Q&A Hero

Q: Which of the following entities are allowed to send merchandise through the mail to people who did not order it? A. Hospitals B. Local businesses C. Governmental units D. Charitable organizations

Q: _____ is an alluring but insincere offer to sell a product or service that the advertiser does not really intend to sell. A. Sales puffery B. Foot-in-the door scheme C. Bait-and-switch scheme D. Up-selling technique

Q: The Equal Credit Opportunity Act makes it illegal for businesses to discriminate against credit applicants because they receive public assistance income.

Q: A credit cardholder is liable for all unauthorized charges if he or she does not report the unauthorized charges within sixty days of receiving a statement on which the unauthorized charges appear.

Q: Jarvis rents an apartment for a period of two months. His lease is governed by the Consumer Leasing Act.

Q: Product liability suits are based on which of the following legal theories? A. Negligence B. Public interest C. Public policy D. Social duty

Q: Which of the following is true of public interest and public policy? A. Public interest promotes behaviour complying with the public consensus while public policy refers to the idea that certain activities affect the entire social structure. B. Public interest is the consensus and public policy is the coercive social engineering strategy by which that consensus is implemented. C. Public interest promotes the making of safe goods to coerce the public policy to maintain a social structure that promotes health and safety, and prevents illness and injury. D. To meet the goal of public policy, public interest insists that manufacturers, sellers, and distributors compensate a victim, who is injured by an unsafe product,

Q: Under the ____, the principal consideration is the safety of the product, not the conduct of the manufacturer or supplier of the goods. A. doctrine of public policy B. doctrine of negligence C. doctrine of public interest D. doctrine of strict liability

Q: A knife has a metal handle and the manufacturer has received reports that some consumers have received electrical shocks when attempting to use the knife as a screwdriver while installing an electrical outlet. Acina is one such consumer and decides to sue the manufacturer and the seller. Which of the following is true of this situation? A. Acina can sue the manufacturer since there is no specific warning label on the knife. B. Acina cannot file a suit as a warning label may not reduce the likelihood of an injury in case of a knife. C. Acina cannot file a suit against the manufacturer since the danger presented by the product is obvious. D. Acina can bring a lawsuit against the manufacturers stating that the warning on the product was inadequate.

Q: Robin orders merchandise from Internet Enterprises. If no delivery date is promised, Internet must ship the merchandise within ten days.

Q: A 900 telephone number bills the consumer for the telephone charge.

Q: Slamming is the illegal practice of changing a consumer's telephone service without permission.

Q: The annual percentage rate (APR) may be calculated with tables provided by the Federal Trade Commission. FALSE To help consumers know the truth about the cost of borrowing money, Congress passed the Truth-in-Lending Act. Under this act, lenders must disclose two important things to borrowers: the finance charge (the actual cost of the loan in dollars and cents) and the annual percentage rate (APR) (the true rate of interest of the loan).

Q: An order under which a company agrees to stop the disputed practice without necessarily admitting that it violated the law is called consent order.

Q: Persons who receive unordered merchandise in the mail may treat it as a gift.

Q: A written statement disclosing the odometer reading at the time of the transfer of title of a motor vehicle must be provided by the seller in all motor vehicle sales.

Q: Carlos sells four used motor vehicles in twelve months. He need not provide a Buyer's Guide to the purchasers.

Q: The Federal Trade Commission in most states, requires used car dealers to display statements that the cars are sold "as is" if the cars are sold with no warranties.

Q: The Cooling-off Rule applies to sales that are entered completely by phone or by mail.

Q: Public policy is the equivalent of Weber's social consensus in that it refers to the idea that certain activities affect the entire social structure and must be regulated by the government.

Q: A child is injured after swallowing a piece of glass hidden in a jar of jam. A court will award money for the injuries suffered only if the child or the child's parents purchased the jam.

Q: The principal consideration under the doctrine of strict liability is the safety of the product, not the conduct of the manufacturer or supplier of the goods.

