A basic assumption of the bounded rationality model of decision making

31. The ____ model of decision making helps explain why different individuals may make different decisions when they have exactly the same information.

a.	rational
b.	bounded rationality
c.	both of these
d.	neither of these

 ANS:  B                     

   32.   A basic assumption of the bounded rationality model of decision making is ____.

a.	decision alternatives can be completely evaluated in terms of their potential value
b.	decision alternatives can be objectively rank ordered in terms of appropriateness
c.	preferences for alternatives seldom change as new information is acquired
d.	people do not evaluate all possible decision alternatives

 

ANS:  D                         

   33.   The ____ model recognizes the fact that complete information concerning available alternatives or the outcome of some course of action may be impossible for an individual to obtain.

a.	rational
b.	evidence-based
c.	bounded rationality
d.	conservative

 ANS:  C                  

   34.   The concept of "satisficing" is basic to the ____ model of decision making.

a.	political
b.	evidence-based
c.	bounded rationality
d.	rational

 ANS:  C                   

   35.   The concept of "satisficing" refers to ____.

a.	engaging in an extensive search for alternative solutions
b.	selecting less than the best goal or alternative solution
c.	having inadequate control of forces influences the outcomes of decisions
d.	having inadequate information available to make a decision

 ANS:    B

Express and Implied Conditions and Warranties

Express and Implied Conditions and Warranties

Conditions & warranties may be either express or implied. When they are inserted in the contract they are expressed and they are implied when the law presumes their existence in the contract , although they are not been put in express words. Implied condition and warranties may, however, be negatived by express agreement, or by course of dealing between the parties or by the useage of trade. This provision is merely an application of the general maxim of law “what is expressly done puts an end to what is tacit or implied’ and ‘custom and agreement over-rule implied conditions and warranties’.

Implied Conditions

Unless otherwise agreed, the law incooperates following conditions in to a contract for sale of goods.

1. Condition as to title: Sec.-14(a) In every contract of sale the first implied condition on the part of the seller is that, in case of sales he has a right to sell the goods and that, in the case of agreement to sale, he will have a right to sell to goods at the time when the property is to pass. Usually the seller has right to sel the goods if either he is the owner or he is owner’s agent. This implies that if seller’s title is defective the buyer is entitled to reject the goods and to recover his price.


Example

R. purchased a motorcar from D used the same for several months. D had no title to the car and, therefore, R was compelled to return the car to the true owner. R sued D to recover back the price which he had already paid. He was held entitled to recover the whole of the price paid by him despite the fact that he had used the car for some months ( Rowland vs Divall).

It may be noted that the implied condition as to title makes it obligatory upon the seller that he must not only be the owner but also must be able to uphold the validity of the contract. Thus if the goods sold bear labels infringing the trade mark of another, the seller is guilty of breach of this condition although he had full ownership of the goods.

2. Condition in a sale by Description

‘Where there is a contract of sale of goods by description, there is an implied condition that the goods shall correspond with description’. The goods must correspond with description whether it is a sale of specific goods or of unascertained goods. The description may be in term of the qualities or characteristics of the goods. E.g. long staple cotton, kalyan wheat, Basmati Rice, Sugar S.30 or may mention trademark, brand name, type of packing etc.

Distinction between condition and warranty

Distinction between condition and warranty You may summarize the difference as follows:

1. As to value. A condition is a stipulation which is essential to the main purpose of the contract, whereas a warranty is a stipulation which is collateral to the main purpose of the contract. [Sec. 12(2)(3).

2. As to breach. The breach of a condition gives the aggrieved party the right to repudiate the contract and also to claim damages, whereas the breach of warranty gives the aggrieved party a right to claim damages only.


3. As to treatment. A breach of condition may be treated as a breach of warranty. But a breach of warranty can not be treated as a breach of condition.

When breach of Condition is to be treated as Breach of Warranty:

Sec-13 deals, where breach of condition is to be treated as breach of warranty. In this situation the buyer can claim only damages and cannot rescind contract.

The Cases are as Follows

1. Voluntary waiver by buyer. In a breach of condition by seller the buyer may instead elect to waive the condition i.e to treat the breach of condition as a breach of warranty and accept goods and sue the seller for damages.

Example: A agrees to supply B 10 bags of first quality sugar @ Rs. 625 per bag but supplies only second quality sugar, the price of which is Rs. 600 per bag. There is a breach of condition and the buyer can reject the goods. But if the buyer so elects, he may treat it as a breach of warranty, accept the second quality sugar and claim damages @ Rs. 25 per bag.

Acceptance of goods by buyer

When the buyer has accepted the goods and subsequently he comes to know of the breach of the conditions, he cannot reject them, but can only maintain an action for damages. This case does not depend on the will of the buyer but the law compul-sorily treats a breach of condition as a breach of warranty.

In case the buyer has accepted only part of the goods and the contract indivisible, he will have to treat the breach of condition as a breach of warranty and accept the remaining part also. But in case of divisible contracts, he can repudiate as regards remaining goods, if he has accepted only part thereof.