East Mississippi Community College

ECON 2123

Chapter 25-PRODUCT LIABILITY: WARRANTIES AND TORTS

TRUE/FALSE

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

2. The right to sue for damages sustained from a defective product is reserved exclusively to the buyer of such goods.

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

4. Plaintiffs suing for damages caused by a defective product are limited to taking action only against the manufacturer(s) of such goods.

5. An express guarantee is governed by the UCC, and warranties are governed primarily by the common law of contracts.

6. An express warranty is basically any statement of fact or promise made about the goods that becomes part of the basis of the bargain.

7. A statement by a seller relating to goods that is part of the basis of the bargain is an express warranty.

8. It is necessary to the creation of an express warranty that the seller use formal words such as “warrant” or “guarantee.”

9. Express warranties may be made before, during, but not after the sale of goods.

10. An express warranty can be made orally or in writing.

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

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

13. No law requires a seller to make an express warranty.

14. Any warranty that does not provide the complete protection of a full warranty is called a warranty in breach.

15. A seller cannot be held liable for the breach of an express warranty if the seller honestly believed that the warranted statement was true.

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

17. The scope of warranties remains the same regardless of whether the seller is a merchant or a casual seller.

18. If a lawn mower will not cut any type of grass, there is a breach of the warranty of merchantability, even if the warranty was conspicuously disclaimed.

19. If a seller sells an automobile to a buyer and then delivers the car with an outstanding lien on it that was unknown to the buyer at the time of the sale, there is a breach of the implied warranty of merchantability.

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

21. A merchant has greater potential warranty liability than does a casual seller.