Q: A successful plaintiff in a product liability suit typically always recovers punitive damages.

Q: Interstate commerce consists of local business activity carried on within state boundaries.

Q: Toy Distributors Inc. had a swing set constructed for customers to examine. It was anchored to the ground with 20 inch steel pins. Gina purchased one for installation in her backyard by Toy but Toy anchored it with 6 inch steel pins that pulled out of the ground causing the swing set to tip over and injure Gina's child who was playing on the swing. Discuss if any warranties have been violated by Toy.

Q: When Zachary purchased an Arctic Refrigerator from Best Bargain Sore, the refrigerator came with a 36 month full warranty. When the refrigerator malfunctioned, Zachary discovered that he was expected to ship the refrigerator at his expense to the Arctic factory in China where it was manufactured. There would be a four month delay until he received his repaired refrigerator back from the factory. Discuss if these requirements to exercise the full warranty are lawful.

Q: Tang went into a bicycle shop to purchase a bike rack. He asked the salesperson for help in picking out a rack that would fit his bike. While the salesperson was helping another customer, Tang went ahead and chose one he wanted. The salesperson then told Tang that the rack was a good one. After Tang put the rack on his bike, it did not fit properly and damaged his gear shift. Explain whether Tang can rightfully claim that the salesperson committed a breach of warranty of fitness for a particular purpose.

Q: Cassandra purchased a truck at a Middleburg police auction of abandoned property. The truck in fact had been stolen and the original owner, Ariel, subsequently asserted a claim to it. Discuss if Cassandra has any claims against Middleburg or Ariel.

Q: The doctrine of public policy is based on the assumption that no one should be permitted to do anything that harms the public interest.

Q: Rebecca sells Qadir goods that are located in Matrix Warehouse and gives Qadir a warehouse receipt at 5PM. Matrix closes at 5PM. That night the goods are destroyed by a fire at the Matrix Warehouse. Have the goods been tendered to Qadir by Rebecca?

Q: Jarvis Enterprises ordered 50 boxes of blueberries from Agricultural Wholesalers Inc. Agriculture delivered 50 boxes of blackberries. Jarvis rejected the blueberries and attempted to contact Agriculture. After many unsuccessful attempts, Jarvis decided to sell the blackberries to Cold Ice Cream Co. for $500. Jarvis was ready to forward the money after deducting its expenses and a commission to Agriculture but when Agriculture learned the sale price, it objected that the blackberries had a fair market value of $1200 and that Jarvis sold the blackberries too cheaply. Discuss the legal rights and duties of Jarvis in this situation.

Q: Westdress Inc. entered into a contract with Salvo Inc. to supply them with specified goods by June, 15th. Salvo Inc. shipped the goods which were delivered to Westdress Inc. on May 30th. Westdress inspected the goods, found 50% of the goods to be nonconforming to their order but kept them without notifying the seller of the discrepancy. In the meantime, Salvo Inc. realized its error and contacted Westdress to replace the goods. But Westdress refused the offer. Discuss the case.

Q: Jan, a nonmerchant buyer, receives nonconforming goods from Zoe, a merchant seller. Jan is so upset that she places the goods outside next to the trash collection bin and tells Zoe to come get her "trash." Rain damages some of the goods before Zoe picks them up the next day. Discuss Jan's duties and Zoe's rights.

Q: Bigger Grocery Stores orders 100 cases of tomatoes from Produce Wholesale Co., but receives 100 cases of bananas. Bigger asks Produce for instructions concerning the wrong delivery but receives no instructions. Bigger resells the bananas, considering they are perishable goods. However, when Produce Wholesale learns this, it sues Bigger Grocery Stores on grounds that it did not await instructions from Produce. Discuss the case.

Q: Nicholas entered into a written contract with Mondo Choco, Inc., agreeing to pay Mondo Choco $700 for several hundred assortments of holiday chocolates for the employees of his corporation. Mondo Choco failed to deliver the chocolates by the date set in the contract. Nicholas then told Mondo Choco that he would cover the sale. Discuss.

