1. A buyer does not have the right to inspect goods before paying for them if

o The goods are sent C.O.D.

o The goods are sent under a destination contract.

o The goods are sent under a shipment contract.

o None of the  

o above is true: Buyers always have the right to inspect goods before paying for them.

2. If goods are being sold under a negotiable document of title, such as a bill of lading, risk of loss passes to the buyer when

o The document is tendered to the buyer

o The goods are tendered to the buyer

o The buyer takes possession of the goods

o The buyer pays for the goods.

3. A cure occurs when

o The buyer obtains goods from another source after the seller sends non-conforming goods

o The seller ships conforming goods to the buyer to replace an earlier non-conforming tender

o Adequate assurances are given by the buyer to the seller.

o Adequate assurances are given by the seller to the buyer.

4. In which of the following circumstances is a seller allowed to stop goods in transit to the buyer?

o The buyer is insolvent  

o The buyer failed to make a payment that was due before the delivery date.

o The buyer repudiated the contract under which the goods were shipped.

o Both a and b

5. The contract remedy that forces a seller to go through with the sale of unique good is

o Specific performance

o Replevin

o Adequate assurances

o A charging order

6. A seller can reclaim goods that are in the possession of the buyer only if

o The buyer received the goods on credit while the buyer was insolvent.

o The buyer filed for bankruptcy.

o The buyer wrongfully rejected an earlier conforming tender

o Either a or b will allow the seller to reclaim the goods.

7. Which of the following is not a duty that a merchant buyer owes to a seller who sends a non-conforming tender?

o The buyer must accept whatever part of the tender is conforming

o At the seller's request, the buyer must detail in writing the goods' defects or non-conformities

o The buyer must follow the seller's reasonable instructions for the disposition of the goods.

o The buyer must try to sell the goods for the seller's benefit if the goods are perishable or likely to decline in value rapidly.

8. Which of the following statements is false about a seller's right to resell goods after a buyer breaches the contract?

o The resale can only be done through a public, not a private, sale

o The seller must give the buyer notice of his intention to resell the goods.

o The buyer is allowed to bid on the goods at a public auction.

o The seller is allowed to bid on the goods at a public auction.

9. Which of the following is used as a standard for merchantability?

o Are the goods adequately packaged?

o Would the goods pass without object in the trade.

o Do the goods conform to the statements of fact made on the label?

o All of the above are standards for merchantability.

10. Which of the following damages may be recovered when an implied warranty of merchantability is breached?

o Damages for personal injury

o Damages for property loss

o Damages for direct economic loss

o All of the above

11. The implied warranty that goods are reasonably fit for the general purpose for which they are sold is the warranty of

o Title

o Consumer safety

o Merchantability

o Fitness for a particular purpose

12. Which of the following statements does not create an express warranty?

o A jeweler saying: "This is a 2 caret ruby worth 10,000."

o A car sticker that reads: "25milescity 30mileshighway"

o A time-share salesman claiming: "All your friends will be green with envy."

o A statement on a bottle of pain reliever that "each gel cap contains 500 mg of acetaminophen."

13. Which of the following is a requirement for a valid notice from a buyer to a seller claiming a breach of warranty?

• The notice must be written

• The notice must make a claim for a specific dollar amount in damages

• The notice must be accompanied by a summons and complaint

• The notice must identify the defect in the product

14. Which of the following will create an express warranty in a sales transaction?

o A photo of the product

o A sample of the material a product is made from

o Instructions for using a product printed on the package.

o All of the above create express warranties

15. Which of the following statements is false about product liability suits brought in strict liability.

• Most courts will award damages in strict liability only for personal or property loss, not for economic loss.

• The statute of limitations is longer for suits in strict liability than for law suits based on breach of warranty.

• Under Restatement (Third) of Torts, plaintiffs in strict liability cases need only prove the existence of a manufacturing defect, not that the defect was unreasonably dangerous.

• Claims filed in strict liability do not have the same notice requirements that claims based on breach of warranty have.

16. Which of the following statements about an express warranty is true?

• The seller must have intended to make the express warranty.

• The warranty must be in writing.

• The words "express" or "warrants" must be used to create the warranty.

• The description of a product in a catalogue will create an express warranty.

17. A warranty that is imposed on the sales transaction as a matter of law and public policy is a (n) _________warranty.

• Conditional

• Implied

• Absolute

• Express

18. Which of the following does not create an express warranty

• A clothing salesperson telling a customer: "You look like a movie star in that outfit."

• A label on a step ladder claiming that it will hold 350 pounds.

• A label on a computer that says :"500GB Hard Drive"

• An art expert at a major auction house identifying a print as a Dore worth $12,000.

19. Allen's Auto Mart, a large car dealership, is upgrading its inventory tracking and billing system. It sold its computers, printers and fax machines to Rods'n'Reels, a local retailer of sporting goods. One of the computers and two of the faxes have stopped working. Does Rods'n'Reels have a claim against Allen's for breach of an implied warranty of merchantability?

• No, used goods are never covered by the implied warranty of merchantabilit

• No, because Rods'n'Reels is itself a merchant it is not protected by the implied warranty of merchantabilit

• No, Allen's is only a merchant of cars and no warranty of merchantability will be implied for other goods it may sell

• Yes, the warranty of merchantability is implied in every sale by every seller unless it is specifically disclaimed.