- Which of the following best describes the bakery's claim?
Answer: It will prevail because the 2,000-croissant statement is an express warranty and the general disclaimer cannot negate it.
Whenever you see an express warranty clash with a disclaimer, remember UCC 2-313 and 2-316. Express warranties arise from affirmations of fact that become part of the basis of the bargain, while disclaimers must be consistent with those affirmations. Here, the 2,000-croissant statement is a specific factual promise about capacity. The general disclaimer on page five merely says "no warranties, express or implied," which is inconsistent with that specific promise. Under UCC 2-316(1), a general disclaimer cannot negate a specific express warranty, so the bakery will prevail.
The choice claiming the bakery fails because the no-warranty clause is clear and in the same contract falls for the trap that a general disclaimer trumps specific promises; it must specifically reference the 2,000-croissant promise to negate it. The choice about lacking formal warranty language is false; express warranties don't require words like "warrant" or "guarantee"—a factual statement suffices. The choice requiring proof of reliance is wrong; the UCC test is "basis of the bargain," not subjective reliance, and since the statement is in the written contract, it is presumed part of that bargain.
Your strategy: whenever you see a specific factual promise and a general disclaimer, the specific promise wins. Watch for disclaimers that specifically target the exact promise, as those are effective.
- Which statement best describes Summit's liability?
Answer: Summit is liable because the track-mileage statement was an express warranty that the later general disclaimer could not negate.
Whenever you see a question about express warranties and disclaimers in sales, remember that an express warranty arises from a specific factual affirmation that becomes part of the basis of the bargain. Here, the bold statement that "the track has been replaced and has 200 miles of use" is a concrete, verifiable fact—not mere puffery—so it created an express warranty. The later "AS IS" clause is a general disclaimer of warranties. Under UCC § 2-316(1), a general disclaimer cannot negate a specific express warranty when the two conflict. Since the track actually had 2,000 miles of use, Summit is liable for breaching that express warranty.
The choice suggesting Summit is liable only for breach of the implied warranty of merchantability misreads the facts: the "AS IS" clause effectively disclaims implied warranties, but it does not eliminate the express warranty claim, nor does it transform the claim into one for implied warranty. The choice asserting Summit is not liable because the "AS IS" clause was conspicuous is also wrong—while conspicuousness is required to disclaim implied warranties, it has no effect on a specific express warranty unless the disclaimer specifically addresses that exact fact (e.g., "we do not warrant track mileage"). Finally, the choice about the buyer's failure to inspect is a trap: failure to inspect does not preclude reliance on an express warranty, because the statement becomes part of the basis of the bargain regardless of inspection.
Study tip: When you see an "AS IS" clause alongside a specific factual claim, ask whether the disclaimer specifically negates that exact fact. If it doesn't, the express warranty prevails.
- Who should prevail?
Answer: The seller, because the 'as is, with all faults' language excluded all implied warranties, including implied merchantability, even as to latent defects.
This question tests UCC rules on disclaiming implied warranties in a sale of goods. When you see "as is" language, classify it under UCC 2-316: a formal written disclaimer of merchantability must mention "merchantability" and be conspicuous, but an "as is" or "with all faults" clause is a separate statutory exclusion that puts the buyer on notice that no implied warranties survive.
Here the seller prevails. The contract said "BUYER TAKES THE FREEZER AS IS, WITH ALL FAULTS," which fits UCC 2-316(3)(a): language that in common understanding excludes all implied warranties, including merchantability. The defect being latent and undetectable by reasonable inspection does not change that result, and the seller's lack of knowledge does not matter—under an "as is" clause, the buyer assumes the risk of hidden defects.
The choice saying a merchant can disclaim merchantability only by language conspicuously mentioning "merchantability" confuses the formal disclaimer rule in 2-316(2) with the "as is" exception. The choice saying "as is" cannot exclude latent defects a reasonable inspection would not reveal is the opposite of the rule; that is exactly the kind of risk an "as is" clause assigns to the buyer. And the choice saying the implied warranty of merchantability never applies to used goods is wrong: it applies to goods sold by a merchant, including used goods, but it can be disclaimed.
