978-0538496902 Chapter 15

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STUDENT _______________________________________ CLASS _______________________ DATE _________

TESTȱ

CHAPTERȱ15

SECTION I—IDENTIFY LEGAL TERMS

Directions:ȱPlaceȱaȱTȱforȱTrueȱorȱanȱFȱforȱFalseȱinȱtheȱAnswersȱcolumnȱtoȱshowȱ

hetherȱeachȱofȱtheȱfollowingȱstatementsȱisȱtrueȱorȱfalse.ȱw

Answers

.ȱAȱbreachȱofȱwarrantyȱisȱnotȱaȱbreachȱofȱcontract.ȱ

2.ȱNewȱdrugsȱcannotȱbeȱmarketedȱinȱthisȱcountryȱwithoutȱFDAȱapȬ

proval.ȱ

3.ȱCompetitionȱisȱtheȱdrivingȱforceȱbehindȱtheȱcreationȱandȱimȬ

provementȱofȱproductsȱandȱservices.ȱ

4.ȱProductȱliabilityȱlawsȱhaveȱincreasedȱinȱrecentȱyearsȱtoȱprotectȱinȬ

juredȱplaintiffs.ȱ

5.ȱAȱwarrantyȱisȱaȱstatementȱaboutȱaȱproduct’sȱqualitiesȱorȱperformȬ

anceȱandȱthereforeȱisȱnotȱgovernedȱbyȱtheȱUCC.ȱ

6.ȱTheȱfederalȱMagnusonȬMossȱWarrantyȱActȱappliesȱonlyȱtoȱwrittenȱ

warrantiesȱonȱcertainȱproductsȱsoldȱtoȱconsumers.ȱ

.ȱPuffingȱandȱwarrantiesȱareȱbothȱstatementsȱofȱfact.ȱ

8.ȱAȱwarrantyȱagainstȱinfringementȱbasicallyȱrequiresȱthatȱtheȱgoodsȱ

beȱfitȱforȱtheȱordinaryȱpurposesȱforȱwhichȱsuchȱgoodsȱareȱused.ȱ

9.ȱMerchantabilityȱrequiresȱthatȱanyȱwarrantyȱprotectionȱthatȱisȱcusȬ

tomaryȱinȱtheȱtradeȱbeȱextendedȱtoȱallȱbuyers.ȱ

10.ȱAȱrepudiationȱorȱrenunciationȱofȱaȱrightȱorȱpowerȱtypicallyȱorȱleȬ

gallyȱvestedȱinȱaȱpersonȱisȱaȱdisclaimer.ȱ

ȱ1.ȱȱ ȱ

ȱ2.ȱȱ ȱ

ȱ3.ȱȱ ȱ

ȱ4.ȱȱ ȱ

ȱ5.ȱȱ ȱ

ȱ6.ȱȱ ȱ

ȱ7.ȱȱ ȱ

ȱ8.ȱȱ ȱ

ȱ9.ȱȱ ȱ

ȱ10.ȱȱ ȱ

SECTION II—THINK CRITICALLY ABOUT LEGAL CONCEPTS

Directions:ȱInȱtheȱAnswersȱcolumnȱatȱtheȱrightȱofȱeachȱstatement,ȱwriteȱtheȱletterȱthatȱ

