Chapter 7 Mindtap - Legal Environment Of Business

Under the doctrine of strict liability, liability for injuries is imposed for reasons other than fault. a. True b. False

Which of the following situations is arguably not an appropriate application of strict liability? a. Keeping wild animals b. Blasting with dynamite c. Storing toxic chemicals d. Shipping storage containers

The application of strict liability to product defects is primarily based in federal statute. a. True b. False

Theories of product liability may normally be based on all of these theories except ______

What is the one area in the list below in which manufacturers do NOT have to use "due care"? a. Designing the product b. Selecting the materials c. Using the appropriate production process d. Using adequate test marketing e. Assembling and testing the product f. Placing adequate warnings on the label to inform the user of dangers of which an ordinary person might not be aware g. Inspecting and testing any purchased components used in the product

Privity of contract refers to the relationship that exists between the parties to a contract. a. True b. False

Under privity of contract, a contractual relationship between the manufacturer and the injured plaintiff must exist before the plaintiff can sue the manufacturer in court. a. True b. False

To determine the liability of a manufacturer, a plaintiff must first show ______ , then show foreseeability or _________ .

When a user or customer is injured because of fraudulent misrepresentation, the basis of liability may be the tort of fraud. a. True b. False

The social policy behind strict product liability includes all of the following EXCEPT: a. consumers deserve protection from unsafe products. b. manufacturers can bear the costs of injuries easier than consumers. c. manufacturers should be responsible for injuries they cause. d. consumers generally are not very aware or careful with their products.

The doctrine of strict product liability does NOT apply to which of the following? a. assemblers b. packagers c. bottlers d. manufacturers e. processors f. advertising agencies g. wholesalers h. retailers i. distributors

In a strict product liability lawsuit, the product must be in a defective condition when the defendant sells it. a. True b. False

In a strict product liability lawsuit, the plaintiff has to show why or in what manner the product became defective. a. True b. False

Because many products cannot be made 100 percent safe for all uses, sellers are only liable for products that are ________

When a company makes a product as safe as is economically realistic, and that product does not exceed the expectation of danger for a normal customer, that product is unreasonably dangerous. a. True b. False

All of the following are examples of a manufacturing defect except: a. a physically flawed product. b. a poorly designed product. c. an incorrectly assembled product. d. nonconformity with design specifications.

When a manufacturer argues that it engaged in reasonable quality control efforts, that argument will act as a sufficient defense in a strict product liability lawsuit. a. True b. False

To successfully assert a design defect, a plaintiff has to show that a reasonable __________ design was available and that the defendant's failure to ______ the alternative design rendered the product ______ reasonably ________

________ occurs when courts look at the risk of harm from a product as designed, compared to the utility to the user and to the public.

A company that manufactures children's games should have bright and bold warnings that are presented in simple terms. a. True b. False

There is no _______ to warn about risks that are commonly known. A seller must warn those who purchase its product of the harm that can result from the ___________ misuse of the product. Courts apply a _____________ test to determine if the warnings adequately alert consumers to the product's risks.

Market-share liability is a theory used when plaintiffs cannot prove which of many distributors of a harmful product supplied the particular product that caused the injuries. a. True b. False

If a defective product injures a bystander, the bystander can sue the manufacturer for strict liability. a. True b. False

The doctrine of strict product liability applies to suppliers of component parts. a. True b. False

One good defense against strict product liability is that _________

A company that manufactures a device that is heavily regulated by the government and has to undergo a rigorous pre-market approval process likely can use the following defense if it is sued: a. exemption. b. "didn't know" exemption. c. no-knowledge exemption. d. preemption. e. causation. f. full basis.

Assumption of the risk is a viable defense in a product liability action. a. True b. False

If a company mails registered letters, sends e-mail, and places ads in local newspapers where it sold a defective product, and a customer knows of the recall but ignores it and uses the product anyway, which defense can the company likely use at trial? a. Preemption b. Causation c. Assumption of risk

Product misuse obviously occurs when a product is used for a purpose other than what it was intended for. The courts recognize this defense in almost all lawsuits today. a. True b. False

When the defense of comparative negligence is successful at trial, it completely absolves the defendant of liability. a. True b. False

If a defendant can succeed in convincing the court that a plaintiff's injury resulted from a commonly known danger, the defendant normally _________ be liable.

