Vanderhoort Contacted Prinz to Buy a New Furnace That Burned

question 122

Multiple Choice

Vanderhoort contacted Prinz to buy a new furnace that burned both wood and oil. Prinz, who bought the furnace directly from the manufacturer, also installed it. The furnace was defective. It malfunctioned and caused a fire that destroyed the house of the buyer and the belongings of a visitor. Which of the following accurately sets out the legal position of the parties?

• A) The visitor could sue both seller and the manufacturer.
• B) Vanderhoort could sue only seller.
• C) The damages to be claimed from the seller are limited to the total charged for the sale and installation.
• D) If the reason for the fire was a defect caused at the factory, Vanderhoort could only sue the manufacturer for negligence.
• E) If Vanderhoort successfully sued the seller, the seller could then sue the manufacturer.

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Definitions:

COGS

COGS, or Cost of Goods Sold, represents the direct costs attributable to the production of the goods sold by a company, including material and labor costs.

Payables Turnover Rate

An efficiency ratio that measures how quickly a company pays off its suppliers, calculated as cost of goods sold divided by average accounts payable.

Accounts Payable Balance

The total amount of short-term liabilities or obligations a company owes to its creditors or suppliers.

Sales

The total revenue generated from goods or services sold by a company during a specific period.