representsȱtheȱword,ȱorȱgroupȱofȱwords,ȱthatȱcorrectlyȱcompletesȱtheȱstatement.ȱ

ȱȱ Answers

11.ȱAȱvoluntary,ȱcourtȬenforceableȱagreementȱtoȱstopȱanȱillegalȱorȱ

questionableȱpracticeȱisȱ(a)ȱaȱceaseȬandȬdesistȱorder,ȱ(b)ȱaȱconsentȱ

order,ȱ(c)ȱaȱclassȱaction,ȱ(d)ȱaȱrestitutionȱorderȱ

11._______ȱ

12.ȱȱ TheȱConsumerȱProductȱSafetyȱCommissionȱ(CPSC)ȱreceivesȱreȬ

portsȱaboutȱproductȱfailureȱfromȱ(a)ȱtheȱdistributor,ȱ(b)ȱtheȱmanuȬ

facturer,ȱ(c)ȱtheȱconsumer,ȱ(d)ȱallȱofȱtheseȱ

12._______ȱ

13.ȱȱ Violationsȱofȱtheȱweightsȱandȱmeasuresȱlawsȱareȱpunishableȱbyȱ(a)ȱ

fine,ȱ(b)ȱimprisonment,ȱ(c)ȱbothȱaȱandȱb,ȱ(d)ȱnoneȱofȱtheseȱ

13._______ȱ

14.ȱConsumerȱprotectionȱofȱgoodsȱandȱservicesȱoftenȱbeginsȱwithȱ(a)ȱ

caveatȱvenditor,ȱ(b)ȱclassȱactions,ȱ(c)ȱlicensingȱsuppliers,ȱ(d)ȱmandaȬ

toryȱinspectionsȱofȱallȱbusinessesȱ

14._______ȱ

15.ȱTheȱrelationshipȱthatȱexistsȱbetweenȱcontractingȱpartiesȱasȱaȱresultȱ

15._______ȱ

16.ȱȱ Aȱproductȱliabilityȱsuitȱmayȱbeȱbasedȱonȱ(a)ȱbreachȱofȱwarranty,ȱ

(b)ȱtortsȱofȱfraud,ȱnegligence,ȱorȱstrictȱliability,ȱ(c)ȱbothȱaȱandȱb,ȱ(d)ȱ

noneȱofȱtheseȱ

16._______ȱ

17.ȱȱ Anȱassuranceȱofȱqualityȱorȱpromiseȱofȱperformanceȱclearlyȱmadeȱ

byȱtheȱsellerȱisȱ(a)ȱanȱexpressȱwarranty,ȱ(b)ȱanȱimpliedȱwarranty,ȱ

(c)ȱaȱwarrantyȱofȱtitle,ȱ(d)ȱaȱwarrantyȱagainstȱinfringementȱ

17._______ȱ

18.ȱAnȱimpliedȱwarrantyȱofȱfitnessȱforȱaȱparticularȱpurposeȱarisesȱ

whenȱtheȱbuyerȱ(a)ȱpersonallyȱselectsȱtheȱgoods,ȱ(b)ȱdoesȱnotȱrelyȱ

onȱtheȱskillȱandȱjudgmentȱofȱtheȱseller,ȱ(c)ȱbothȱaȱandȱb,ȱ(d)ȱnoneȱ

ofȱtheseȱ

18._______ȱ

19.ȱȱ Warrantiesȱimpliedȱbyȱlawȱforȱmerchantsȱincludeȱ(a)ȱwarrantyȱofȱ

merchantability,ȱ(b)ȱwarrantyȱagainstȱinfringement,ȱ(c)ȱbothȱaȱandȱ

b,ȱ(d)ȱnoneȱofȱtheseȱ

19._______ȱ

20.ȱSuchȱexpressionsȱasȱ“withȱallȱfaults”ȱorȱ“asȱis”ȱwillȱ(a)ȱexcludeȱallȱ

impliedȱwarranties,ȱ(b)ȱexcludeȱallȱexpressȱwarranties,ȱ(c)ȱbothȱaȱ

andȱb,ȱ(d)ȱnoneȱofȱtheseȱ

20._______ȱ

SECTION III—APPLY LEGAL PRACTICES

21.ȱTheȱsalespersonȱatȱtheȱlocalȱapplianceȱdiscountȱcenterȱconvincedȱCindyȱthatȱifȱ

thereȱwasȱeverȱaȱproblemȱwithȱtheȱcomputerȱthatȱsheȱwasȱaboutȱtoȱpurchase,ȱallȱ

sheȱhadȱtoȱdoȱwasȱreturnȱitȱandȱtheyȱwouldȱgiveȱherȱaȱnewȱone,ȱnoȱquestionsȱ

asked.ȱHeȱevenȱpointedȱoutȱaȱcustomerȱwhoȱwasȱleavingȱtheȱstoreȱwithȱaȱbrandȱ

newȱcomputerȱbecauseȱsheȱhadȱjustȱreturnedȱherȱrecentlyȱpurchasedȱcomputerȱ

claimingȱaȱslightȱproblemȱandȱtheyȱcompletelyȱreplacedȱit.ȱTwoȱmonthsȱlaterȱ

Cindyȱrealizedȱthatȱtheȱcomputerȱsheȱhadȱboughtȱhadȱbeenȱpreviouslyȱreturnedȱ

byȱanotherȱcustomer.ȱIsȱthereȱaȱlawȱagainstȱthisȱpractice?ȱWhatȱshouldȱCindyȱ

do?ȱExplainȱyourȱanswer.ȱ

3-44 Chapter 15 Consumer Protection

ANSWERS

Lessonȱ15—1ȱ

Quiz

11.ȱBusinessesȱwhoȱprovideȱdoorȬtoȬdoorȱsellingȱareȱrequiredȱtoȱgiveȱbuyersȱthreeȱ

Practice Activity

1.ȱYes,ȱtheȱceaseȬandȬdesistȱorderȱagainstȱKraftȱshouldȱbeȱenforced.ȱTheȱcourtȱsupȬ

portedȱtheȱFTC’sȱorder.ȱIfȱthereȱwereȱnoȱwatchdogȱtoȱregulateȱadvertisingȱtoȱtheȱ

