Mann_BLRB 9_TB_Ch22

Business Law and the Regulation of Business

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Chapter 22—Product Liability: Warranties and Strict Liability TRUE/FALSE 1. Jared drives his car knowing that the brakes are defective and has an accident in which the car is dam- aged and he is injured. He will likely be barred from suing the manufacturer, because he voluntarily assumed the risk of the defective brakes. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 2. An express warranty requires that the warranty be expressed in words. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 3. Fitness for a particular purpose and merchantability are implied warranties that apply only to sales by commercial vendors. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 4. The Code does not label the warranty of title as an implied warranty, despite the fact that it arises out of the sale and not from the words or conduct of the parties. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 5. Bradley buys a television set that turns out to be stolen. He can sue the seller for breach of warranty. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 6. The Code requires that the affirmations, promises, or descriptions the seller makes be relied on by the buyer to be an express warranty. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 7. The word "merchantability" must be mentioned in a disclaimer of an implied warranty of merchantab- ility. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 8. Jennifer purchased a used refrigerator from her next-door neighbor, a mail carrier. When she took it home and plugged it in, the refrigerator burst into flames. The seller in this case is in breach of the im- plied warranty of merchantability. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 9. The warranty of merchantability is found in Section 402A of the Restatement of the Law of Torts. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 10. Contributory negligence is a defense to a warranty of merchantability cause of action. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic
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11. Section 402A of the Restatement applies only if the defective product is unreasonably dangerous. ANS: T TOP: AICPA BB-Legal MSC: AACSB Analytic 12. Barry buys a car from a dealer, which is sold to him "as is" and "with all faults." The next day, the en- gine blows up. Barry can sue the dealer for breach of the implied warranty of fitness. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 13. If the exclusion of a warranty of merchantability is printed in fine print on the back of a form, because that way no one will be able to read it, the exclusion is valid. ANS: F TOP: AICPA BB-Legal MSC: AACSB Analytic 14. Ed buys a car from a friend "as is." The friend tells him, "In my opinion, this car is in excellent mech- anical condition." The friend has made an express warranty. ANS: F
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Mann_BLRB 9_TB_Ch22 - Chapter 22-Product Liability:...

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