Q&A Hero

Q: A person who holds all rights in property owns the prop­erty in fee simple.

Q: Fun Toyz Corporation makes skateboards, which it sells to con­sumers, including Holly and Ira. Due to a defect, Holly is injured while using her new board. Ira's board has the same defect, but he is not injured. In a product liability suit based on strict product liabil­ity, Fun Toyz may be liable to a. Holly and Ira. b. Holly only. c. Ira only. d. no one.

Q: A blank indorsement specifies no particular indorsee.

Q: An unlimited number of persons can hold property as joint tenants.

Q: The recipient of a negotiable instrument becomes a holder regardless of the form of the transfer.

Q: Cold Stuf, Inc., makes snowboards, which it sells to Deep Freeze Sports Store (DFS). DFS sells Cold Stuf boards to consumers, in­cluding Ed. Ed is in­jured while using the board. In a product liabil­ity suit based on strict li­ability, Ed may recover from a. Cold Stuf only. b. Cold Stuf or DFS. c. DFS only. d. no one.

Q: Only two persons can hold property as tenants in common.

Q: A transfer by negotiation can make it possible for a holder to receive more rights in the instrument than its prior possessor had.

Q: Paltry Assembly Company makes espresso machines and sells one to Vim through a misrepresentation on the label on which Vim relies and that results in an injury to Vim. Paltry is most likely liable for a. a commonly known danger. b. fraud. c. privity. d. puffery.

Q: Tangible personal property represents a set of rights and interests but has no real physical substance.

Q: An instrument payable "with interest" must specify a particular rate to be negotiable.

Q: Garden Tool Company makes hedge trimmers. Troy is injured while using a Garden Tool trimmer and sues the company for product liability based on neg­ligence. To win, Troy must show that a. Garden Tool did not use due care with respect to the trimmer. b. Garden Tool misrepresented a material fact regarding the trimmer. c. Troy was experienced in the use of trimmers. d. Troy was in privity of contract with Garden Tool.

Q: Frenchy's Fast Fries (3F) requires that its employees wear uniforms and protective clothing while on the job. 3F provides a locker room for the employees to leave their street clothes and personal items while working. A sign on the back of the locker room door states, "Frenchy's is not re­sponsible for the loss of any property in the locker room." Grant, a 3F employee, changes his clothes in the locker room before starting work and leaves his wallet and watch in a pocket of his jacket hanging in his locker. When he returns after his shift, the wallet and watch are gone. Does Grant's leaving personal items in the locker room constitute a bailment? If so, what type of bailment? If not, what legal relationship is it? Does 3F's sign exculpate the com­pany for Grant's loss? Why or why not?

Q: Forest & Field Company makes and leases a backhoe to Zac. Due to a defect attributable to Forest & Field's negligence, Zac is injured in an accident in which his neighbor Aaron is also hurt. In a product liability suit based on negligence, Forest & Field may be liable to a. Aaron only. b. no one. c. Zac and Aaron. d. Zac only.

Q: During a storm on Blue Lake, a boat sinks, but its owner Cappy survives. Cappy plans to return to the site of wreck to salvage its equipment and his possessions, but he delays. Meanwhile, Dick, an amateur diver, discovers the wreck and strips it clean of useful items. Cappy learns of the recovery and files a suit against Dick, claiming that the items are his. Dick responds that the sunken boat was abandoned and therefore he has good title to everything to which he took possession. What is the court likely to rule, and why?

Q: Normally, if the numerical amount and the written amount on a check differ, the words outweigh the figures.

Q: Ceramic Tile Company designs and makes floor tiles. In a product liability suit based on negligence, Ceramic could be liable for vio­lating its duty of care with respect to a. neither the design nor the making of the tiles. b. the design and the making of the tiles. c. the design of the tiles only. d. the making of the tiles only.

