Ch20 - Chapter 20 WARRANTIES AND PRODUCT LIABILITY Practice Test 1 CPA QUESTION Vick bought a used boat from Ocean Marina that disclaimed any and

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Chapter 20 WARRANTIES AND PRODUCT LIABILITY Practice Test 1. CPA QUESTION Vick bought a used boat from Ocean Marina that disclaimed “any and all warranties.” Ocean was unaware the boat had been stolen from Kidd. Vick surrendered it to Kidd when confronted with proof of the theft. Vick sued Ocean. Who prevails? (a) Vick, because the implied warranty of title has been breached (b) Vick, because a merchant cannot disclaim implied warranties (c) Ocean, because of the disclaimer of warranties (d) Ocean, because Vick surrendered the boat to Kidd (a). CPA Examination, May 1994, #43. 3. Leighton Industries needed steel pipe to build furnaces for a customer. Leighton sent Callier Steel an order for a certain quantity of “A 106 Grade B” steel. Callier confirmed the order and created a contract by sending an invoice to Leighton, stating that it would send “A 106 Grade B” steel, as ordered. Callier delivered the steel and Leighton built the furnaces, but they leaked badly and required rebuilding. Tests demonstrated that the steel was not, in fact, “A 106 Grade B,” but an inferior steel. Leighton sued. Who wins? The one-line description of the steel, in Callier's invoice, created an express warranty. Assuming that
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This note was uploaded on 06/17/2011 for the course BUSINESS A ACG2071 taught by Professor Danso during the Spring '09 term at Palm Beach Community College.

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Ch20 - Chapter 20 WARRANTIES AND PRODUCT LIABILITY Practice Test 1 CPA QUESTION Vick bought a used boat from Ocean Marina that disclaimed any and

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