Unit 3 of 5

Unit 3: Sales & Torts

Study guide for CLEP CLEP Introductory Business LawUnit 3: Sales & Torts. Practice questions, key concepts, and exam tips.

32

Practice Questions

10

Flashcards

4

Key Topics

Key Concepts to Study

UCC Article 2: sale of goods
Warranties: express, implied, and disclaimer
Intentional torts: battery, fraud, defamation
Negligence: duty, breach, causation, damages

Sample Practice Questions

Try these 5 questions from this unit. Sign up for full access to all 32.

Q1MEDIUM

Emily, a salesperson, knowingly sells a defective product to a customer, who later suffers an injury as a result of using the product. The customer sues Emily for damages. Which of the following is the most likely claim the customer will make against Emily?

A) Breach of contract
B) Negligent misrepresentation
C) Strict liability
D) Intentional tort
Show Answer

Answer: DThe correct answer is D) Intentional tort because Emily knowingly sold a defective product, which demonstrates an intentional act. The customer will likely claim that Emily committed an intentional tort, such as fraud or deceit, by selling a defective product with knowledge of its defect. A) Breach of contract is incorrect because it would require a contractual relationship between Emily and the customer, and the question does not provide information about a contract. B) Negligent misrepresentation is incorrect because it requires a showing of negligence, rather than an intentional act. C) Strict liability is incorrect because it typically applies to manufacturers or sellers of defective products, rather than individual salespeople like Emily.

Q2MEDIUM

Maria, a sales representative, intentionally made false statements about a product to induce a customer into buying it. The customer relied on these statements and purchased the product, which turned out to be defective and caused them harm. What type of tort claim could the customer most likely bring against Maria?

A) Negligence
B) Strict liability
C) Breach of contract
D) Intentional misrepresentation
Show Answer

Answer: DThe correct answer is D) Intentional misrepresentation, as Maria intentionally made false statements to induce the customer into buying the product. This is a tort claim that involves a intentional false statement that causes harm to another. A) Negligence is incorrect because it involves a lack of care or diligence, rather than an intentional act. B) Strict liability is incorrect because it typically applies to product liability cases, rather than intentional torts. C) Breach of contract is incorrect because it is a contract claim, rather than a tort claim.

Q3MEDIUM

Maria, a sales representative, makes a false statement about a product to induce a customer to buy it. The customer relies on the statement and purchases the product, but later discovers that the statement was false. If the customer brings a lawsuit against Maria, which of the following is the most likely claim the customer will make?

A) Intentional misrepresentation
B) Negligent misrepresentation
C) Strict liability
D) Breach of contract
Show Answer

Answer: AThe customer will most likely claim intentional misrepresentation because Maria made a false statement on purpose to induce the customer to buy the product. Intentional misrepresentation, also known as fraud, occurs when a person makes a false statement with the intent to deceive another person. In this case, Maria's actions meet the elements of intentional misrepresentation. Options B, C, and D are incorrect because negligent misrepresentation requires a lack of reasonable care, strict liability is a concept typically applied to product liability cases, and breach of contract requires a valid contract between the parties.

Q4MEDIUM

A manufacturer produces a line of bicycles with a defective brake system. As a result, several consumers are injured when their bicycles' brakes fail. In a product liability lawsuit, which of the following is the most likely claim that the consumers will bring against the manufacturer?

A) Breach of contract, because the manufacturer failed to provide a working brake system
B) Strict liability, because the manufacturer produced a defective product that caused harm to the consumers
C) Negligence, because the manufacturer should have known about the defective brake system
D) Fraud, because the manufacturer intentionally hid the defect from the consumers
Show Answer

Answer: BThe correct answer is B) Strict liability, because the manufacturer produced a defective product that caused harm to the consumers. This is the most likely claim, as strict liability holds manufacturers liable for defects in their products, regardless of whether they were negligent or not. Option A is incorrect, because breach of contract requires a contractual relationship between the parties, which is not present in this scenario. Option C is incorrect, because negligence requires a duty of care and a breach of that duty, which is not the primary issue in this scenario. Option D is incorrect, because fraud requires an intentional misrepresentation, which is not present in this scenario.

Q5HARD

A manufacturer of a new smartphone, TechCell, has just released its product into the market. Shortly after, several customers report that the phone's battery explodes during charging, causing damage to property and personal injury. An investigation reveals that the explosions are due to a design defect in the phone's battery. Which of the following is the most likely basis for a customer's claim against TechCell?

A) Strict liability for a defective product
B) Negligence for failure to inspect the product before release
C) Breach of contract for failure to provide a safe product
D) Intentional tort for reckless disregard of customer safety
Show Answer

Answer: AThe correct answer is A) Strict liability for a defective product. This is because the manufacturer is liable for any harm caused by a defective product, regardless of whether they were negligent or not. The other options are incorrect because negligence (B) requires proof of a duty of care breached, breach of contract (C) requires a contractual agreement between the parties, and intentional tort (D) requires proof of intentional or reckless behavior. In this scenario, strict liability is the most applicable basis for a claim against TechCell due to the design defect in the product.

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Study Tips for Unit 3: Sales & Torts

  • Focus on understanding concepts, not memorizing facts — CLEP tests application
  • Practice with timed questions to build exam-day speed
  • Review explanations for wrong answers — they reveal common misconceptions
  • Use flashcards for key terms, practice questions for deeper understanding

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