REG 9 - UCC Article 2 - Sales 2 - Performance/Non-Performance Flashcards Preview

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Flashcards in REG 9 - UCC Article 2 - Sales 2 - Performance/Non-Performance Deck (11):
1

Under the Sales Article of the UCC, which of the following statements is correct regarding the creation of express warranties?
A. Express warranties must contain formal words such as warranty or guarantee.
B. Express warranties must be part of the basis of the bargain between buyer and seller.
C. Express warranties are not enforceable if made orally.
D. Express warranties cannot be based on statements made in the seller's promotional materials.

B. In addition to being statements of fact or promises of performance, whatever is stated or written must be important to the buyer in making the decision to buy.

2

On May 2, Handy Hardware sent Ram Industries a signed purchase order that stated, in part, as follows:

"Ship for May 8 delivery 300 Model A-X socket sets at current dealer price. Terms 2/10/net 30."

Ram received Handy's purchase order on May 4. On May 5, Ram discovered that it had only 200 Model A-X socket sets and 100 Model W-Z socket sets in stock. Ram shipped the Model A-X and Model W-Z sets to Handy without any explanation concerning the shipment. The socket sets were received by Handy on May 8.

Assuming a contract exists between Handy and Ram, which of the following implied warranties would result?

I. Implied warranty of merchantability.
II. Implied warranty of fitness for a particular purpose.
III. Implied warranty of title.

I and III. The implied warranty of merchantability made by a merchant seller warrants that the goods are fit for their normal, intended purpose. The implied warranty of title assures the buyer that the seller has title to the goods and therefore has the right to sell them. Both of these warranties attach automatically upon the formation of the sales contract.

The warranty of fitness for a particular purpose arises only when the seller knows of the buyer's use and that the buyer is relying on the seller's expertise to select goods that the buyer can use for that specific purpose. There is nothing in this question to indicate that Handy is making such a reliance.

3

Morgan is suing the manufacturer, wholesaler, and retailer for bodily injuries caused by a power saw Morgan purchased.
Which of the following statements is correct under the theory of strict liability?
A. The manufacturer will avoid liability if it can show it followed the custom of the industry.
B. Morgan may recover even if he cannot show any negligence was involved.
C. Contributory negligence on Morgan's part will always be a bar to recovery.
D. Privity will be a bar to recovery insofar as the wholesaler is concerned if the wholesaler did not have a reasonable opportunity to inspect.

B. A merchant seller is strictly liable for injuries caused by products they sell being used in their intended fashion. Strict liability means that they are responsible to pay damages no matter how much fault they share. Contributory negligence on Morgan's part will not bar recovery. Morgan does not have to show that any of the defendants acted negligently or unreasonably.

4

Under the UCC Sales Article, an action for breach of the implied warranty of merchantability by a party who sustains personal injuries may be successful against the seller of the product only when
A. The seller is a merchant of the product involved.
B. An action based on negligence can also be successfully maintained.
C. The injured party is in privity of contract with the seller.
D. An action based on strict liability in tort can also be successfully maintained.

A. To win a case under a breach of the implied warranty of merchantability, the plaintiff must show that a merchant sold the goods and that a breach of this warranty was the cause of an injury suffered.

5

Under the Sales Article of the UCC, most goods sold by merchants are covered by certain warranties.

An example of an express warranty would be a warranty of
A. Usage of trade.
B. Fitness for a particular purpose.
C. Merchantability.
D. Conformity of goods to sample.

D. There are three types of express warranty under the Sales Article of the UCC (if made as part of the bargain or sale), they are:

1. Affirmations of fact or promises
2. Description of the goods
3 Sample or model - Bulk will conform exactly to the sample.

The UCC gives the buyer (unless disclaimed by the seller) certain implied warranties. Three of those implied warranties are the implied warranty of fitness for a particular purpose, the implied warranty of merchantability, and the implied warranty of the usage of trade. A sale by use of a sample is an express warranty the goods received conform to the sample.

6

Under the UCC Sales Article, the warranty of title may be excluded by
A. Merchants or non-merchants provided the exclusion is in writing.
B. Non-merchant sellers only.
C. The seller's statement that it is selling only such right or title that it has.
D. Use of an "as is" disclaimer.

C. A specific disclaimer that the seller is only passing what right or title seller has disclaims the implied warranty of title.

7

Under the UCC Sales Article, the implied warranty of merchantability
A. May be disclaimed by a seller's oral statement that mentions merchantability.
B. Arises only in contracts involving a merchant seller and a merchant buyer.
C. Is breached if the goods are not fit for all purposes for which the buyer intends to use the goods.
D. Must be part of the basis of the bargain to be binding on the seller.

A. An implied warranty of merchantability can be disclaimed either orally or in writing, but the disclaimer must include the word merchantability and, if in writing, this must be conspicuous.

8

T/F: A buyer who actually examines goods prior to a sale is bound by all defects found and all defects he or she should have found.

True

9

T/F: A seller's affirmation that a used truck is in A-1 condition is an express warranty under the Uniform Commercial Code.

False.
Statements of value or opinion are not express warranties.
A description of the goods. Samples or models. These are all express warranties under UCC article 2.

10

T/F: A sale advertised "as is" is a sale in which both the implied warranty of fitness for a particular purpose and the implied warranty of merchantability are disclaimed.

True
Same if in a written contract as well.

11

T/F: Advertisements or brochures that contain affirmations of facts or promises can be express warranties.

True

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