Legal Environment of Business Ch. 13
Terms in this set (38)
The extreme risk of an activity is a defense against imposing strict liability.
People who keep domestic animals are strictly liable for any harm inflicted by the animals.
Misrepresentation in an ad is enough to show an intent to induce the reliance of anyone who may use the product.
Manufacturers must use due care in selecting the materials to be used in a product.
A product liability action based on negligence does not require privity of contract between the injured plaintiff and the defendant-manufacturer.
Manufacturers must use due care in inspecting and testing any purchased components used in a product.
The law imposes strict product liability as a matter of public policy based in part on the assumption that manufacturers can better bear the costs associated with injuries caused by their products.
Because many products cannot be made entirely safe for all uses, sellers or lessors are liable only for products that are unreasonably dangerous.
An action in strict product liability requires that a product be in a defective condition caused by its purchaser.
The doctrine of strict liability can be applied to sellers of goods, including manufacturers, but not distributors.
The types of product defects that have traditionally been recognized in product liability law include manufacturing defects.
A manufacturing defect is a departure from a product unit's design specifications that results in products that are physically flawed.
To successfully assert a design defect, a plaintiff has to show that no reasonable alternative design was available.
Under a theory of market-share liability, a manufacturer sells "shares" of its potential strict liability and thereby spreads the risk and the cost.
There is a duty to warn about risks that are obvious or commonly known.
Sellers are required to take precautions against every conceivable misuse of a product.
Generally, a seller must warn those who purchase its product of the harm that can result from the foreseeable misuse of the product.
Generally, the strict liability of manufactures and other sellers does not extend to injured bystanders.
An injured party may sue only the manufacturer of defective products that are subject to comprehensive federal regulatory schemes.
Statutes of repose places outer times limit on product liability actions.
Alice is injured when she is struck by debris floating on her property, which was flooded by a breach of Big R Ranch's reservoir. The rule that a person who engages in certain activities may be liable under the doctrine of strict liability for any harm that results was established by
a. private parties engaged in negotiation.
b. the U.S. Congress.
c a British court.
d. a U.S. court.
Roadbuilders, Inc., uses dynamite in its operations. Sky-Hi Fireworx, Inc., stores explosives in its warehouses. Most likely liable under the doctrine of strict liability for any injury caused by an abnormally dangerous activity will be
a. none of the choices.
b. Roadbuilders and Sky-Hi.
c. Roadbuilders only.
d. Sky-Hi only.
Soda Bubbles Corporation makes and sells soft drinks. Talia buys and drinks a Soda Bubbles beverage, which proves defective and injures her. One justification for holding Soda Bubbles strictly liable for the harm caused to Talia by its defective product is that
a. Soda Bubbles is making a profit from its activities.
b. Talia is a person, not a business.
c. making and selling products are abnormally dangerous activities.
d. Soda Bubbles and Talia are in privity.
Luke is playing a video game on a defective disk that melts in his game player, starting a fire that injures his hands. Luke files a suit against Mystic Maze, Inc., the game's maker under the doctrine off strict liability. A significant appli¬cation of this doctrine is in the area of
a. cyber torts.
b. intentional torts.
c. product liability.
d. unintentional torts.
Street Bikes, Inc., makes and sells a bicycle to Theo. Street Bikes fails to exercise "due care" to make the bicycle safe, however, and Theo is injured as a result. Street Bikes is most likely liable for
a. market-share liability.
b. none of the choices.
d. product misuse.
Forest & Field Company makes and leases a backhoe to Gallagher. Due to a defect attributable to Forest & Field's negligence, Gallagher is injured in an accident in which his neighbor Helga is also hurt. In a product liability suit based on negligence, Forest & Field may be liable to
a. Gallagher only.
b. no one.
c. Gallagher and Helga.
d. Helga only.
Garden Tool Company makes chain saws. Hadrian is injured while using a Garden Tool saw and sues the company for product liability based on neg-ligence. To win, Hadrian must show that
a. Garden Tool did not use due care with respect to the trimmer.
b. Garden Tool used puffery in its advertising.
c. Hadrian was not experienced in the use of trimmers.
d. Hadrian was in privity with Garden Tool.
