Contracts and Sales Multistate Bar Practice Exam

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What does the warranty of title imply?

The seller guarantees the goods are brand new
The seller guarantees no liens exist against the title
The seller guarantees the buyer will be satisfied
The seller guarantees a full refund on returned goods

The correct answer is: The seller guarantees no liens exist against the title

The warranty of title specifically implies that the seller guarantees that they have the legal right to sell the goods and that those goods are free from any claims or liens. This means that the seller is assuring the buyer that no third party has any legal rights or interests in the property being sold that could affect the buyer's ownership. Essentially, if a buyer purchases goods, they can trust that the seller holds clear title to those goods and that the buyer will not face any legal disputes or financial claims stemming from a prior owner's rights. This aspect of sales contracts is essential for establishing the buyer's confidence in their purchase and ensuring that they have full ownership without interference. The other options deal with different aspects of sales contracts, such as the condition of the goods or customer satisfaction, but these are not covered under the warranty of title. The focus of the warranty of title is strictly on the legitimacy and freedom of the title as it pertains to ownership and liens.