Answers to Chapter 4 Exam

Answers to Chapter 4 Exam - Adam steals from Business...

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Adam steals from Business Resources, Inc., ten computer hard drives, whichAdam sells to Computer Products Corporation (CPC). Unaware that the drives are stolen, CPC reconditions them and sells them to Direct Marketers, Inc. With the reconditioned drives, CPC gives Direct Marketers a written statement that disclaims “any and all warranties.” Business Resources learns that Direct Marketers has the drives and demands their return. Direct Marketers gives the equipment to Business Resources and files a suit against CPC. Will Direct Marketers succeed in its suit? Why or why not? ANSWER: Yes, Direct Marketers will succeed in its suit against CPC. Every contract for a sale of goods warrants that the title is good and its transfer is proper. This warranty of title arises automatically. The warranty can be excluded or modified only by a specific written statement or by circumstances that give the buyer reason to know that the transferor does not have title to the goods.
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