A lawsuit against a knife manufacturer by a customer who cut herself using the knife likely won't succeed because: a. the customer implicitly signed an agreement against such lawsuits when she bought the knife. b. there is a commonly known danger of cutting oneself when using a knife. c. knife manufacturers participate in market-share liability.

Individuals who frequently buy and consume supersized portions of fatty food at a particular restaurant chain are not likely to succeed in lawsuits against the chain if they become overweight. a. True b. False

In product liability suits, statutes of limitations normally are set by __________ and typically limit the time in which a case can be brought after ____________

Statutes of repose often allow for unlimited liability for manufacturers of defective products, no matter how far in the past. a. True b. False

Mack is injured by a tractor manufactured by WestCo. In order to defend against a negligence claim based upon the product, WestCo. may show that it exercised "due care" by all of the following except: a. using the appropriate production process. b. showing the absence of privity of contract between it and the consumer. c. inspecting and testing any purchased components used in the final product. d. placing adequate warnings on the label to inform the user of dangers to which an ordinary person might not be aware.

Ginger is a retired school teacher who makes baked goods in her spare time. She occasionally delivers a batch of her cookies to the neighborhood restaurant to be sold at the cash register. One of her batches of cookies causes more than twenty people to become extremely sick with food poisoning. Which of the following statements is applicable? a. Ginger can be sued under the strict product liability theory of product liability. b. Ginger can be sued under the negligence theory of product liability. c. Ginger cannot be sued under the theory of product liability. d. Ginger can be sued under the manufacturing defect theory of product liability.

John purchases a blender from JuiceMart. A crack in the plastic casing causes the blade to swing out of control and fly at John's arm. John is shaken up by the incident but otherwise uninjured. John's strict product liability suit will most likely: a. fail because the blender was not in a defective condition. b. succeed because JuiceMart was in the business of selling that product. c. succeed because the blender was not substantially changed from the time the product was sold to the time the injury was sustained. d. fail because John did not incur physical harm to self or property.

Carl sues Goldman Manufacturing, alleging he suffered injuries as a result of a design defect in Goldman's food processor. To prevail in this lawsuit, Carl must show that Goldman Manufacturing: a. had a reasonable alternative design available, which it failed to use. b. met the relevant statute of limitations or repose. c. failed to adequately warn him of the danger of harm. d. met his consumer expectations and that his injury was unintended.

United Tires uses a faulty design in designing its tires that causes them to blow out after 50,000 miles. Jessa is injured when her right-rear tire incurs a blowout. She can sue United Tires under which of the following theories of strict liability? a. Manufacturing defect b. Market-share liability c. Unreasonably dangerous product d. Design defect

Emily, while driving a car manufactured by Toyosan, suffered a side impact collision from another driver. Despite the fact that Toyosan's air bag deployed, Emily hit her head against the steering wheel, causing damage to her face and teeth. If Emily sued Toyosan for strict product liability, the court would likely conclude that: a. Toyosan's air bag was defective because it did not meet the expectations of a reasonable consumer. b. Toyosan's air bag did not have a defective product design, and it deployed exactly as expected. c. Emily was comparatively negligent for her own injuries. d. Emily misused the product in driving the car, causing her injuries regardless of any defect in the air bag.

Fred sued Document Security Company, alleging he had suffered injuries to his hands as a result of attempting to fix a jam in one of Document Security's paper shredders. Fred alleged the shredder was defective because it failed to contain warnings regarding the dangers to fingers and hands while attempting to fix jams. In order to succeed, Fred will have to show that: a. paper shredders are inherently dangerous products. b. all risk of harm could have been reduced or avoided by the provision of reasonable instructions or warnings by the seller. c. foreseeable risks of harm could have been reduced or avoided by the provision of reasonable instructions or warnings by the seller. d. the injuries would not have occurred but for the absence of the warnings.

Martha is walking from her office building to her car in a torrential downpour with an umbrella manufactured by Umbrellas USA, Inc. She is struck by lightning and files suit, claiming the manufacturer failed to include a warning. A court would likely find that: a. the plaintiff was partially at fault under the doctrine of comparative negligence. b. there is no duty to warn about risks that are obvious or commonly known, such as the risk of lightning occurring during a rainstorm. c. the seller should have provided a warning because of the foreseeable misuse of an umbrella in a rainstorm with lightning. d. the umbrella should have included a warning label against using an umbrella in a lightning storm.