2.ȱTheȱFTCȱcanȱmonitorȱsuchȱviolationsȱbyȱensuringȱthatȱconsumersȱknowȱtoȱcallȱ

law.ȱOneȱofȱtheȱwaysȱtheȱFTCȱcanȱmeasureȱdamagesȱisȱbyȱnotȱallowingȱdebtȱcolȬ

lectorsȱtoȱhaveȱanyȱofȱtheȱmoneyȱtheyȱcollectȱviaȱunlawfulȱmeans.ȱMuchȱlikeȱnotȱ

Reteach

Enrichment Activity

Chapter 15 Consumer Protection 3-45

Lessonȱ15—2ȱ

Quiz

11.ȱAllȱimpliedȱwarranties,ȱincludingȱtheȱwarrantyȱofȱmerchantability,ȱareȱexcludedȱ

12.ȱThereȱisȱnoȱdefectȱinȱtheȱladder,ȱandȱitȱdoesȱcontainȱaȱwarningȱlabel.ȱSilviaȱwasȱ

Practice Activity

1.ȱNo.ȱTheȱcourtȱrejectedȱtheȱSchnebles’ȱcontentionȱthatȱanyȱwarrantyȱwasȱ

breachedȱbecauseȱofȱtheȱlanguageȱcontainedȱinȱtheȱbillȱofȱsale.ȱItȱstatedȱthatȱevenȱ

2.ȱNo,ȱtheȱBlueȱShipȱTeaȱRoomȱshouldȱnotȱbeȱheldȱtoȱhaveȱbreachedȱsuchȱaȱwarȬ

ranty.ȱTheȱcourtȱheldȱthatȱinȱfishȱchowderȱmadeȱNewȱEnglandȱstyle,ȱlargeȱpiecesȱ

ofȱfishȱareȱexpected,ȱandȱinȱlargeȱportionsȱofȱfish,ȱthereȱmayȱbeȱembeddedȱfishȱ

3-46 Unit 3 Chapters 13–15

Reteach

Enrichment Activity

ANSWERS TO TEST QUESTIONS

SECTION I

SECTIONȱIIȱ

SECTION III

21.ȱThereȱisȱnoȱspecificȱlawȱconcerningȱthisȱbutȱCindyȱcanȱcontactȱtheȱlocalȱBetterȱ

STUDENT _______________________________________ CLASS _______________________ DATE _________

UNITȱ3ȱȱ

CHAPTERSȱ

13–15ȱ

TESTȱAȱ

SECTION I—IDENTIFY LEGAL TERMS

Directions:ȱInȱtheȱAnswersȱcolumn,ȱwriteȱtheȱletterȱfromȱColumnȱ1ȱthatȱrepresentsȱ