Exam tip: whenever you see "as is" or "with all faults," think UCC 2-316(3)(a)—it bypasses the "mention merchantability" requirement and covers unknown, latent defects.
- Which statement is correct?
Answer: The bakery may recover for breach of the implied warranty of merchantability only because the conspicuous disclaimer was effective to exclude the fitness warranty but did not mention 'merchantability.'
Whenever you see a question about disclaiming implied warranties under the UCC, remember the two distinct rules. To disclaim the implied warranty of merchantability, the disclaimer must specifically mention the word "merchantability" and be conspicuous. To disclaim the implied warranty of fitness for a particular purpose, the disclaimer only needs to be in writing and conspicuous — no specific magic words are required. Here, the contract's final paragraph is in large red capital letters, making it conspicuous and in writing. The statement "THERE ARE NO WARRANTIES THAT EXTEND BEYOND THE DESCRIPTION ON THE FACE OF THIS AGREEMENT" clearly excludes any warranty that would cover the mixer's ability to knead stiff dough, which effectively kills the fitness warranty. However, because the disclaimer never uses the word "merchantability," the implied warranty of merchantability survives — the mixer must still be fit for its ordinary purpose. Thus, the bakery can recover only for breach of merchantability.
The choice claiming the bakery may recover for both is wrong because the fitness warranty was effectively disclaimed, even though "fitness" wasn't explicitly named — a conspicuous writing is enough for fitness. The choice claiming recovery for fitness only is backwards: the fitness warranty is excluded, not merchantability. The choice claiming neither warranty survives ignores the crucial fact that the disclaimer failed to mention "merchantability," which is the only way to exclude that warranty.
For the exam, always check for the word "merchantability" in any disclaimer. If it's missing, that warranty survives — regardless of how broad the disclaimer's language is.
- Which statement best describes Apex's liability?
Answer: Apex is not liable because the 'as is' term excluded the implied warranty of merchantability even though the earlier broad disclaimer was ineffective.
Whenever you see a disclaimer of implied warranties in a sale of goods, remember UCC 2-316: a broad written disclaimer like "Seller disclaims all implied warranties" is ineffective against the implied warranty of merchantability unless it specifically mentions merchantability and is conspicuous. But UCC 2-316(3)(a) offers a separate path—an "as is" term, if conspicuous, excludes all implied warranties without needing specific magic words.
Here, the earlier broad disclaimer appears in ordinary type in the middle of the form, so it fails to disclaim merchantability. However, the signature page contains "THE LATHE IS SOLD AS IS" in larger, bold type, making it conspicuous. That term effectively excludes the implied warranty of merchantability, even though the earlier disclaimer did not. So Apex is not liable.
The first wrong answer ("liable because the disclaimer did not specifically mention merchantability") correctly identifies the flaw in the broad disclaimer but ignores the later conspicuous "as is" term. The second wrong answer ("liable because the merchantability disclaimer was not conspicuous even though the 'as is' term was conspicuous") makes the same mistake—it treats a merchantability-specific disclaimer as the only possible way to exclude the warranty, overlooking the "as is" route. The final wrong answer ("not liable because a merchant's sale of used goods is not accompanied by the implied warranty of merchantability") is wrong because used goods can carry the implied warranty of merchantability when sold by a merchant in the ordinary course; here, the "as is" term, not the used nature of the goods, is what excludes it.
Study tip: on bar-exam goods questions, always scan for any conspicuous "as is" language—it can salvage an otherwise ineffective disclaimer.
- Which of the following is the dealer's best argument?
Answer: A usage of trade may supplement the contract and exclude implied warranties even though the contract is silent on warranties.
Whenever you see a contract for the sale of goods with a warranty issue, remember that UCC Article 2 allows implied warranties to be excluded not just by explicit language, but also by trade custom. This question tests UCC 2-316(3)(b), which states that implied warranties may be excluded or modified by course of dealing, course of performance, or usage of trade. The dealer's best argument is that the industry understanding—that equipment is sold "with all faults"—is a usage of trade that supplements the silent written contract. UCC 1-303(c) lets usage of trade supplement terms unless the contract expressly contradicts it, and here the contract is silent, so the usage fills the gap and excludes the implied warranty.