David, a ten-year-old, purchased a plastic snow sled from Qmart. He went sledding, lost control, hit a tree, and was injured. David's parents filed a negligence lawsuit in a state court against Qmart, alleging that the store should not have sold this type of sled because it was difficult to steer and had no brakes, making it unreasonably dangerous. Qmart contended that sledding is an inherently dangerous activity and that David assumed the risks involved when he went sledding. The court probably found that Qmart was: a. liable because sledding is unreasonable. b. not liable because David assumed the risks of sledding. c. not liable because David's injuries were unforeseeable. d. liable because David did not know the risks of sledding.

Harry discovers that a chemical compound has had an adverse impact on his land. The chemical compound is manufactured by five companies. Harry cannot identify which manufacturer's chemical caused the adverse impact to his land. Harry files a product liability lawsuit against all five companies. Harry's case will: a. be dismissed because he cannot identify which company contaminated his land. b. be dismissed because he cannot apportion liability amongst the five companies. c. not be dismissed against any manufacturer because of market-share liability. d. not be dismissed because Harry can show harm to his land.

Harvey is driving while intoxicated in his new truck when his tire blows out. He loses control of the truck and crashes into a tree, causing injury to himself and to his vehicle. The tire is determined to be defective. Which of the following defenses would be the most likely to be raised by the tire manufacturer in a product liability cause of action? a. Product misuse b. Comparative negligence c. Assumption of the risk d. Preemption

A fast-food chain restaurant would not be liable for the failure to disclose the adverse health effects of eating its fatty food based on the defense of: a. a commonly known danger. b. preemption. c. the knowledgeable user. d. assumption of the risk.

Marcus's family purchased a trampoline in 2000. They sold the trampoline at a garage sale in 2010 to Zac's family. In 2012, Zac is injured while jumping on the trampoline when it collapses. If Zac's family sues the trampoline manufacturer in 2013, their lawsuit will likely be dismissed based on the: a. product misuse. b. no privity of contract. c. statute of limitations. d. statute of repose.

Astor Manufacturing stores hazardous and volatile chemicals in its warehouse. The warehouse has state-of-the-art equipment to make sure the chemicals do not explode. An unexpected earthquake shakes the warehouse, causing the chemicals to explode and injure William, a passerby on a nearby sidewalk. Astor Manufacturing is: a. not liable to William because he voluntarily assumed the risk of injury. b. not liable to William because it satisfied its duty of care to passersby. c. liable to William only if the company was grossly negligent. d. strictly liable for William's injuries.

Glen is a dairy farmer who owns 500 milk cows. His fences are in poor repair, and his cows are often found eating the grass on Hank's land. Hank believes that Glen is responsible for damages to Hank's land on a theory of strict liability. The court will most likely find that Glen is: a. not liable because raising cattle is not an inherently dangerous activity. b. liable because Glen did not contain his animals. c. liable because cattle are animals, not humans. d. liable even though the animals did not pose a serious risk of harm to people.

West Agricultural Services, Inc. ("WAS"), stores approximately 100,000 pounds of ammonium nitrate on its property in three storage tanks for use in agriculture fertilizer. Ammonium nitrate is highly explosive if it comes into contact with an ignition source. WAS has taken all necessary precautions to prevent any explosions. If an explosion were to occur with resulting injuries, WAS could be liable under the strict liability theory for damages proximately caused by: a. a design defect. b. product liability. c. a manufacturing defect. d. an abnormally dangerous activity.

Exxon owned a gasoline station in Virginia that it used for years. The station had five underground gasoline storage tanks that were not properly maintained. The property was sold to AFA, which discovered gasoline contamination of the soil. AFA filed a lawsuit in Virginia state court contending that Exxon should be held strictly liable for the cost of cleaning up the property. The court most likely found that Exxon was: a. liable because Exxon had not exercised reasonable care. b. liable because gasoline storage is an abnormally dangerous activity. c. not liable because Exxon had used extreme care to see that no one was harmed. d. not liable because gasoline storage is not an abnormally dangerous activity.