Question

30. Catarina’s Appliances teams up with Locality Credit Union for appliance sales events. Every three or four months, Payne’s brings overstocked or discontinued model appliances to Locality. Customers can purchase an appliance on the spot, and Locality has employees on hand to arrange the financing. Duke has been thinking about replacing his family’s existing washing machine for some time when he sees the event at Locality. He picks out a machine, arranges the financing in his name, and brings it home. When he shows the car to his wife Patsy, she tells him that their youngest son needs orthodontia, and they can’t afford a washing machine right now. Patsy tells Duke to cancel the sale. Can Duke cancel the sale?

a. No, because there is no right to cancel a sale unless the seller agrees.

b. Yes, the sale can be cancelled since it did not take place at Payne’s usual place of business.

c. Yes, because Duke needed to get Patsy’s signature on the application for financing.

d. No, because there was nothing fraudulent or misleading about the transaction.

31. Under the Magnuson-Moss Warranty Act, what must a seller do if a defective product cannot be fixed after a reasonable number of attempts?

a. The seller must refund the purchase price.

b. Nothing. The seller is not bound to go beyond reasonable efforts.

c. The seller must replace the product.

d. The seller must either refund the purchase price or replace the product.

32. In the early 1980s. Raoul ran a business that sold stamps for collectors. On occasion, he applied carbon tetrachloride, a hazardous chemical, to stamps in order to reveal watermarks. Raoul closed his business in 1983. He did not know how dangerous carbon tetrachloride could be, so he just dumped the small amount he had left in back of the building his business was in. After he closed his business, Raoul sold the building to Julio, and recently, Julio has sold the business to a developer. The developer tested the soil, and found carbon tetrachloride. The developer is trying to find Raoul, to make him pay for at least part of the clean-up. Is Raoul responsible for any part of the clean-up costs?

a. Yes. CERCLA makes anyone who is potentially responsible for contamination liable for clean-up costs.

b. No. Raoul’s activities took place too many years ago.

c. No. There have been other owners of the property since Raoul.

d. Maybe. Raoul may be liable unless there are other parties who did more to contaminate the land.

Answer 1

30. b. Yes, the sale can be cancelled since it did not take place at Payne’s usual place of business. There is a right to cancel a sale of a consumer product within three business days of the sale, which is made from the usual place of business of the seller.

31. d. The seller must either refund the purchase price or replace the product. The seller has the option of refunding or replacing the item with the full purchase price charged.

32. a. Yes. CERCLA makes anyone who is potentially responsible for contamination liable for clean-up costs.