heȱwordȱorȱphraseȱthatȱmatchesȱtheȱstatementȱinȱColumnȱ2.ȱt

Columnȱ1ȱ

.ȱauctionȱ

.ȱbaileeȱ

C.ȱgoodsȱbothȱexistȬ

ingȱandȱidentifiedȱ

.ȱcaveatȱemptorȱȱ

.ȱcaveatȱvenditorȱ

.ȱclassȱactionȱ

.ȱCODȱ

H.ȱConsumerȱProtecȬ

tionȱSafetyȱComȬ

missionȱ

.ȱdisclaimerȱ

J.ȱFederalȱTradeȱ

Commissionȱ

K.ȱwarrantyȱagainstȱ

L.ȱwarrantyȱofȱȱȱȱ

merchantabilityȱ

Columnȱ2ȱ

1.ȱRequiredȱforȱownershipȱofȱgoodsȱtoȱbeȱ

transferredȱinȱaȱsaleȱ

2.ȱGoodsȱheldȱinȱaȱpublicȱwarehouseȱisȱanȱexȬ

ampleȱofȱthisȱ

3.ȱTheȱsellerȱretainsȱcontrolȱoverȱtheȱpossesȬ

sionȱofȱtheȱgoodsȱuntilȱtheȱpriceȱisȱpaidȱ

4.ȱPublicȱsaleȱtoȱtheȱhighestȱbidderȱ

andȱothersȱsimilarlyȱwrongedȱ

6.ȱItsȱmainȱresponsibilityȱisȱtoȱpreventȱunfairȱ

methodsȱofȱcompetitionȱ

7.ȱLetȱtheȱsellerȱbewareȱ

powerȱtypicallyȱorȱlegallyȱvestedȱinȱaȱperȬ

sonȱ

9.ȱRequiringȱthatȱtheȱgoodsȱbeȱfitȱforȱtheȱordiȬ

naryȱpurposesȱforȱwhichȱsuchȱgoodsȱareȱ

usedȱ

10.ȱGoodsȱdeliveredȱtoȱtheȱbuyerȱfreeȱofȱanyȱ

thirdȱparty’sȱclaimsȱforȱunauthorizedȱuseȱ

ofȱpatent,ȱcopyright,ȱorȱtrademarkȱ

Answers

ȱ1.ȱȱ ȱ

ȱ2.ȱȱ ȱ

ȱ3.ȱȱ ȱ

ȱ4.ȱȱ ȱ

ȱ6.ȱȱ ȱ

ȱ7.ȱȱ ȱ

ȱȱ

ȱ9.ȱȱ ȱ

10.ȱȱ ȱ

3-48 Unit 3 Chapters 13–15

SECTION II—THINK CRITICALLY ABOUT LEGAL CONCEPTS

Directions:ȱPlaceȱaȱTȱforȱTrueȱorȱanȱFȱforȱFalseȱinȱtheȱAnswersȱcolumnȱtoȱshowȱ

hetherȱeachȱofȱtheȱfollowingȱstatementsȱisȱtrueȱorȱfalse.ȱw

Answers

11.ȱUnderȱtheȱUCC,ȱaȱsalesȱcontractȱmayȱbeȱmadeȱinȱanyȱmannerȱsuffiȬ

cientȱtoȱshowȱagreement.ȱ

12.ȱUnlessȱcoveredȱbyȱinsurance,ȱtheȱownerȱofȱgoodsȱlosesȱwhenȱtheȱ

goodsȱareȱdestroyedȱorȱdamagedȱwithoutȱtheȱlegalȱfaultȱofȱanyȱ

person.ȱ

13.ȱAȱfraudulentȱbuyerȱwithȱvoidableȱtitleȱmayȱnotȱtransferȱaȱvalidȱtitleȱ

toȱaȱgoodȱfaithȱpurchaser.ȱ

14.ȱTheȱriskȱofȱlossȱtransfersȱtoȱtheȱbuyerȱasȱsoonȱasȱtheȱsellerȱmakesȱaȱ

tenderȱofȱdeliveryȱprovidedȱtheȱsellerȱisȱnotȱaȱmerchant.ȱ

15.ȱIfȱtheȱgoodsȱareȱdefectiveȱandȱthereforeȱdangerous,ȱtheȱmanufacȬ

turer,ȱintermediateȱsellers,ȱandȱimmediateȱsuppliersȱmayȱbeȱliableȱ

forȱresultingȱharm.ȱ

16.ȱFOBȱisȱaȱshipmentȱtermȱthatȱmeansȱtheȱsellerȱagreesȱtoȱdeliverȱtheȱ

17.ȱCIFȱisȱaȱshippingȱtermȱthatȱmeansȱtheȱcarrierȱwillȱcollectȱtheȱpriceȱ

andȱshippingȱchargesȱuponȱdelivery.ȱ

18.ȱAȱpublicȱsaleȱwhereȱgoodsȱareȱsoldȱtoȱtheȱhighestȱbidderȱisȱaȱbulkȱ

transfer.ȱ

19.ȱAȱcreditȱsaleȱisȱaȱsaleȱwhereȱtheȱpartiesȱagreeȱthatȱtheȱgoodsȱwillȱbeȱ

paidȱforȱatȱaȱlaterȱdate.ȱ

20.ȱTheȱmanner,ȱtime,ȱandȱplaceȱforȱtenderȱareȱdeterminedȱbyȱagreeȬ

mentȱandȱtheȱUCC.ȱ

11.ȱȱ ȱ

12.ȱȱ ȱ

13.ȱȱ ȱ

14.ȱȱ ȱ

15.ȱȱ ȱ

16.ȱȱ ȱ

17.ȱȱ ȱ

18.ȱȱ ȱ

19.ȱȱ ȱ

20.ȱȱ ȱ

SECTION III—APPLY LEGAL PRACTICES

Directions:ȱInȱtheȱAnswersȱcolumnȱatȱtheȱrightȱofȱeachȱstatement,ȱwriteȱtheȱletterȱthatȱ

epresentsȱtheȱword,ȱorȱgroupȱofȱwords,ȱthatȱcorrectlyȱcompletesȱtheȱstatement.ȱr

Answers

21.ȱAnȱunconscionableȱcontractȱorȱclauseȱ(a)ȱcontainsȱanȱunforeseeableȱ

obstacleȱtoȱtheȱcontract,ȱ(b)ȱoffendsȱanȱhonestȱperson’sȱconscienceȱ

andȱsenseȱofȱjustice,ȱ(c)ȱimpliesȱhiddenȱtermsȱnotȱrecognizedȱbyȱtheȱ

buyer,ȱ(d)ȱnoneȱofȱtheseȱ

22.ȱIfȱaȱbuyerȱselectsȱandȱagreesȱtoȱbuyȱtheȱgoodsȱinȱtheȱseller’sȱstore,ȱ

theȱtitleȱpassesȱ(a)ȱevenȱifȱpaymentȱandȱdeliveryȱtakeȱplaceȱlater,ȱȱ

(b)ȱwhenȱdeliveryȱisȱmade,ȱ(c)ȱwhenȱpaymentȱisȱmade,ȱ(d)ȱbothȱbȱ

andȱcȱ

21.ȱȱ ȱ

22.ȱȱ ȱ

Unit 3 Tests Chapters 13–15 3-49

3-50 Unit 3 Tests 13–15

SECTION III (Concluded)

