Question

Unless otherwise agreed in a contract for the sale of goods, the buyer is obligated to pay at the time and place at which the buyer receives the goods. The duty of the buyer, however, is subject to a right of inspection. If the sale is a "documentary sale", the

A. Buyer has no right of inspection prior to payment.
B. Buyer is under an obligation to pay only when the goods are delivered even if the documents of title representing the goods are tendered previously.
C. Parties have entered into a CIF contract.
D. Buyer has no right of inspection if the seller ships under reservation.

Answer 1

To reassure potential buyers facing imperfect information, sellers may offer warranties or service contracts, ensuring repair or replacement for a certain time period. This can aid in overcoming uncertainties about product quality and future maintenance costs.

Step-by-step explanation:

When dealing with imperfect information in the sale of goods, sellers often use a number of strategies to reassure potential buyers. One common way is by offering a warranty, which is a seller's promise to fix or replace the good if it fails within a certain period of time.

Additionally, sellers might provide the option of a service contract for an extra charge, under which the seller commits to repairing any issues for a set period of time.

This is especially prevalent with large purchases like cars, appliances, and houses.

Such assurances can help mitigate the difficulties in reaching an agreement on price that often arises from imperfect information, as they provide the buyer with a certain level of security regarding the future performance and maintenance of the product.