© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website,
in whole or in part.
ANSWERS TO QUESTIONS
AT THE ENDS OF THE CASES
CASE 19.1—QUESTIONS (PAGE 367)
THE ETHICAL DIMENSION
evidence of the value of the goods at the time of the breach is another question.”
THE LEGAL ENVIRONMENT DIMENSION
If Shoop is allowed to recover damages for breach of warranty, what should be the
measure of those damages? Under UCC 2–714(2), the measure of damages for breach of
When the buyer sues the seller for warranty damages, the general rule specified by the UCC for
the measurement of the damages must be modified by deducting the profits made on resale.”
CASE 19.2—QUESTION (PAGE 369)
in whole or in part.
CHAPTER 19: WARRANTIES 3
in whole or in part.
An “as is” clause does operate to bar a claim for fraud based on an injury that results
from a decrease in the value of the goods. This is because an “as is” clause transfers the risk to
the buyer that the condition or value of the goods is not what the seller represents.
4A. In this case, what did the court rule on the effect of the “as is” clause? Why? In the
Roberts case, Roberts signed a contract to buy a car that stated the vehicle was sold “as is.” By
signing the contract, Roberts acknowledged that the bargain was “without any guarantee
expressed or implied by this dealer.” When the car proved to have been damaged in a previous
accident, thereby undercutting its value, Roberts filed a suit against Lanigan Auto Sales, the
dealer, alleging fraud. But the court held that the “as is” clause effectively shifted “the
representations.” Thus, Roberts could not claim that he relied on the dealer’s representations
when he agreed to buy the car.
ANSWERS TO QUESTIONS IN THE REVIEWING FEATURE
AT THE END OF THE CHAPTER
2A. Warranty disclaimer
A warranty disclaimer must be clear and specific, not buried in paperwork. Further, the
disclaimer was inconsistent with the promise made at the time of the purchase.
Kolchek could sue Porter for breach of this implied warranty.
4A. Title warranty
A title warranty protects buyers who unknowingly purchase goods that are subject to a creditor’s
security interest. If a creditor legally repossesses the goods from a buyer who had no actual
in whole or in part.
in whole or in part.
hay from Kallestad was a transaction in goods” and if Kallestad was, on remand, held to be “a
merchant for purposes of the sale of his hay to the Rothings, then the provisions of the UCC,
and more specifically, the Implied Warranty of Merchantability [in UCC 2–314], would apply to
this transaction.” To be merchantable, goods must be, among other things, “fit for the ordinary
purposes for which such goods are used.” Goods “are not merchantable, if in their ordinary use,
19–5A. SPOTLIGHT ON APPLE—Implied warranties
The court should rule in favor of Apple. Apple’s statements are generalized and nonactionable
puffery because there are vague and generalized terms and not factual representations about a
particular standard of quality. Apple’s statements do not imply that the laptop would last a
(Chapter 19—Pages 366–368)
Yes, Absolute breached the implied warranties of merchantability and fitness for a particular
purpose. Under the UCC, merchants impliedly warrant that the goods they sell or lease are
merchantable and, in certain circumstances, fit for a particular purpose. To be merchantable,
goods must be “reasonably fit for the ordinary purposes for which such goods are used.” They
million from Absolute Trading Corp. to be delivered in shipments from China to Venezuela.
Absolute assured Bariven that its milk was safe, but tests of samples of the milk revealed that it
contained dangerous levels of melamine. This is not quality that will pass without objection in
CHAPTER 19: WARRANTIES 7
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website,
in whole or in part.
the market for the goods. Nor is milk contaminated with melamine “reasonably fit for the ordinary
purposes for which such goods are used.” The value of the milk as food was impaired because
it was potentially lethal and thus not fit to be consumed. Absolute had reason to know the
purpose for which Bariven bought the milk and that the buyer was relying on Absolute to select
safe milk. In view of the potential hazards and liabilities of the contaminated milk, Absolute was
in breach of the implied warranties of merchantability and fitness for a particular purpose.
In the actual case on which this problem is based, Bariven revoked its acceptance of the
first nineteen shipments of the milk and canceled the twentieth. From a decision against
unable to fix could effectively bar Schweiger’s claim for a refund. But it seems reasonable to
require that such an offer would include the full purchase price plus any sales tax, finance
charge, and any other amounts paid by Schweiger at the time of the sale, as well as the costs of
attempted repair, less a reasonable allowance for use. The “other amounts” could include title
and registration fees and service contract charges. “Allowances for use” might include
credibility with a court can wear thin if an argument is weak or illogical.
