View Full Version : Breach of warranty vs misrepresentation
04-14-2011, 02:32 PM
Can anyone explain why C is a better answer than A? I've read everything they have about these two topics, and I can't see a key difference between the two.
Joey purchased a two-and-a-half ton trailer for the purpose of hauling junk metal for a fee. When a two-ton load of metal caused the trailer frame to twist under the load, Joey sued the manufacturer. The theory on which to base his lawsuit with the most likelihood of success is
A. Breach of warranty.
B. Gross negligence.
C. Material misrepresentation.
D. Negligent entrustment.
"This was not gross negligence, negligent entrustment, or breach of warranty. The manufacturer misrepresented the weight capacity of the trailer."
04-14-2011, 02:48 PM
From the module on misrepresentation: “…recovery may be [also] based on the theory that an advertising statement about the quality or safety of a product or service constitutes an express warrant”. This is in the example of the windsheild glass shattering.
In both types, the liability arises from a manufacturer claiming something about their product that proves to be false.
04-14-2011, 03:35 PM
An example of breach of warranty in the given example would be something along the lines that the failure of the trailer was the result of poor workmanship on the trailer itself and the company refuses to "make it right" by replacing the trailer.
What is presented, material misrepresentation would be the best answer since nothing is mentioned about why the trailer failed apart from its inability to haul a large quantity that's clearly less than the rated weight capacity.
04-15-2011, 11:05 AM
I actually think that both apply. Misrepresentation may be better but that does not mean it is the only option. Though, technically the question says "the most likelihood of success" but I think it is still a little questionable especially considering your quote above which is actually contained in the misrepresentation section stating that this situation can either be a misrepresentation OR an express warranty.
04-15-2011, 12:23 PM
Thanks for pointing that out BurrNuts; I forgot to mention that the windshield glass shattering example was also an example of misrepresentation, which is why I find this so confusing. I agree that misrepresentation and breach of warranty are both correct choices in the original question, and I'm just not sure how you can determine which is the best choice in questions like this.
Another good example is the lid on the coffee cup falling off and burning someone. The lid falling off is considered a breach of (implied) warranty because it's understood by the consumer that a coffee cup lid is going to stay on while drinking from it. There doesn't have to be an explicit statement, and there doesn't have to be a subsequent failure to act by the manufacturer to have a breach of warranty.
04-18-2011, 08:56 AM
In my experience with INS and CPCU exams, this type of question/answer is somewhat common. Certainly not the majority of questions, but I think you can expect a handful (5-10?) where 2 answers both seem pretty correct. Most of the time I think you'd be able to pick the absolute best answer with little difficulty, and just curse the Institutes under your breath that another answer also should count.
04-18-2011, 01:19 PM
A good example: Quiz 16.6: Which one of the following has the types of rate regulation listed in order from least stringent oversight to most stringent?
Open Competition, use and file, file and use
Open Competition, use and file, prior approval
Both are correct as far as I can tell, but the prior approval choice makes it a bit more clear. Annoying, but fairly obvious.
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