Answers

23.ȱSalesȱofȱgoodsȱforȱ$500ȱorȱmoreȱmustȱbeȱevidencedȱbyȱaȱwritingȱtoȱ

beȱenforceableȱinȱcourtȱaccordingȱtoȱ(a)ȱtheȱU.S.ȱConstitution,ȱȱ

(b)ȱU.S.ȱSupremeȱCourt,ȱ(c)ȱtheȱStatuteȱofȱFrauds,ȱ(d)ȱnoneȱofȱtheseȱ

24.ȱInȱsettlingȱaȱdisputeȱwithȱaȱbusiness,ȱaȱconsumerȱmayȱseekȱhelpȱorȱ

adviceȱfromȱ(a)ȱtheȱstateȱattorneyȱgeneral’sȱoffice,ȱ(b)ȱtheȱlocalȱBetȬ

terȱBusinessȱBureau,ȱ(c)ȱtheȱcustomerȱserviceȱdepartmentȱofȱtheȱ

corporationȱinvolved,ȱ(d)ȱanyȱofȱtheseȱ

25.ȱAllȱofȱtheȱfollowingȱareȱexamplesȱofȱunfairȱmethodsȱofȱcompetitionȱ

exceptȱ(a)ȱbaitȱandȱswitch,ȱ(b)ȱcompetition,ȱ(c)ȱconfidenceȱgames,ȱ(d)ȱ

unorderedȱmerchandiseȱ

26.ȱMoneyȱunderȱtheȱcounterȱinȱexchangeȱforȱordersȱorȱindustrialȱesȬ

pionageȱareȱexamplesȱofȱ(a)ȱcommercialȱbribery,ȱ(b)ȱencumbrances,ȱ

(c)ȱinfringements,ȱ(d)ȱpuffingȱ

27.ȱExceptionsȱtoȱtheȱStatuteȱofȱFraudsȱincludeȱ(a)ȱgoodsȱreceivedȱandȱ

acceptedȱbyȱtheȱbuyer,ȱ(b)ȱgoodsȱtheȱbuyerȱpaidȱforȱandȱtheȱsellerȱ

hasȱaccepted,ȱ(c)ȱgoodsȱspeciallyȱmadeȱandȱnotȱsuitableȱforȱsaleȱtoȱ

others,ȱ(d)ȱallȱofȱtheȱaboveȱ

28.ȱGoodsȱunderȱtheȱUCCȱdoȱnotȱincludeȱ(a)ȱautomobiles,ȱ(b)ȱclothing,ȱ

(c)ȱjewelry,ȱ(d)ȱmoneyȱ

29.ȱWordsȱspokenȱduringȱaȱsaleȱthatȱexpressȱtheȱpersonalȱopinionȱofȱ

30.ȱAȱrepudiationȱorȱrenunciationȱofȱaȱrightȱorȱpowerȱtypicallyȱorȱleȬ

gallyȱvestedȱinȱaȱpersonȱisȱa(n)ȱ(a)ȱlemonȱlaw,ȱ(b)ȱconsentȱorder,ȱȱȱȱȱȱȱ

(c)ȱencumbrance,ȱ(d)ȱdisclaimerȱ

23.ȱȱ ȱ

24.ȱȱ ȱ

25.ȱȱ ȱ

26.ȱȱ ȱ

27.ȱȱ ȱ

ȱȱ

28.ȱȱ ȱ

29.ȱȱ ȱ

30.ȱȱ ȱ

SECTION IV—DEMONSTRATE LEGAL IDEAS

31.ȱListȱatȱleastȱfiveȱmethodsȱofȱacquiringȱpropertyȱandȱexplainȱwithȱeachȱmethodȱ

theȱtypeȱofȱpropertyȱinvolved,ȱifȱaȱcontractȱisȱinvolved,ȱifȱownershipȱandȱpossesȬ

sionȱareȱtransferred,ȱandȱwhatȱtheȱevidenceȱofȱtheȱtransactionȱis.ȱ

32.ȱTheȱtrendȱinȱmanyȱstatesȱisȱtoȱholdȱtheȱmanufacturer,ȱwholesaler,ȱandȱretailerȱ

strictlyȱliableȱifȱsomeoneȱisȱinjuredȱbecauseȱofȱaȱdefectiveȱconditionȱinȱtheȱprodȬ

uct.ȱGiveȱfourȱexamplesȱofȱinjuriesȱwhereȱthereȱisȱnoȱliabilityȱorȱwhereȱliabilityȱisȱ