Q: Jess buys a microwave oven with a manufacturer's full one-year warranty. If Jess discovers that the microwave oven does not work properly during this time, the manufacturer is obligated to: A. charge Jess only for the cost of the parts replaced, not for the labor involved. B. repair the microwave at a nominal cost to Jess. C. provide a pro-rata credit for the defective part of the microwave. D. fix or replace the microwave for free.

Q: _____ is any written warranty that does not meet all of the requirements for a full warranty. A. An express warranty B. A limited warranty C. An implied warranty D. A warranty of merchantability

Q: Lori went into an electronics store that had a sign posted on the wall declaring "All sales final!" She told the salesperson that she was looking for a radio headset that she could wear while working out in her health club. The salesperson selected a headset and told Lori that it would get good reception even in her fitness center. When Lori tried to use the headset the next day, she found that she could not get any stations and only heard static. Which of the following is true of this situation? A. Lori will be unable to return the headset because the store's policy said "All sales final!" at the time of the purchase. B. Lori may not be able to claim a refund since the headset will be declared as merchantable. C. Lori can claim a refund on the basis of an implied warranty of fitness for a particular purpose created by the salesperson. D. Lori can claim a refund from the store based on limited warranty that is practiced in the electronics industry.

Q: Tyler has always had a 180 day full warranty from Business Sales when purchasing office equipment over the past five years. On this occasion Tyler purchased a fax machine that broke thirty days after Tyler purchased it. Business Sales asserts that it did not provide a 180 day full warranty on the fax machine and has no legal liability. Which of the following is true of this situation? A. Tyler cannot assert a warranty since Business Sales has not provided a fall warranty on the product. B. Tyler may assert a warranty based upon past dealings with Business Sales. C. Business Sales can escape liability by asserting that the defect was caused by the manufacturer. D. Tyler can bring a suit against Business Sales and claim punitive damages.

Q: Samantha purchased a used computer system from Office Rental Inc. who was updating its computers. Later Big Bank asserted the right to repossess the used computer system from Samantha since it had a lien on all of Office Rental's business equipments that secured an unpaid loan. Samantha was unaware of this lien. What are Samantha's legal rights? A. She can sue Office Rental for breach of warranty of title. B. She can claim that she was unaware of Office Rental's debt, and hence Big Bank cannot assert its lien. C. She can continue to possess the computer system, since she paid Office Rental for it. D. She can claim a refund from Office Rental but cannot bring a lawsuit against Office Rental or Big Bank.

Q: Which of the following is true of exclusion of implied warranty of merchantability? A. It can be an oral or written statement, promise or other representation about the quality of a product. B. It can occur by excusing buyers from examining the goods, the sample, or model. C. It must be in writing, conspicuous and use the word merchantability. D. It uses expressions such as is, with all faults and so on to exclude express warranties and warranties of titles.

Q: _____ is a court action that allows a person entitled to goods to recover them from someone who has them wrongfully. A. Adjustment B. Writ of replevin C. Specific performance D. Cover the sale

Q: Auto Rebuilders Inc. orders original 1995 model parts from Car Wreckers Inc. Car Wreckers boxes the parts for shipment but finds another purchaser who is willing to pay more and refuses to ship the parts to Auto. Auto Rebuilders is unable to find the parts for sale elsewhere but is uncertain about what legal remedy to pursue. What remedy is best suited for this situation? A. Compensatory damages B. Specific performance C. Writ of replevin D. Compensatory and incidental damages

Q: Bridget contracts with Hunter to purchase $30,000 of goods for her store. Hunter wants a clause in the contract that neither party will sue the other after one year from the date of breach of contract. Which of the following is true of this situation? A. Parties are not allowed to provide time limits in their sales agreements since the UCC sets this time. B. Competent and informed parties can agree to set any time limit to sue for breach of contract. C. The courts must review the time limits the parties have determined in the sales agreement as reasonable. D. The UCC allows parties to shorten the time limit to bring a suit to a minimum of one year.

