Chapter 12

1. Describe express warranties, implied warranties of merchantability and fitness for a particular purpose. (3 points)

2. (a) List the responsibilities of the Federal Food and Drug Administration. (b) Describe its regulation of drugs, cosmetics, and medicinal devices. (4 points)

3. Explain the coverage of consumer product safety acts. (1 point)

4. Brenda Buyer purchases a new car from a local retailer, Klassy Kars. Klassy Kars, Inc. purchased the car, along with many others from Auto World, the regional distributor of cars of that type. Auto World, in turn, acquired the car from Tonda, the manufacturer of the car. One sunny day, Brenda slams on her brakes to avoid the car, but her brakes lock and her air bad deploys. The ensuing crash and airbag deployment seriously injure Brenda.
Who would Brenda sue and which legal theories should she utilize? (1 point)
Would your answer change, if after the crash, police tested Brenda’s blood, and tests confirmed that she had four times the legal limit of alcohol in her blood? (1 point)
What if the distributor, Auto World, removed the original air bags and installed its own? (1 point)

5. Mark Merchant sells lamps. Brain Buyer negotiates with Mark to buy 100 lamps to sell in his store. Mark tells Brian that his lamps are “made of 14K gold” and “are the finest-crafted lamps in the Western hemisphere.” The lamps look like sculptures of famous ballerinas with lampshades. Brian agrees that they are quite beautiful and he agrees to purchases 100 lamps from Mark. However, when he receives the lamps, none of them work. In addition, he takes the lamps to an appraiser and finds that the lamps are made of cooper.
What are Brian’s theories of recovery? (1 point)
What are Brian’s arguments? (1 point)
What are Mark’s arguments? (1 point)
Assume that at the close of negotiations, Mark has Brain sign a document, and at the very bottom in 6-point font, it states: “Seller disclaims all express warranties.” What will the court likely say about the disclaimer? (1 point)

Chapter 14

1. List the six (6) formal requirements of a negotiable instrument. (6 points)

2. Describe drafts, checks, promissory notes, and certificates of deposit, and identify the parties to these instruments. (4 points)

3. Define holder in due course. (1 point)

4. Define electronic fund transfer systems. (1 point)

5. Jennifer receives a $10,000 check that is not payable to any specific person. She earned the funds from a successful appearance on a game show. She want to give her earnings to her little brother, Zeke, as a gift for graduating from college. She transfers the check to Zeke.
Does Zeke have title to the funds? (1 point)
What are his rights in the event of a dispute? (1 point)
Does Zeke qualify as a holder in due course? (1 point)
Does it make a difference whether the check is order paper or bearer paper? (1 point)
What if, after Zeke receives the check, Damien steals it. What are Damien’s rights? (1 point)

Chapter 12 1. Describe express warranties, implied warranties of...