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:

Compounded Semi-annually

This refers to the process of applying interest to an initial sum plus any previously earned interest, and this action occurs twice a year.

Compounded Quarterly

Refers to the process of calculating and adding interest to the principal balance four times a year.

Eight Year Note

A debt instrument with a fixed interest rate and a maturity of eight years, at which point the principal sum is repaid to investors.

Yield

Yield is the income returned on an investment, such as the interest or dividends received from holding a particular security, expressed usually as a percentage of the investment's cost.