The "parol evidence rule" argument is wrong because that rule bars prior or contemporaneous oral agreements, but usage of trade is not barred; it is admissible to interpret or supplement the contract, not to contradict it. The argument that implied warranties can be excluded only by conspicuous language in the contract is wrong because UCC 2-316(3) lists three separate methods—conspicuous language is only one, not the exclusive one. Finally, the argument that the dealer must have expressly told the buyer is wrong because usage of trade does not require a specific oral or written statement to the buyer; it operates based on the trade's regular practice.
Your strategy tip: memorize UCC 2-316(3)'s three methods for excluding implied warranties—"as is" language, buyer's examination, and course of dealing/usage of trade. When the contract is silent, look for trade custom to fill the gap.
- Which warranty or warranties may the restaurant properly assert?
Answer: The implied warranty of merchantability only.
Whenever you see a question about implied warranties under the UCC, immediately separate the implied warranty of merchantability (goods must be fit for ordinary purposes) from the implied warranty of fitness for a particular purpose (goods must meet the buyer's specific, known need). Here, the ice maker fails both tests on the facts: its compressor fails above 90°F, so it cannot make ice for ordinary commercial use, and it also fails to meet the buyer's stated 800-pound requirement. However, the contract contains a bold, conspicuous clause: "THERE ARE NO WARRANTIES THAT EXTEND BEYOND THE DESCRIPTION ON THE FACE HEREOF." Under UCC 2-316(2), to disclaim the implied warranty of merchantability, the disclaimer must specifically mention the word "merchantability." This clause does not, so merchantability survives. In contrast, a disclaimer of the implied warranty of fitness for a particular purpose only needs to be in writing and conspicuous—general language like this suffices to disclaim it. Therefore, the fitness warranty is validly disclaimed, leaving only the merchantability warranty. The "fitness for a particular purpose only" choice is wrong because merchantability is also breached and survives the disclaimer, and the "both" choice is wrong because fitness is effectively disclaimed. The "neither" choice is wrong because merchantability is neither disclaimed nor satisfied. On exam day, always check the exact wording of a disclaimer: if it fails to mention "merchantability," that warranty cannot be excluded, even if other warranties are.
- Which statement best describes the contractor's rights?
Answer: The contractor may recover for the cracked gear but not the worn hoses, because the examination excluded only defects it ought to have revealed.
Whenever you see a question about a buyer inspecting goods before a sale, you're dealing with the UCC's rule on how examination affects implied warranties. Under UCC § 2-316(3)(b), if a buyer examines the goods, they are precluded from recovering for defects that the examination ought to have revealed. Here, you inspected the forklift as fully as you desired. The worn hoses were readily visible, so a reasonable inspection would have caught them; you cannot recover for those. The cracked internal gear, however, required disassembling the transmission, which you were not obligated to do. Since that defect wouldn't be revealed by a reasonable examination, the implied warranty of merchantability survives for it, meaning you may recover for the gear but not the hoses.
Now consider the wrong answers. The first choice claims that a buyer's examination doesn't affect implied warranties unless the seller required it – that's backwards; the UCC actually triggers the waiver whether the seller required or merely allowed the inspection. The second choice says any pre-contract examination waives all implied warranties – that's an overstatement, as it only waives warranties for discoverable defects, not hidden ones. The third choice asserts that a merchant seller cannot disclaim implied warranties by allowing an inspection – but allowing an inspection does shift the risk for obvious defects, so that statement is incorrect.
Strategy tip: On the bar, when you see "inspection" or "examination," immediately ask, "What should this inspection have caught?" Visible defects are waived; hidden ones are not.
- Which of the following is correct?
Answer: The professor is not liable because the researcher did not rely on the professor's skill or judgment to select a suitable freezer.
Whenever you see a warranty question, separate the two implied warranties under the UCC: merchantability (sellers who are merchants must sell goods fit for ordinary purposes) and fitness for a particular purpose (any seller who knows the buyer's specific need and knows the buyer is relying on the seller's skill to pick a suitable product). The key to fitness is reliance—the buyer must actually depend on the seller's expertise.
