ALLIED BUS230 MODULE 7 check your understanding

Question Points
1. In a sale
of goods, the use of the term “AS IS” indicates:
a. to the buyer that
there are no implied warranties upon which the buyer may depend.
b. that in a sale
the seller warrants that the goods are merchantable.
c. to the buyer that
a sales contract needs no consideration.
d. that the sale
includes most implied warranties.
2. When a
buyer breaches a sales contract by refusing to accept conforming goods, a
common remedy of the seller is to:
a. exercise the
right of replevin.
b. demand specific
performance.
c. sue for
nondelivery.
d. resell the goods.
3. If the
seller breaches a sales contract, the buyer may:
a. sue for damages.
b. sue for specific
performance.
c. cancel the
contract and cover.
d. all of the
choices apply.
4. A buyer
is insolvent under the UCC when he or she:
a. will not pay
debts as they become due.
b. cannot pay debts
when they become due.
c. wrongfully
repudiates a contract.
d. cannot exercise
the right of replevin.
5. The
implied warranty of merchantability does not apply in which of these
situations:
a. in a sale of
goods by a non-merchant.
b. when food or
drink is considered in a restaurant.
c. when a merchant
is selling to another merchant.
d. when goods are of average quality.
6. A
warranty given by the seller after the sale:
a. is valid.
b. is unenforceable.
c. must be
accompanied by consideration.
d. must be written.
7. If a
breach of warranty occurs:
a. the sales
contract is discharged.
b. the buyer may sue
for damages.
c. the seller must
return the purchase price.
d. none of the
choices apply.
8. The test
of merchantability in the case of foods is generally what a reasonable person
can expect to find in the food. Which of the following would most likely show a
breach of this warranty?
a. A cherry pit in a
piece of cherry pie.
b. A chicken bone in
a chicken sandwich.
c. A fish bone in a
bowl of vegetable soup.
d. A grapefruit seed
in a glass of grapefruit juice.
9. Suing
under the negligence theory of product liability is often an unsatisfactory
remedy for the injured plaintiff to pursue because proving specific acts of
negligence on the part of the defendant is difficult.
a. True
b. False
10. A warranty
must be written.
a. True
b. False
11. A
statement of fact made by the seller to induce the buyer to purchase goods is:
a. puffing.
b. an express warranty.
c. an implied
warranty.
d. an advertisement.
12. To avoid
implied warranties in the sale of goods to a consumer, the seller should make
it absolutely clear (as for example a written statement) that the goods are
sold:
a. with no known
defects.
b. in A-1 condition.
c. “AS
IS.”
d. as merchantable
only.
:Identify types of warranty, the implications of exclusion,
and breach of warranty.
1
13. The seller
has the right to cure the defect of any nonconforming goods that the buyer
rejects.
a. True
b. False
14. Grill
Lovers, a Manufacturing Co. that makes gas grills for outdoor cooking, sold
several of its grills to Premier Home Company located in a large city. Ferris,
who purchased a gas grill from Premier, was seriously injured while grilling
steaks outside for a family outing. The injury resulted from a manufacturing
defect in the gas line which caused an explosion as he was cooking over the
grill. In order to be successful in his lawsuit, which is based on strict
liability, Ferris must present proof that:
a. he was in privity
of contract with Premier Home Company.
b. grill Lovers had
a duty to sell a safe product and that the product purchased was not safe.
c. a warranty
existed on the product and that there was a breach of warranty by Grill Lovers.
d. the product was
unreasonably dangerous when it left the manufacturer’s or other seller’s
control and that he suffered an injury.
15. One remedy
that is not available to a seller is:
a. suing for breach
of warranty.
b. stopping the
goods in transit.
c. reclaiming the
goods.
d. rescinding the
contract.
16. The
following statement was printed on a tag attached to an electric clock:
“Warranted for one year from date of purchase against original factory
imperfections in materials and workmanship.” This warranty statement on
the tag represents an:
a. express warranty
as to quality.
b. express warranty
of title.
c. implied warranty
as to freedom from defects.
d. implied warranty
of fitness for purpose.
17. Remedies
for breach of sales contract under the UCC are available only to the buyer.
a. True
b. False
.

18. Under
Article 2 of the UCC goods sold by merchants may be covered by a warranty. An
example of an express warranty would be a warranty of:
a. fitness for a
purpose.
b. merchantability.
c. conformity to the
description of the purchased goods.
d. conformity to
those goods purchased according to usage in the trade.

19. Remedies
for breach of contract may be included in the sales contract.
a. True
b. False
20. A buyer’s
basic duty under a sales contract includes the obligation to:
a. accept
nonconforming goods.
b. insist upon
delivery of the goods.
c. “cure.”
d. accept conforming
goods and pay for them.