barred.ȱ

STUDENT _______________________________________ CLASS _______________________ DATE _________

UNITȱ3ȱȱ

CHAPTERSȱ

13–15ȱ

TESTȱBȱ

SECTION I—IDENTIFY LEGAL TERMS

Directions:ȱPlaceȱaȱTȱforȱTrueȱorȱanȱFȱforȱFalseȱinȱtheȱAnswersȱcolumnȱtoȱshowȱ

hetherȱeachȱofȱtheȱfollowingȱstatementsȱisȱtrueȱorȱfalse.ȱw

Answers

ȱȱ1.ȱAȱcontractȱtoȱsellȱisȱaȱcontractȱinȱwhichȱownershipȱofȱgoodsȱtransȬ

fersȱimmediatelyȱfromȱtheȱsellerȱtoȱtheȱbuyerȱforȱaȱprice.ȱ

ȱȱ1.ȱ_____ȱ

ȱȱ2.ȱInȱtheȱbasicȱsalesȱtransaction,ȱtheȱpayment,ȱdelivery,ȱandȱtransferȱofȱ

titleȱtakeȱplaceȱsimultaneouslyȱatȱtheȱseller’sȱplaceȱofȱbusiness.ȱ

ȱȱ2.ȱ_____ȱ

ȱȱ3.ȱInȱsomeȱcases,ȱtheȱresponsibilityȱofȱownershipȱmayȱextendȱtoȱcoverȱ

theȱuseȱofȱtheȱgoodsȱbyȱotherȱpersons.ȱ

ȱȱ3.ȱ_____ȱ

ȱȱ4.ȱIfȱtheȱsellerȱisȱrequiredȱtoȱdeliverȱtheȱgoodsȱtoȱaȱparticularȱdestinaȬ

tionȱandȱisȱallowedȱtoȱuseȱaȱcarrier,ȱtheȱriskȱofȱlossȱdoesȱnotȱpassȱtoȱ

theȱbuyerȱuntilȱtheȱbuyerȱhasȱpossessionȱofȱtheȱgoods.ȱ

ȱȱ4.ȱ_____ȱ

ȱȱ5.ȱTheȱriskȱofȱlossȱfallsȱonȱtheȱbuyerȱuponȱreceiptȱofȱtheȱgoodsȱifȱtheȱ

sellerȱisȱaȱmerchant.ȱ

ȱȱ5.ȱ_____ȱ

ȱȱ6.ȱAnȱexpressȱwarrantyȱisȱnoȱassuranceȱofȱtheȱqualityȱofȱtheȱproduct.ȱȱȱ6.ȱ_____ȱ

ȱȱ7.ȱAnȱimplicitȱwarrantyȱobligationȱimposedȱonȱallȱsellersȱisȱcalledȱanȱ

expressȱwarranty.ȱ

ȱȱ7.ȱ_____ȱ

ȱȱ8.ȱAȱwarrantyȱagainstȱencumbrancesȱdoesȱnotȱensureȱthatȱtheȱgoodsȱ

areȱfreeȱofȱencumbrancesȱatȱtheȱtimeȱofȱtheȱsale,ȱbutȱratherȱthatȱtheyȱ

willȱbeȱfreeȱatȱtheȱtimeȱofȱdelivery.ȱ

ȱȱ8.ȱ_____ȱ

ȱȱ9.ȱȱ Aȱclassȱactionȱallowsȱoneȱorȱseveralȱpersonsȱtoȱsueȱonȱbehalfȱofȱ

themselvesȱandȱmanyȱothersȱsimilarlyȱwronged.ȱ

ȱȱ9.ȱȱ_____ȱ

10.ȱAȱceaseȬandȬdesistȱorderȱisȱanȱorderȱrequiringȱaȱcompanyȱtoȱstopȱ

theȱspecifiedȱconduct.ȱ

10.ȱ_____ȱ

3-52 Unit 3 Tests 13–15

SECTION II—THINK CRITICALLY ABOUT LEGAL CONCEPTS

Directions:ȱInȱtheȱAnswersȱcolumnȱatȱtheȱrightȱofȱeachȱstatement,ȱwriteȱtheȱletterȱthatȱ