Whether it is unethical to make an illogical argument may be a question of personal
values, perspective, and intent. Some persons may find it objectionable if the proponent is
merely throwing up the argument as a smoke screen for an ulterior purpose. Some may simply
object to the illogic because the law is founded on logic. Others may be willing to discuss the
were rolled into the amount financed.” There was “no justification for Kia to single out the service
contract.” But “if there could be some logical justification, then the fault lies with Kia for failing to
identify it with a coherent argument.”
in whole or in part.
in whole or in part.
CHAPTER 19: WARRANTIES 3
in whole or in part.
An “as is” clause does operate to bar a claim for fraud based on an injury that results
from a decrease in the value of the goods. This is because an “as is” clause transfers the risk to
the buyer that the condition or value of the goods is not what the seller represents.
4A. In this case, what did the court rule on the effect of the “as is” clause? Why? In the
Roberts case, Roberts signed a contract to buy a car that stated the vehicle was sold “as is.” By
signing the contract, Roberts acknowledged that the bargain was “without any guarantee
expressed or implied by this dealer.” When the car proved to have been damaged in a previous
accident, thereby undercutting its value, Roberts filed a suit against Lanigan Auto Sales, the
dealer, alleging fraud. But the court held that the “as is” clause effectively shifted “the
representations.” Thus, Roberts could not claim that he relied on the dealer’s representations
when he agreed to buy the car.
ANSWERS TO QUESTIONS IN THE REVIEWING FEATURE
AT THE END OF THE CHAPTER
2A. Warranty disclaimer
A warranty disclaimer must be clear and specific, not buried in paperwork. Further, the
disclaimer was inconsistent with the promise made at the time of the purchase.
Kolchek could sue Porter for breach of this implied warranty.
4A. Title warranty
A title warranty protects buyers who unknowingly purchase goods that are subject to a creditor’s
security interest. If a creditor legally repossesses the goods from a buyer who had no actual
in whole or in part.
in whole or in part.
hay from Kallestad was a transaction in goods” and if Kallestad was, on remand, held to be “a
merchant for purposes of the sale of his hay to the Rothings, then the provisions of the UCC,
and more specifically, the Implied Warranty of Merchantability [in UCC 2–314], would apply to
this transaction.” To be merchantable, goods must be, among other things, “fit for the ordinary
purposes for which such goods are used.” Goods “are not merchantable, if in their ordinary use,
19–5A. SPOTLIGHT ON APPLE—Implied warranties
The court should rule in favor of Apple. Apple’s statements are generalized and nonactionable
puffery because there are vague and generalized terms and not factual representations about a
particular standard of quality. Apple’s statements do not imply that the laptop would last a
(Chapter 19—Pages 366–368)
Yes, Absolute breached the implied warranties of merchantability and fitness for a particular
purpose. Under the UCC, merchants impliedly warrant that the goods they sell or lease are
merchantable and, in certain circumstances, fit for a particular purpose. To be merchantable,
goods must be “reasonably fit for the ordinary purposes for which such goods are used.” They
million from Absolute Trading Corp. to be delivered in shipments from China to Venezuela.
Absolute assured Bariven that its milk was safe, but tests of samples of the milk revealed that it
contained dangerous levels of melamine. This is not quality that will pass without objection in
CHAPTER 19: WARRANTIES 7
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website,
in whole or in part.
the market for the goods. Nor is milk contaminated with melamine “reasonably fit for the ordinary
purposes for which such goods are used.” The value of the milk as food was impaired because
it was potentially lethal and thus not fit to be consumed. Absolute had reason to know the
purpose for which Bariven bought the milk and that the buyer was relying on Absolute to select
safe milk. In view of the potential hazards and liabilities of the contaminated milk, Absolute was
in breach of the implied warranties of merchantability and fitness for a particular purpose.
In the actual case on which this problem is based, Bariven revoked its acceptance of the
first nineteen shipments of the milk and canceled the twentieth. From a decision against
unable to fix could effectively bar Schweiger’s claim for a refund. But it seems reasonable to
require that such an offer would include the full purchase price plus any sales tax, finance
charge, and any other amounts paid by Schweiger at the time of the sale, as well as the costs of
attempted repair, less a reasonable allowance for use. The “other amounts” could include title
and registration fees and service contract charges. “Allowances for use” might include
credibility with a court can wear thin if an argument is weak or illogical.
Whether it is unethical to make an illogical argument may be a question of personal
values, perspective, and intent. Some persons may find it objectionable if the proponent is
merely throwing up the argument as a smoke screen for an ulterior purpose. Some may simply
object to the illogic because the law is founded on logic. Others may be willing to discuss the
were rolled into the amount financed.” There was “no justification for Kia to single out the service
contract.” But “if there could be some logical justification, then the fault lies with Kia for failing to
identify it with a coherent argument.”
in whole or in part.