Sklar,an Accountant,purchased Two Computers from Wiz Corp

question 82

Multiple Choice

Sklar,an accountant,purchased two computers from Wiz Corp.Sklar discovered material defects in the computers 10 months after taking delivery.Three years after discovering the defects,Sklar commenced an action for breach of warranty against Wiz.Wiz raised the statute of limitations as a defense.The original contract between Wiz and Sklar contained a conspicuous clause providing that the statute of limitations for breach of warranty actions would be limited to 18 months.Under the circumstances,Sklar will:

• A)win because the action was commenced within the four-year period as measured from the date of delivery.
• B)win because the action was commenced within the four-year period as measured from the time he discovered the breach or should have discovered the breach.
• C)lose because the clause providing that the statute of limitations would be limited to 18 months is enforceable.
• D)lose because the statute of limitations is three years from the date of delivery with respect to written contracts.

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Definitions:

Merger

The combination of two or more companies into one, to achieve greater efficiencies and strengthen financial and operational positions.

Operating Economies

Cost advantages that enterprises obtain due to the scaling of production or the efficient allocation of resources.

Managerial Efficiency

A measure of the effectiveness with which managers utilize resources at their disposal to achieve organizational goals.

Purchase Method

An accounting technique used in mergers and acquisitions where the buyer records the assets and liabilities of the acquired company at fair market value.