Q: Venerable Company stores office furniture with Warehouse Storage, Inc. (WSI), under a contract that limits the warehouse company's liability for lost or damaged property to $500. Venerable declines the option to pay a higher storage rate for an increase in the liability limit. The furniture is lost through no fault of WSI. The loss is most likely suffered by a. Venerable and WSI. b. Venerable only. c. WSI only. d. neither Venerable nor WSI.

Q: A check "payable to the order of bearer" is neither an order instrument nor a bearer instrument.

Q: To be negotiable, an instrument must be payable in money.

Q: Tab stores video equipment with U-Store-It, Inc., under a contract that excuses the warehouser from liability for any damage. A fire due to U-Store-It's negligence destroys the equipment. The loss is most likely to be imposed on a. neither Tab nor U-Store-It. b. Tab and U-Store-It. c. Tab only. d. U-Store-It only.

Q: GR8 Skates Company makes and sells a pair of skates to Hugh. GR8 fails to exercise "due care" to make the skates safe, and Hugh is injured as a result. GR8 is most likely liable for a. assumption of risk. b. knowledgeable use. c. negligence. d. product misuse.

Q: Jack's Pet Houses, Inc. sells shelters for animals under "limited" warranties. Under the Magnuson-Moss Warranty Act, this means that the warranties on shelters from Jack's Pet Houses a. do not meet one of the requirements of a full warranty. b. are only good for one year. c. are illegal. d. are oral.

Q: A conditional promise to pay is not a negotiable instrument.

Q: BroadView Company arranges to have Carrier Corporation, a common carrier, transport 500 DVD players from New York to California. Dan is Carrier's driver. BroadView will have no cause of action against Carrier if Carrier fails to deliver the players on time because a. authori­ties are stopping and searching all trucks entering California. b. Carrier's dispatcher mistakenly delays Dan's departure. c. Carrier's truck is broken into and the players are stolen. d. Dan has to wait two days in Denver for the truck to be repaired.

Q: ValuRich Tools, Inc., sells tools, tool parts, and related supplies under "full" warranties. Under the Magnuson-Moss Warranty Act, this means that ValuRich must provide a. a choice between a refund or replacement if a product cannot be fixed and repair or replacement of defective parts. b. neither a choice of a refund or replacement, or repair of defective parts. c. only a choice of a refund or replacement if a product cannot be fixed. d. only repair or replacement of defective parts.

Q: GR8 Stores, Inc., hires Haul-Way Company, a common carrier, to trans­port fifty large-screen HDTVs from San Diego to Phoenix. En route, a pothole causes the truck to crash, damaging the goods. Liability for the damage most likely rests with a. GR8 Stores and Haul-Way. b. GR8 Stores only. c. Haul-Way only. d. neither GR8 Stores nor Haul-Way.

Q: An order stating "I wish you would pay" is sufficient to create a negotia­ble instrument.

Q: Colby contracts in writing to sell his 2005 Dodge-brand pick-up truck to Efrem for $10,500. Colby agrees to deliver the truck on Friday, and Efrem promises to pay the $10,500 on the following Monday. On Thursday, Efrem tells Colby that he changed his mind and will not buy the truck. Over the weekend, Efrem changes his mind again and tenders $10,500 to Colby on Monday. Colby has not sold the truck to another party but refuses the tender and refuses to deliver. Efrem claims that Colby has breached their contract. Colby contends that Efrem's repudiation released him from his duty to perform under the contract. Who is correct, and why?

Q: Bob rents a golf cart at Country Club Golf Course. The brakes are worn, and while Bob is driving the cart, they fail. The cart crashes into a tree, and Bob is injured. Country Club could have discovered, with rea­sonable diligence, that the brakes were worn. Liability for Bob's injuries most likely rests with a. Bob and Country Club. b. Bob only. c. Country Club only. d. neither Bob nor Country Club.

