Business Law II BA 304-01: N/A
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Chapter 25 - Product Liability: Warranties and Torts - Review

<< Back to Chapter 25 - Product Liability: Warranties and Torts

1) Privity of contract is the relationship between the promisor and the promisee.

2) If the theory of privity of contract still applied, it would be difficult for purchasers injured by defective goods to sue manufacturers.

3) The requirement of privity of contract to allow recovery in a sales contract has been widely rejected.

4) The concept of strict tort liability was created by recent court decisions.

5) Only the parties to a sales contract could sue each other, under the traditional concept of privity of contract.

6) The defendant in a defective product suit may be the seller, the manufacturer, and the manufacturer of a component part.

7) Warranty is a promise either express or implied about the nature, quality, or erfpormance of the goods.

8) It is immaterial whether the express warranty is made at the time of the sale or after the sale.

9) A warranty made after a sale may be considered a modification of the sales contract.

10) If a warranty made after a sale is a modification of the sales contract, no additional consideration is required.

11) In a full warranty is the seller obligated to fix or replace a defective product within a reasonable time at no cost to the buyer.

12) The federal regulation of express warranties requires a warranty to be denominated as either full or limited.

13) A warranty is limited if only the original buyer is covered by the warranty, the buyer is required to fill out and return a warranty registration card shortly after the purchase for the warranty to be effective, and it covers only part of the product purchased.

14) If an express warranty is false, then the breach of warranty renders the seller liable just as if the truth of the warranty had been guaranteed.

15) In most instances, the mere fact that a sale was made gives rise to an implied warranty. An implied warranty is a warranty that was not made, but implied by law.

16) By the mere act of selling, a warranty is made that the seller's title is good and the transfer is rightful.

17) Fitness for a particular purpose warranty is created when the buyer relies on the seller to pick out the goods that the buyer requires to meet a stated need.

18) The warranty of merchantability guarantees that the product is fit for its normal use at the time of the sale.

19) The most careful seller in the world can be liable for a breach of warranty.

20) An express warranty arises when goods are purchased based on a catalog illustration.

21) A seller's opinion cannot ordinarily be treated as a warranty.

22) No law requires a seller to make an express warranty.

23) Whenever a sale of goods is made, certain warranties are implied unless they are expressly excluded.

24) A warranty against encumbrances is not concerned with an encumbrance that existed before or at the time the sale was made.

25) When a buyer makes a purchase without relying on the seller's skill and judgment, no warranty of fitness for a particular purpose exists.

26) A merchant has greater warranty liability than does a casual seller.

27) Unless otherwise agreed, every merchant seller warrants that goods are sold free of any rightful claim by any third party.

28) The United Nations Convention on Contracts for the International Sale of Goods (CISG) provides for the warranties of merchantability and of fitness for a particular purpose.

29) If there is a written contract, a disclaimer of the implied warranty of merchantability must be conspicuous.

30) An exclusion of warranties made in the manner specified by the Uniform Commercial Code is not unconscionable.

31) The warranty provisions under the CISG as compared to the provisions of the UCC are in most cases identical.

32) A disclaimer or exclusion of the warranty of merchantability will be invalid when it is contained in a writing and is not conspicuously set forth.

33) An examination of goods excludes any implied warranty with respect to a defect that is apparent after a reasonable examination is made.

34) The UCC expressly preserves the pre-Code law as to fraud.

35) Unreasonably dangerous defects in goods that cause harm must be proven by a plaintiff to recover for strict liability in tort.

36) Strict tort liability is applied independently of the UCC, without regard to privity of contract, and despite negligence on the part of the plaintiff.

37) With used or secondhand goods, what is fit for normal use will be a lower standard than with new goods.

38) Negligence is the failure to exercise due care under the circumstances that results in harm proximately caused to oneowed a duty to exercise due care.

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