Lipstik, Inc. makes cosmetics. Lipstik intentionally mislabels its packaged products to conceal a defect. Trusting and relying on the mislabeling, Mikayla buys a Lipstik product and suffers an injury. Lipstik is most likely liable for
a. product misuse.
Good Cookin' Products Company makes heat convection ovens. Heidi discovers that her Good Cookin' oven is defective and sues the maker for product liabil¬ity based on strict liability. To win, Heidi must show that she
a. bought the oven from Good Cookin'.
b. did not misuse the oven.
c. suffered an injury caused by the defect.
d. did not know of the defect.
ClearCall Corporation makes phones, which are sold to consumers by DefDeals stores. Erna files a product liabil¬ity suit against ClearCall, alleging a design defect. In deciding whether to hold ClearCall liable, the court may consider
a. Erna's intended use for the phone.
b. DefDeals' method of accounting.
c. ClearCall's quality control efforts.
d. an available alternative design.
Fleet Feet Corporation makes athletic shoes. Gloria, a marathoner, files a product liabil¬ity suit against Fleet Feet, alleging a design defect. In deciding whether to hold Fleet Feet liable, the court may consider an alternative design's
a. popularity among industrial designers and consumers.
b. weight and heft.
d. advantages and disadvantages.
MedBeat Inc., makes medical devices, including heart pacemakers. Nina, a heart patient, files a product liabil¬ity suit against MedBeat, alleging a warning defect with respect to its pacemaker. In deciding whether to hold MedBeat liable, the court may consider whether there is a foreseeable risk of harm posed by the pacemaker and
a. the omission of a warning renders the pacemaker not reasonably safe.
b. there is a reasonable alternative design.
c. MedBeat did not use due care in making the pacemaker.
d. Nina lacks insurance coverage.
SurgeStop Company makes electrical cords and other connectors for elec¬tronic devices. Rollo files a product liability suit against SurgeStop, alleg¬ing a warning defect. In deciding whether to hold SurgeStop liable, the court may consider
a. consumers' general lack of desire to read the product's warnings.
b. the plaintiff's specific lack of desire to read the product warnings.
c. the obvious risks of other products.
d. the obvious risks of this product.
BioChem Corporation, ChemCo Company, and DexLabs Inc. make and distribute toxic chemicals. In a product-liability suit against all of these parties, the court is most likely to impose market-share li¬ability if it cannot be proved which of the parties
a. was in privity with the injured plaintiff.
b. exercised the least amount of due care in making the product.
c. supplied the particular product that caused the injury.
d. holds the largest share of the market for the product.
Fine Motor Company buys gas pedals and other parts from General Mechanix, Inc., and puts them in its vehicles without changing their composition. If the pedals or other parts are defective, strictly liable for any damage caused by the defects are
a. Fine Motor only.
b. no one.
c. Fine Motor and General Mechanix.
d. General Mechanix only.
The brakes on a train owned by Rolling Stock Railway Inc. malfunction. The train rolls towards main¬te¬nance workers on the tracks. Everyone gets out of the way except Sid, who wants to show off. The train hits Sid, who sues Train Components, Inc., the brakes' manufacturer. Train Components can raise the defense of
a. a component-part manufacturer.
b. assumption of risk.
d. product misuse.
Stan, an air-conditioning and heating technician, files a suit against Temp-Set Corporation, alleging that its thermostats are unreasonably dangerous due to the possibility of electrical shock. Temp-Set's best defense is most likely
a. assumption of risk.
b. knowledgeable user.
c. commonly known danger.
d. none of the choices.
Garage Magic, Inc., contracts for the sale of a certain number of garage door openers to Home & Yard Hardware stores. Ian buys one of openers. The applicable statute of limitations prescribes a period of four years. To bring a product liability claim against Garage Magic, Ian must file a suit within four years of
a. Ian's discovery of an injury caused by the opener.
b. Garage Magic's sale of the opener to Home & Yard.
c. Garage Magic's design of the opener.
d. Home & Yard's sale of the opener to Ian.
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