In Which One of the Following Instances Would the Seller

question 99

Multiple Choice

In which one of the following instances would the seller most likely succeed in an attempt to escape liability by the use of an exemption clause when the buyer suffers a loss?

• A) A consumer transaction is involved and provincial legislation prohibits such exemption clauses in consumer transactions.
• B) The buyer of an expensive computer software program received, a month after the sale, an invoice on which was printed an exemption clause that he hadn't been shown before.
• C) The store had posted at the entrance to the dressing rooms a large sign reading "Not responsible for stolen articles," and the customer lost a briefcase in a fire that swept through the dressing rooms.
• D) There has been a breach of the fundamental obligation of the contract, and the court holds that on its true construction the parties did not mean it to cover a serious breach.
• E) Ralph bought a used lawnmower under a written and signed contract that contained an "as is" clause.

---

Definitions:

Market Price

The price at which a good or service is offered in the marketplace, determined by supply and demand.

Economic Profit

The difference between the total revenue received from the sale of an output and the total opportunity costs of the inputs used.

Average Variable Cost

The total variable costs (costs that change with the level of output) divided by the quantity of output produced.

Economic Loss

A situation where total costs exceed total revenues, resulting in a negative profit for a business or economy.