Question

On May 2, Handy Hardware sent Ram Industries a signed purchase order that stated, in part, as follows: "Ship for May 8 delivery 300 Model A-X socket sets at current dealer price. Terms 2/10/net 30." Ram received Handy's purchase order on May 4. On May 5, Ram discovered that it had only 200 Model A-X socket sets and 100 Model W-Z socket sets in stock. Ram shipped the Model A-X and Model W-Z sets to Handy without any explanation concerning the shipment. The socket sets were received by Handy on May 8. Assuming a contract exists between Handy and Ram, which of the following warranties would result?

I. Implied warranty of merchantability
II. Implied warranty of fitness for a particular purpose
III. Warranty of title
A. III only.
B. I only.
C. I and III only.
D. I, II, and III.

Answer 1

The warranties that would result from the contract between Handy and Ram Industries are the implied warranty of merchantability and warranty of title.

Step-by-step explanation:

In this case, the warranties that would result from the contract between Handy and Ram Industries are:

1. Implied warranty of merchantability
2. Warranty of title

An implied warranty of merchantability means that the goods sold are fit for their ordinary purposes and are of a quality generally expected in the trade. Since Ram is a hardware company, it is implied that the Model A-X and Model W-Z socket sets are fit for their ordinary purposes as socket sets. A warranty of title guarantees that the seller has the right to transfer ownership of the goods and that the goods being sold are free from any third-party claims.