Q: Signal Sets Company contracts to deliver one hundred 52-inch plasma high-definition television sets to a new retail customer, Tuner TV Store, on May 1, with payment to be made on delivery. Signal tenders delivery in its own truck. Tuner's manager notices that some of the cartons have scrape marks. Tuner's owner phones Signal's office and asks whether the sets might have been damaged as they were being loaded. Signal assures Tuner that the sets are in perfect condition. Tuner tenders Signal a check, which Signal refuses, claiming that the first delivery to new customers is always for cash. Tuner promises to pay the cash within two days. Signal leaves the sets with Tuner, which stores them in its warehouse pending its "Grand Opening Sale" on May 15. Two days later, Tuner's stocker opens some of the cartons and discovers that a number of the sets are damaged beyond ordinary repair. Signal claims Tuner has accepted the sets and is in breach by not paying on delivery. Will Signal succeed on these claims? Explain.

Q: To be negotiable, an instrument must be signed in the lower right-hand corner.

Q: Uri borrows Vera's boat to enjoy for a weekend. Uri negligently runs the boat aground near Water's Edge Beach, damaging the hull. Liable for the cost of repairing the boat is a. Uri and Vera equally. b. Uri only. c. Vera only. d. the owner of Water's Edge Beach.

Q: BBQ, Inc., makes and sells grills to Grill Mart, a retailer, which sells one of the grills to Hope, a consumer. BBQ and Grill Mart include in their contracts a limitation on consequential damages for personal inju­ries arising from a breach of warranty. This is prima facie un­conscionable with respect to a. all of these parties. b. BBQ and Grill Mart, but not Hope. c. Hope only. d. none of these parties.

Q: A certificate of deposit may be negotiable even if it does not contain an express promise to pay.

Q: Stan is liable for the conver­sion of Tyler's business law textbook a. if Tyler proves that the book was in Stan's pos­session when it disappeared. b. if Tyler proves that the book is now in a third party's pos­session. c. if Tyler proves that the book was not in his pos­session when it disappeared. d. under no circumstances.

Q: A signature can consist of initials signed by a party.

Q: Summer Breeze, Inc., contracts for the sale of fifty ceiling fans to Island Décor store. If Summer Breeze fails to deliver the goods, Island Décor must commence a suit for breach of contract within a. four years. b. not more than one year. c. not less than four years. d. thirty days.

Q: Fact Pattern 43-1 Town Transport Company (TTC) agrees to pick up two containers for Unlimited Sales, Inc., and store their contents, to be delivered later. While TTC un­loads one container, the other disappears from TTC's loading dock. Refer to Fact Pattern 43-1. TTC can avoid liability a. by proof that TTC did not convert the goods and was not negligent. b. by proof that TTC's warehouse is located in a high-crime area. c. by proof that Unlimited Sales was negligent in hiring TTC. d. under any circumstances.

Q: Natural Foods, Inc., orders "Grade A" oil from Olive Grove Farms to process and sell to Pic "˜N Pay Grocers. Olive Grove ships "Grade B" oil, which Natural Foods accepts. To recover damages for the nonconformity, Natural Foods must give notice of the breach within a reasonable time to a. Olive Grove only. b. Olive Grove, Pic "˜N Pay, and the appropriate government agency. c. Pic "˜N Pay only. d. the appropriate government agency only.

Q: An instrument is nonnegotiable unless the word "negotiable" is printed on it.

Q: Fact Pattern 43-1 Town Transport Company (TTC) agrees to pick up two containers for Unlimited Sales, Inc., and store their contents, to be delivered later. While TTC un­loads one container, the other disappears from TTC's loading dock. Refer to Fact Pattern 43-1. These facts give rise to a. a presumption of intentional or negligent conversion by TTC. b. a presumption of theft by a third party. c. a presumption of theft by TTC. d. Unlimited Sales's liability for the container's loss.

