideEye Builders, after Joe's Alternative Realty defaulted on their loan payment. What warranty had Joe's Alternative Realty breached with WideEye?

Which of the following would constitute the creation of an express warranty for goods?

Written disclaimers must be conspicuously displayed to be valid.

Sam expressed an interest in buying a painting from Jasper, who claimed that the painting was a family heirloom. Jasper's asking price was $15,000, but Sam was only willing to offer $13,000. Jasper told him that it was a very old painting worth a fortune and that others would gladly pay $20,000 for it. He also told him that he was only selling it under its market value because he needed the money immediately. He then implied that Sam could sell it for a higher rate if he wanted. In legal terms, Jasper's words to Sam would be considered as ________.

What of the following is true of an "as is" disclaimer?

To be effective, a disclaimer of the implied warranty of merchantability must specifically mention the term merchantability.

Which of the following is true of express warranties?

Express warranties must contain the word "express" in writing to be legitimate.

Which of the following is NOT one of the three most common forms of implied warranties?

A full warranty is an example of a(n) ________.

The Magnuson-Moss Warranty Act does not require a seller or lessor to make an express written warranty.

StoryBoard Creatives approached Logos Studios with a script for a movie. Logos Studios liked the script, and bought the rights for the script from StoryBoard. Subsequently, Mr. Simpson, a former employee of StoryBoard claimed that he had the copyright to that script. Mr. Simpson proved his copyright in court. He then notified Logos Studios that they could not start production on the script without his permission, and adequate payment of fees. Logos Studios then rescinded the contract with StoryBoard based on the breach of ________.

Which of the following is true of the Magnuson-Moss Warranty Act?

The implied warranty of merchantability warrants that goods must be fit for the ordinary purposes for which they are used.

A disclaimer of the implied warranty of fitness for a particular purpose may be oral.

Written disclaimers must be conspicuously displayed to be valid, meaning these disclaimers must be noticeable to a reasonable person.

Under the consumer expectation test, if a person were injured by eating a nail in a cherry pie, then the implied warranty would be breached.

The warranty of no interference warrants that goods sold are free from any third-party security interests, or encumbrances that are unknown to the buyer.