representsȱtheȱword,ȱorȱgroupȱofȱwords,ȱthatȱcorrectlyȱcompletesȱtheȱstatement.ȱ

ȱȱ Answersȱ

11.ȱȱ Aȱhigherȱstandardȱofȱconduct,ȱlicensing,ȱspecialȱtaxation,ȱandȱ

closerȱgovernmentȱregulationȱareȱrequiredȱofȱ(a)ȱunconscionableȱ

contracts,ȱ(b)ȱcontractsȱofȱadhesion,ȱ(c)ȱmerchants,ȱ(d)ȱbuyersȱ

11._______ȱ

12.ȱOralȱcontractsȱforȱtheȱsaleȱofȱgoodsȱpricedȱatȱ$500ȱorȱmoreȱmayȱ

beȱvalidȱandȱenforceableȱifȱ(a)ȱtheȱbuyerȱreceivedȱandȱacceptedȱ

theȱgoods,ȱ(b)ȱtheȱsellerȱacceptedȱpaymentȱinȱfull,ȱ(c)ȱtheȱgoodsȱ

areȱnonȬresalableȱbecauseȱofȱbeingȱspeciallyȱmade,ȱ(d)ȱallȱofȱ

theseȱ

12._______ȱ

13.ȱȱ Ifȱaȱcontractȱrequiresȱtheȱsellerȱtoȱshipȱtheȱgoodsȱbutȱdoesȱnotȱ

obligateȱtheȱsellerȱtoȱdeliverȱthem,ȱtitleȱpassesȱtoȱtheȱbuyerȱwhenȱ

(a)ȱpossessionȱisȱtransferredȱtoȱtheȱcarrier,ȱ(b)ȱtheȱcontractȱisȱiniȬ

tiallyȱmade,ȱ(c)ȱtheȱgoodsȱareȱdelivered,ȱ(d)ȱpaymentȱisȱmadeȱinȱ

fullȱ

13._______ȱ

14.ȱȱ Overall,ȱconsumerȱlawsȱhelpȱprotectȱagainstȱtheȱproductionȱandȱ

saleȱofȱsubstandardȱorȱdangerousȱconsumerȱgoodsȱandȱprovideȱ

remediesȱforȱpersonsȱinjuredȱasȱwellȱasȱ(a)ȱfixingȱpricesȱtoȱensureȱ

equality,ȱ(b)ȱrequiringȱlicensesȱandȱinspections,ȱ(c)ȱbothȱaȱandȱb,ȱ

(d)ȱnoneȱofȱtheseȱ

14._______ȱ

15.ȱTheȱfederalȱantitrustȱlawsȱandȱtheȱFederalȱTradeȱCommissionȱ

Actȱareȱdesignedȱtoȱpreventȱunfairȱmethodsȱofȱcompetitionȱinȱ(a)ȱ

interstateȱcommerce,ȱ(b)ȱintrastateȱcommerce,ȱ(c)ȱbothȱaȱandȱb,ȱ

(d)ȱnoneȱofȱtheseȱ

15._______ȱ

16.ȱAnȱexpressȱwarrantyȱthatȱobligatesȱtheȱsellerȱtoȱrepairȱorȱtoȱreȬ

placeȱaȱdefectiveȱproductȱwithoutȱcostȱtoȱtheȱbuyerȱandȱwithinȱaȱ

reasonableȱtimeȱisȱ(a)ȱaȱfullȱwarranty,ȱ(b)ȱanȱimpliedȱwarranty,ȱ

(c)ȱaȱlimitedȱwarranty,ȱ(d)ȱaȱwarrantyȱofȱmerchantabilityȱ

16._______ȱ

17.ȱȱ Warrantyȱofȱtitle,ȱwarrantyȱagainstȱencumbrances,ȱandȱwarrantyȱ

ofȱfitnessȱforȱaȱparticularȱpurposeȱareȱallȱ(a)ȱexpressȱwarranties,ȱ

(b)ȱȱimpliedȱbyȱlawȱandȱneedȱnotȱbeȱmentionedȱinȱtheȱcontract,ȱ

(c)ȱwarrantiesȱofȱmerchantability,ȱ(d)ȱnoneȱofȱtheseȱ

17._______ȱ

18.ȱȱ GovernmentalȱactionȱonȱbehalfȱofȱanȱinjuredȱconsumerȱcanȱinȬ

cludeȱ(a)ȱaȱceaseȬandȬdesistȱorder,ȱ(b)ȱaȱconsentȱorder,ȱ(c)ȱrestituȬ

tion,ȱ(d)ȱallȱofȱtheȱaboveȱ

18._______ȱ

SECTION III—APPLY LEGAL PRACTICES

Directions:ȱInȱtheȱspacesȱprovided,ȱwriteȱtheȱword(s)ȱneededȱtoȱmakeȱtheȱsentenceȱaȱ

correctȱstatement.ȱ(anȱexpressȱwarranty,ȱaȱseparationȱagreement,ȱcontractsȱofȱadheȬ

sion,ȱwarrantyȱofȱmerchantability,ȱaȱnoȬfaultȱdivorce,ȱaȱbailee,ȱtheȱmaritalȱconsorȬ