Q: Leatherbound Stores, Inc., rejects a shipment of goods that does not conform to its contract with Cowhide Corporation, but is unable to obtain instructions from the seller. Leatherbound may a. resell or return the goods only. b. resell or store the goods only. c. return or store the goods only. d. resell, return, or store the goods.

Q: A certificate of deposit is a type of draft.

Q: Ben allows Cody to store his trailer on Ben's property for $20 a month while Cody is out of town. Later, Ben no­tices rainwater collecting in the trailer and covers it with a tarp at a cost of $40. This cost is most likely borne by a. Ben and Cody. b. Ben only. c. Cody only. d. neither Ben nor Cody.

Q: Bayou Boats, Inc., contracts for the sale of seven swamp boats to Eventide Fishing Tours. Bayou repudiates the contract. Eventide's recovery is measured at the time a. Bayou advertised the goods. b. Eventide ordered the goods. c. Eventide learned of the breach. d. Bayou knew that it would repudiate the contract.

Q: A time draft is payable at a definite future time.

Q: Owen takes a Paisley-made pinball machine to Quality Games, Inc., for repair. Lacking certain parts, Quality ships the game to Regal Repair Company. While in Regal's possession, the game is damaged. Quality can recover for the damage from a. no one. b. Owen. c. Paisley. d. Regal.

Q: Sid borrows Tony's paint sprayer to paint his house. Uma allows Vic to store his posthole digger in her shed. The party with a right to use the bailed property is a. neither Sid nor Uma. b. Sid and Uma. c. Sid only. d. Uma only.

Q: Noni and Myra enter into a contract for a sale of clarinets and other wind instruments. Noni does not deliver. Myra can normally recover as damages the difference between a. any loss avoided and any profit gained. b. the actual price and the hoped-for price. c. the contract price and the market price. d. the current prices in the partie' locations.

Q: Bob is shopping in Carl's Hardware Store when a nail gun in use by Dan, one of Carl's employees, fires without warning and hits Bob in the leg. Carl checks the gun and discovers that it was assembled improperly. Bob files a suit against Eagle Tools, Inc., the manufacturer of the gun, for product liability, on the ground of strict liability. What are the elements for an action based on strict liability? In whose favor is the court likely to rule and why?

Q: Cutter Company makes and sells table saws, which are designed to be safe if used properly. Erin buys a Cutter saw and lends it to her neighbor Frank. To reach a toolbox on a high shelf in his garage, Frank props the saw at an angle against a cabinet and climbs onto the saw. Frank loses his footing, slips off the saw, falls on the blade, and is injured. He files a product liability suit against Cutter, on the ground of negligence. On what basis could the maker prevail?

Q: Roy leaves his Honda sport utility vehicle at Sam's Auto Service for an oil change. This is a bailment for a. neither party's benefit. b. the parties' mutual benefit. c. the sole benefit of the bailee. d. the sole benefit of the bailor.

Q: Text Publishers, Inc., contracts for a sale of textbooks to University Bookstores, Inc. Viable Shipping Corporation, the carrier, transports the books to Warehouse Storage Company. Text's right to stop delivery is lost when University's rights to the goods are acknowledged by a. the appropriate government agency. b. the students who opt to buy the books. c. University Bookstores. d. Warehouse Storage.

Q: Gretel, an obese individual, files a suit against Hot n" Tasty, Inc., alleging that its food is unhealthy because, as is well known, it contains high lev­els of salt and sugar. Gretel's suit is most likely to a. fail, because salt and sugar are not unhealthy ingredients in food. b. fail, because the danger is well known to a reasonable consumer. c. succeed, because consumers are not aware of the danger. d. succeed, because the food is most likely a cause of Gretel's obesity.

Q: Hi-Tech Company contracts to sell fiber optic cable to Internet Services, Inc. Hi-Tech may bring an action to recover the purchase price and inci­dental damages if Internet a. accepts the cable and pays for it. b. accepts the cable but does not pay for it. c. rejects the cable. d. revokes acceptance of the cable.