Here, the professor explicitly said, "I cannot tell you whether it will reach -80°C." That statement destroyed any reasonable reliance. The researcher bought anyway, taking the risk herself. So the professor is not liable—not because he lacked merchant status, but because the reliance element is missing. That matches the correct answer.
Now the traps: The first answer ("liable because he knew the researcher's particular purpose") ignores that knowledge alone isn't enough—the buyer must also rely on the seller's judgment. The second answer ("not fit for ordinary purpose") invokes merchantability, but the professor is a private seller, not a merchant, and the claim is for fitness, not merchantability. The third answer ("not a merchant") is tempting because it correctly notes the professor isn't a merchant, but it misapplies the rule: fitness for a particular purpose applies to all sellers, not just merchants. The final correct answer directly addresses the missing reliance.
Study tip: On warranty questions, ask two questions—Was the seller a merchant? Did the buyer rely on the seller's skill? If the seller disclaims knowledge, reliance fails, and fitness warranty cannot be breached.
- Which statement best describes Baker's liability?
Answer: Baker is not liable because Buyer's refusal to examine the oven precludes the implied warranty as to defects that the examination would have revealed.
When you see a question about the implied warranty of merchantability, start by asking two things: (1) Is the seller a merchant? (2) Did the buyer examine the goods or refuse a reasonable opportunity to examine them? The UCC applies the warranty to used goods sold by a merchant, but it protects only defects that a reasonable examination would not reveal. Here, Baker is a dealer, so the warranty generally applies. However, Baker gave Buyer a chance to have a qualified inspector examine the oven—and Buyer refused. Because a pre-purchase inspection would have revealed the cracked heating element, the warranty is precluded as to that specific defect. That is why Baker is not liable.
Choice A (no duty to inspect and warranty applies to latent defects) is a trap: buyers generally have no duty to inspect, but if they refuse a requested examination, they lose the warranty for defects that inspection would uncover—and this defect was not latent because it was discoverable. Choice B (no written disclaimer) misses the point: a disclaimer is not the only way to limit the warranty; refusal to examine also cuts off liability. Choice D (warranty does not apply to used equipment) is wrong because the implied warranty of merchantability does apply to used goods sold by a merchant, though the standard is that the goods are fit for their ordinary purpose—which this oven was not, unless the inspection exception applies.
Your study tip: On bar-exam questions, watch for facts about a seller's "inspection invitation." If the buyer declines, think UCC 2-316(3)(b)—examination or refusal to examine defeats the warranty as to defects that would have been discovered.
- Which statement best describes the effect of the earlier contracts?
Answer: They may establish a course of dealing that excludes the implied warranty if they are fairly regarded as a common basis for understanding the current contract and the circumstances do not indicate otherwise.
When a UCC contract contains no warranty provision, your first instinct might be to assume the implied warranty of merchantability applies. But this question tests whether prior dealings between the same parties can fill that gap. UCC course of dealing is a sequence of previous conduct between the parties that is fairly regarded as establishing a common basis for understanding their agreement. Here, all earlier Delta-Mason contracts contained a conspicuous "AS IS, NO IMPLIED WARRANTIES" clause, Mason knew of them, and the current contract has no contrary term. So those earlier contracts may establish a course of dealing excluding the implied warranty—provided they are fairly regarded as a common basis for understanding the sixth sale and the circumstances do not indicate otherwise. That exactly matches the correct statement.
The choice saying a disclaimer must appear in the current contract and mention merchantability in writing is too rigid: a written disclaimer can be part of a course of dealing, and the UCC explicitly allows course of dealing to exclude implied warranties. The choice saying omission proves the parties intended usual warranties to apply also goes too far: silence leaves a gap that course of dealing can explain, so omission alone is not decisive. And the choice saying usage of trade can exclude but a prior course of dealing cannot is backwards—course of dealing between the parties is a recognized way to modify or exclude implied warranties. So when you see a silent contract, do not stop at the default; ask whether prior dealings establish a common basis for understanding the terms.