Q: _____ is an oral or written statement, promise, or other representation about the quality of a product. A. Express warranty B. Guarantee C. Quality assurance D. Implied warranty

Q: In a written contract, Hogan agrees to sell Jason kitchen cabinets and to deliver them before December 21. On October 17, Hogan tells Jason that he will not sell him the cabinets. Which of the following can Jason do in this situation? A. He can sue Hogan for breach of contract, but must wait until December 21 to do so. B. He can sue Hogan for breach of contract immediately. C. He can sue Hogan for breach of contract if he is unable to find another vendor by December 21. D. He cannot sue Hogan for breach of contract, since Hogan served an advanced notice to Jason.

Q: _____ are reasonable expenses that indirectly result from the breach, such as expenses incurred in stopping delivery of goods, transporting goods, and caring for goods after the buyer's breach. A. Compensatory damages B. Resale damages C. Punitive damages D. Incidental damages

Q: Gerald orders 1,000 cupcakes from Haddock Bakers for a Christmas Eve party. However, Haddock fails to deliver the cupcakes as per the schedule mentioned in the contract, and does not send any notification to Gerald. Gerald orders the cupcakes from Marlene's Cakes that evening. This is an example of which of the following? A. Writ of replevin B. Sue for specific performance C. Cover of a sales contract D. Seek adjustment

Q: In a tender of payment: A. a buyer offers to turn the money over to the seller. B. a buyer shows a seller his or her legal tender. C. the seller puts conforming goods at the buyer's disposition. D. the seller provides storage facilities for goods to the buyer.

Q: _____ is money that may be offered legally in satisfaction of a debt and that must be accepted by a creditor when offered. A. Tender of payment B. Warranty C. Legal tender D. Tender of performance

Q: When a buyer has a right to inspect the goods, the right usually must be exercised: A. before the goods are shipped. B. after the goods are shipped but before delivery. C. before accepting the goods. D. within ten days of accepting the goods.

Q: Which of the following is true of rejection of goods by the buyer? A. A rejection by the buyer can be done even after the buyer has expressed acceptance of the goods. B. A buyer can claim ownership of the goods even after rejection. C. A rejection by the buyer can occur even before the goods are tendered and inspected. D. A rejection must be done within a reasonable time after delivery or tender to the buyer.

Q: Brenner entered into a written contract with the Inkblot Corporation for $1,000 worth of office supplies. Inkblot subsequently sent Brenner some supplies that were not requested in the contract. Brenner noticed that the order did not match the contract, but he accepted the nonconforming goods. Which of the following is true of this situation? A. The Inkblot Corporation should cure the improper tender. B. Inkblot does not have the right to cure the improper delivery since it has been accepted. C. Brenner can reject the goods without informing Inkblot of the defect in the supply. D. Brenner can accept the goods and through the court, obligate the Inkblot Corporation to cure the improper delivery.

Q: The implied warranty of merchantability provides that, unless excluded in one of the ways discussed, whenever a merchant sells goods, the merchant warrants that the goods are merchantable that is, they are reasonably fit for the purpose for which they are sold.

Q: Garcia purchases a used shotgun from Andy who had purchased it from Jane who purchased it from Maria who had stolen it from Songhee. Only Maria has broken the warranty of title.

Q: The phrase "sold as is" will exclude implied warranties.

Q: Turban, an immigrant who speaks little English, enters into a contract to pay $300 per month for ten years to purchase an auto from Travel Motor Co. The appraised retail value of the car is $5000. What legal remedy would release Turban from his contract? A. Unconscionability B. Specific performance C. Punitive damages D. Implied understanding

Q: Which of the following is true of a shipment contract? A. The seller must put the goods in the possession of the carrier. B. The seller must tender the delivery of goods to the buyer. C. The seller offers to turn the goods to the buyer, and the buyer offers to pay for them. D. The seller tenders the delivery of goods to the carrier, along with the document title.

Q: The statute of limitations for breach of a sales contract is two years.