Q: Mona asks Ned if she can store her furniture in his garage while she serves a tour of duty with the U.S. Marines Corps. Ned agrees. This is a bail­ment for a. neither party's benefit. b. the parties' mutual benefit. c. the sole benefit of the bailee. d. the sole benefit of the bailor.

Q: The brakes on a Coastal Railroad train malfunction and it rolls towards main­te­nance workers on the tracks. Everyone gets out of the way except Dick, who wants to show off. The train hits Dick, who sues Everest, Inc., the brakes' manufacturer. Everest can raise the defense of a. a component-part manufacturer. b. assumption of risk. c. consumer participation. d. product misuse.

Q: Ramblin Country Stables contracts to buy 1,000 horseshoes from Blacksmith, Inc., for $1 per shoe. When the market price decreases to 50 cents per shoe, Ramblin refuses to go through with the deal. Blacksmith can recover a. $1,500. b. $1,000. c. $500. d. $0.

Q: Jill loans her laptop to Kyle. This is a bailment for a. neither party's benefit. b. the parties' mutual benefit. c. the sole benefit of the bailee. d. the sole benefit of the bailor.

Q: Garden Field Farms and Haute Gourmet Restaurant, Inc., enter into a con­tract for a sale of lettuce before Haute Gourmet declares bankruptcy. Garden Field can stop delivery of the goods in transit a. only if the quantity is at least a carload. b. only if the quantity is at least a planeload. c. only if the quantity is at least a truckload. d. regardless of the quantity.

Q: Inadvertently, Bret leaves his briefcase at Clean "˜n Dry Launderers when she stops to pick up her clothes. The briefcase is a. abandoned property. b. bailed property. c. lost property. d. mislaid property.

Q: Pharma Company, Oral Meds Corporation, and Narco, Inc., are drug makers. Medico Company and Lab Source, Inc., are drug dis­tribu­tors. In a suit against all of these parties in which market-share li­ability is imposed, most likely to be liable are a. neither the distributors nor the manufacturers. b. the distributors and the manufacturers. c. the distributors only. d. the manufacturers only.

Q: Rhett works at Scarlett's Sandwich Café. After work, in the parking lot, Rhett finds a diamond ring lost by Thalia. Title to the ring is possessed by a. Rhett. b. Scarlett's. c. Thalia. d. the state.

Q: Safe-Rite Company makes electrical cords and other connectors for elec­tronic devices. Tina files a product liability suit against Safe-Rite, alleg­ing a warning defect. Under the Restate­ment (Third) of Torts: Products Liability, in deciding whether to hold Safe-Rite liable, the court may consider a. neither the characteristics of expected users nor the content of any warning. b. only the characteristics of expected users. c. only the content of any warning. d. the characteristics of expected users and the content of any warning.

Q: Double D Ranch and Esau enter into a contract on August 1 for the sale of 200 cattle. Esau cancels the con­tract ten days later. Double D is unable to sell the cattle to another buyer. Double D is enti­tled to a. force Esau to accept the cattle and recover the contract price. b. keep the cattle and recover the contract price from Esau. c. keep the cattle only. d. recover the contract price from Esau but must destroy the cattle.

Q: Grain from Harvest Farms is wrongfully commingled with grain from Idyllic Fields, which obtains possession of all of the grain. This is a. a bailment. b. accession. c. confusion. d. production.

Q: Open Country, Inc., makes grills, camp ovens, and other outdoor cooking appliances. Under the Restatement (Third) of Torts: Products Liability, Open Country could be liable for a warning defect if there is a foreseeable risk of harm posed by one of its products and a. the omission of a warning renders the product not reasonably safe. b. there is a reasonable alternative design. c. there is a lack of care in making of the product. d. none of the choices.