tium,ȱaȱbulkȱtransfer,ȱaȱprenuptialȱagreement,ȱaȱceaseȬandȬdesistȱorder)ȱ

ȱȱ Answersȱ

ȱȱ21.ȱUnconscionableȱcontractsȱinȱwhichȱoneȱpartyȱdicȬ

tatesȱallȱtheȱimportantȱtermsȱareȱcalledȱ__________.ȱ

21.__________________ȱ

22.ȱSometimesȱanotherȱperson’sȱgoodsȱareȱheldȱinȱtrustȱ

forȱaȱspecifiedȱpurposeȱbyȱa(n)ȱȱ .ȱ

22.__________________ȱ

23.ȱȱ Theȱtransferȱofȱallȱorȱaȱmajorȱpartȱofȱtheȱgoodsȱofȱaȱ

businessȱinȱoneȱunitȱatȱoneȱtimeȱisȱa(n)ȱ__________.ȱ

23.__________________ȱ

conductȱisȱ__________.ȱ

25.ȱȱ Anȱassuranceȱofȱqualityȱorȱpromiseȱofȱperformanceȱ

explicitlyȱmadeȱbyȱtheȱsellerȱisȱa(n)ȱ__________.ȱ

25.__________________ȱ

26.ȱȱ Everyȱmerchantȱwhoȱcustomarilyȱdealsȱinȱgoodsȱofȱ

aȱparticularȱkindȱmakesȱtoȱallȱbuyersȱofȱtheȱgoodsȱ

anȱimpliedȱ__________.ȱ

26.__________________ȱ

27.ȱWhatȱwouldȱbeȱconsideredȱaȱcounterofferȱunderȱtheȱ

commonȱlawȱareȱconsideredȱunderȱtheȱUCCȱtoȱbeȱ

__________.ȱ

27.__________________ȱ

28.ȱȱ Individualsȱthatȱdoȱnotȱqualifyȱasȱmerchantsȱinȱaȱ

transactionȱareȱ__________.ȱ

28.__________________ȱ

29.ȱAȱreceiptȱthatȱservesȱasȱwrittenȱevidenceȱofȱtheȱ

transferȱofȱownershipȱofȱgoodsȱisȱaȱ__________.ȱ

29.__________________ȱ

30.ȱȱ Aȱcontractȱorȱclauseȱofȱaȱcontractȱwhichȱisȱgrosslyȱ

unfairȱandȱoffendsȱanȱhonestȱperson’sȱconscienceȱ

andȱsenseȱofȱjusticeȱisȱsaidȱtoȱbeȱ__________.ȱ

30.__________________ȱ

ȱȱ19.ȱTheȱagencyȱresponsibleȱforȱmonitoringȱcosmetics,ȱfood,ȱandȱdrugsȱ

isȱ(a)ȱtheȱFoodȱandȱDrugȱAdministration,ȱ(b)ȱtheȱNationalȱInstituteȱ

ofȱStandardsȱandȱTechnology,ȱ(c)ȱtheȱConsumerȱProductȱSafetyȱ

Commission,ȱ(d)ȱtheȱFederalȱTradeȱCommissionȱ

19._______ȱ

20.ȱUnfairȱmethodsȱofȱcompetitionȱcanȱincludeȱ(a)ȱindustrialȱespioȬ

nage,ȱ(b)ȱfraudulentȱtelemarketing,ȱ(c)ȱaȱbutȱnotȱb,ȱ(d)ȱbothȱaȱandȱ

bȱ

20._______ȱ

Unit 3 Tests Chapters 13–15 3-53

3-54 Unit 3 Tests 13–15

SECTION IV—DEMONSTRATE LEGAL IDEAS

31.ȱTheȱFederalȱTradeȱCommissionȱhasȱadoptedȱmanyȱguidelinesȱandȱregulationsȱ

thatȱareȱintendedȱtoȱcorrectȱabusiveȱmethodsȱofȱcompetitionȱbyȱrequiringȱbusiȬ

nessȱtoȱactȱinȱcertainȱways.ȱListȱthreeȱmentionedȱinȱtheȱtext.ȱ

32.ȱListȱtheȱwaysȱinȱwhichȱriskȱofȱlossȱwillȱtransferȱinȱaȱsalesȱtransactionȱandȱdeȬ

scribeȱwhoȱbearsȱtheȱlossȱunderȱeach.ȱ

ANSWERS TO UNIT 3 TEST A

SECTION I

SECTION II

SECTION III

SECTION IV

31.ȱAnswersȱmayȱvaryȱbutȱshouldȱincludeȱanȱexplanationȱaboutȱanyȱfiveȱofȱtheȱfolȬ

32.ȱAnswersȱmayȱvaryȱbutȱshouldȱincludeȱfourȱofȱtheȱfollowing:ȱ(1)ȱThereȱisȱnoȱliȬ

abilityȱifȱtheȱinjuryȱwasȱsufferedȱwhileȱtheȱproductȱwasȱusedȱforȱaȱpurposeȱforȱ

Unit 3 Tests Chapters 13–15 3-55

ANSWERS TO UNIT 3 TEST B

SECTION I

1.ȱFalseȱ

SECTION II

SECTION III

SECTION IV

31.ȱAnswersȱmayȱvaryȱbutȱshouldȱincludeȱtheȱfollowingȱinformation:ȱ(1)ȱWouldȬbeȱ

creditorsȱmustȱexplainȱtoȱtheirȱintendedȱborrowersȱtheȱmethodsȱofȱfiguringȱfiȬ

32.ȱAnswersȱmayȱvaryȱbutȱshouldȱincludeȱtheȱfollowingȱinformation:ȱsellerȱshipsȱbyȱ

carrier—riskȱofȱlossȱpassesȱtoȱbuyerȱatȱdestination,ȱuponȱtenderȱofȱdelivery;ȱ