Q: An express warranty must be in the written form.

Q: An implied warranty is one created by the statements of the seller and not one that is imposed by law.

Q: In August 2007, Zano orders 10 guitars from Music Retailers for his class which is scheduled to start in January, 2008. After two months Music Retailers notifies him that it cannot fill his order. This notification is an anticipatory breach of contract.

Q: A seller cannot sue a buyer of goods for breach of contract if the seller is able to resell the goods.

Q: The Garden club orders 40 T-shirts from Shirt City Inc., to be printed with the club name and motto for a total price of $400. The Garden club breaches the contract and Shirt City discovers that the resale value of the shirts is $1 each. Shirt City may sue the Garden club for the order price of the T-shirts.

Q: Legal tender cannot be refused by a seller.

Q: In a C.O.D shipment, the buyer has paid for what turns out to be defective goods. It means the buyer has made a binding acceptance of the goods.

Q: Conway Retailers contracts to buy office furniture from Blue Ridge Manufacture to install in a newly constructed office building. About half of the delivered furniture is defective and Conway rejects it. Conway may recover the cost of inspecting the defective furniture from Blue Ridge.

Q: A commercial unit is a single whole for the purpose of sale, the division of which impairs its character or value on the market.

Q: A buyer may revoke an acceptance if the acceptance was made on the assumption that their nonconformity would be corrected by the seller and the seller does not do so.

Q: If a seller offers to cure an improper delivery of goods, he or she must always do so before the contractual time for performance expires.

Q: Downtown Construction Co. obtained possession on April 1 of a bulldozer from Bulldozer Sales Co., to use in Downtown's business with a right to return the bulldozer no later than June 1 with no obligation other than to pay for the fuel the bulldozer used. Downtown is owned by Alice who allows her fifteen-year-old son Bob to operate the bulldozer on May 1 on a Downtown job. Bob is inexperienced and wrecks the bulldozer. Explain who has the risk of loss.

Q: Sue contracts to purchase Sanyo's auto. Only Sue needs to make a tender of performance.

Q: To be in a position to bring suit on a sales contract, the seller of goods must make tender of delivery.

Q: Sonia's warehouse is holding Joe's goods. Joe is selling the goods to Bonique. If Sonia tells Bonique that she may pick up the goods, tender by the seller has occurred.

Q: Tender of payment requires the buyer of goods to offer legal tender only.

Q: Hussein purchases a sofa from Big Box Furniture Inc. on Saturday who agrees to deliver the sofa without charge to Hussein at 3 p.m. the following Monday. Hussein forgets about the delivery and is not home at 3 p.m. on Monday when the Big Box delivery truck arrives. The delivery truck takes the sofa back to the Big Box store where it is destroyed in a fire that occurs at 9 p.m. Monday. Discuss the risk of loss in this case.

Q: Ralph, of Miami, Florida, ordered "100 red widgets" from Maria's business located in Seattle, Washington. Shipment was f.o.b. Seattle via Red Freight Co. By mistake Maria sent "100 green doodads" to Ralph. The shipment was destroyed when the Red Freight truck was involved in a traffic accident in Oklahoma City. Ralph had insurance coverage that includes "items purchased that are in transit." Explain whether Ralph or Maria has the risk of loss.

Q: Nathan makes a high bid of $10,000 on an antique chair. He realizes he should not have spent this much money and attempts to withdraw his bid before the auctioneer announces the end of the sale; however, the auctioneer insists that since this auction is without reserve, Nathan may not withdraw his bid. Discuss the case.

Q: Seth was the highest bidder for an antique chest at an auction sale. There was nothing to indicate whether the auction was with or without reserve. The auctioneer withdrew the chest from the auction without accepting Seth's bid because the bid was too low. Is the auctioneer legally entitled to withdraw the chest from the sale? Explain.

Q: Warren left his watch to be cleaned at a jewelry store. By mistake, a clerk sold the watch to Foley. Foley did not know that the watch rightfully belonged to Warren. Analyze the case.