Q: Loomis Weaving Company contracts to sell sweaters to Style Mart stores. Before the sweat­ers are delivered, Style Mart indicates that it will not be able to pay. Loomis can resell the goods a. either after finishing the job (and identifying the goods), or after stopping the job. b. only after finishing the job and identifying the goods. c. only if Loomis immediately stops the job. d. under no circumstances.

Q: Idaho Farms mistakenly puts its potatoes in Jackson Co-op's storage bin, which already contains Kelly Spud Farm's potatoes. It is impossible to tell which potatoes originally belonged to which party. This is a. a bailment. b. accession. c. confusion. d. production.

Q: Horizon Corporation makes cell phones. Inez files a product liabil­ity suit against Horizon, alleging a design defect. Under the Restate­ment (Third) of Torts: Products Liability, in deciding whether to hold Horizon liable, the court may consider a. neither the effect of an alternative design on the products' costs and life nor the range of consumer choice among products. b. only the effect of an alternative design. c. only the range of products. d. the effect of an alternative design and the range of products.

Q: Sof Chair Company contracts to deliver 100 chairs to Stuffy Furnishings Store on May 1 for which Stuffy agrees to pay. Sof tells Stuffy on April 15 that delivery will be delayed until June 1. Stuffy may a. await performance, sue Sof, or suspend its own performance. b. only await Sof's performance for a commercially reasonable time. c. only sue Sof for breach of contract. d. only suspend its own performance.

Q: Nero and Olav each buy certain quantities of oil to sell to Petro Refinery, and agree to share storage costs until Petro can take delivery. The oil is commingled so that Nero's oil cannot be distinguished from Olav's. This is a. accession. b. confusion. c. conversion. d. irresolution.

Q: Cold Stuf, Inc., makes snowboards, which it sells to Deep Freeze Sports Store (DFS). DFS sells Cold Stuf boards to consumers, in­cluding Ed. Ed is in­jured while using the board. In a product liabil­ity suit based on strict li­ability, Ed may recover from a. Cold Stuf only. b. Cold Stuf or DFS. c. DFS only. d. no one.

Q: Craft Engineering, Inc., contracts for a sale of technical instruments to Detail Design Company. Before the date on which performance is due, Craft notifies Detail that it will not perform. This is a. anticipatory repudiation. b. perfect tender. c. rejection of performance. d. revocation of acceptance.

Q: Oven Products Company makes microwave ovens. Pico discovers that his Oven Products oven is defective and sues the maker for product liabil­ity based on strict liability. To win, Pico must show that a. Oven Products sold the oven to Pico. b. Pico knew and appreciated the risk caused by the defect. c. Pico suffered an injury caused by the defect. d. the "defect" was a commonly known danger.

Q: Lauren owns a 1967 Ford Mustang, which Mike customizes and details to Lauren's specifications. The car earns several awards at regional ve­hicle customizing competition shows. The result of Mike's efforts is a. accession. b. acquisition. c. conversion. d. resolution.

Q: Julia orders twelve violins for her music shop from Notable Notes Instrument Manufacturers. The sale is made on credit. Julia orders the violins on May 1, Notable Notes ships the violins on May 2, and Julia receives the violins on May 4. Julia sells all the violins by June 15. Julia's credit period most likely began on a. May 1. b. May 2. c. May d. June 15.

Q: John steals an old, battered bicycle that is parked, unlocked, in front of a convenience store. He repairs, paints, and replac­es parts on the bike un­til it is like new. The original owner, Kim, claims the bike. The bike be­longs to a. John and Kim as tenants in common. b. John because he made substantial improvements to it. c. John because Kim claimed it only after John improved it. d. Kim because John stole it.

Q: Fun Toyz Corporation makes skateboards, which it sells to con­sumers, including Holly and Ira. Due to a defect, Holly is injured while using her new board. Ira's board has the same defect, but he is not injured. In a product liability suit based on strict product liabil­ity, Fun Toyz may be liable to a. Holly and Ira. b. Holly only. c. Ira only. d. no one.