O'Neil Bought a New Car from a Chevrolet Dealer for Family

question 94

Multiple Choice

O'Neil bought a new car from a Chevrolet dealer for family use. The contract he signed contained the following clause: "The parties hereto expressly agree that the dealer is not liable for any breach of condition or warranty, express or implied." He also bought a used car radio from the dealer for his old car, which he was keeping. The contract for the radio was not in writing. The car did not run properly and O'Neil had it back in the shop seven times in three weeks. It was finally determined that the problem was due to a faulty transmission. Unfortunately, the car radio didn't work either. On these facts, which of the following is true?

• A) The exemption clause in the contract for the car would succeed in defeating an action by O'Neil against the dealer for breach of contract.
• B) O'Neil has an action for breach of contract against the dealer because the exemption clause does not defeat the dealer's obligation to deliver a properly performing car (fit for use) in a consumer transaction.
• C) The contract for the radio is not covered by the Sale of Goods Act because the radio was not new.
• D) The contract for the radio is not covered by the Sale of Goods Act because the contract was not in writing.
• E) The exemption clause does not apply to either transaction because both involve fundamental breaches of contract.

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Definitions:

Required Reserves

The minimum amount of funds that a bank must hold in reserve against deposit liabilities, as mandated by central banking regulations, to ensure liquidity and stability in the banking system.

Excess Reserves

The surplus of reserves held by banks over and above the regulatory requirements, often indicating caution or a lack of lending opportunities.

Easy Money Policy

A monetary policy strategy aimed at increasing the money supply to stimulate economic growth by lowering interest rates.

American Imports

Goods and services brought into the United States from other countries for sale.