Ranjit Purchased a Complex Computer System from Compu-Less

question 50

Multiple Choice

Ranjit purchased a complex computer system from Compu-Less.Although Compu-Less had specially manufactured the computer to Ranjit's personal specifications,the sale was created on the basis of a standard form agreement that the company uses when customers buy mass-produced computer units.A dispute has now arisen between Ranjit and Compu-Less.Which of the following statements is TRUE?

• A)The strict terms of the contract will not be enforced if,before Ranjit signed the agreement,the company's sales manager said,"Don't worry about the legal mumbo-jumbo.We stand behind our products."
• B)Because of the parol evidence rule,the parties' contract will not include the warranties contained in the Sale of Goods Act unless the contract either repeats those warranties or at least refers to them.
• C)As long as the language of the contract is sufficiently clear,the parties may have excluded all possible statutory conditions and warranties.
• D)The court may refuse to add an implied term to the contract even if that term would make the contract,in the court's opinion,fairer to Ranjit.
• E)The golden rule of contract interpretation states that an ambiguous term must be interpreted in the way that most benefits the party that did not draft the contract.

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Definitions:

Moral Hazard Problem

The possibility that individuals or institutions will behave more recklessly after they obtain insurance or similar contracts that shift the financial burden of bad outcomes onto others. Example: A bank whose deposits are insured against losses may make riskier loans and investments.

Adverse Selection Problem

A problem arising when information known to one party to a contract or agreement is not known to the other party, causing the latter to incur major costs. Example: Individuals who have the poorest health are most likely to buy health insurance.

Common Good Problem

Common Good Problem occurs when resources that are freely accessible to all members of a society are overused or depleted, often leading to sustainability issues.

Special-Interest Effect

The phenomenon where policy decisions are influenced or shaped by the lobbying efforts of a small, focused group, often at the expense of the general public.