Business Law Chapter 7: Strict Liability and Product Liability

52 : City Slick, Inc. makes cosmetics. City Slick intentionally mislabels its packaged products to conceal a defect. Trusting and relying on the mislabeling, Dora buys a City Slick product and suffers an injury. City Slick is most likely liable for A : product misuse. B : fraud. C : privity. D : puffery.

B

18 : A public policy underlying the imposition of strict product liability is that consumers should be protected against unsafe products. A : true B : false

A

19 : A product contains a manufacturing defect when the product departs from its intended design even though all possible care was exercised. A : true B : false

A

21 : A manufacturing defect is a departure from a product units design specifications that results in products that are physically flawed. A : true B : false

A

25 : When a user is injured as a result of a sellers misrepresentation, the basis of product liability may be the tort of fraud. A : true B : false

A

27 : An inadequate warning will support the imposition of liability on a strict product liability basis. A : true B : false

A

31 : One defense to product liability is to show that there is no basis for the plaintiffs claim. A : true B : false

A

32 : Government regulations can preempt claims for product liability. A : true B : false

A

35 : The dangers associated with using sharp knives are so commonly known that manufacturers need not warn users of those dangers. A : true B : false

A

33 : As a defense to product liability, comparative negligence completely absolves a defendant of liability. A : true B : false

B

34 : Assumption of risk is no defense to a product liability action. A : true B : false

B

37 : 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.

B

4 : The extreme risk of an activity is a defense against imposing strict liability. A : true B : false

B

16 : A statute of repose places outer time limits on product liability actions. A : true B : false

A

17 : Some states limit the application of strict product liability to situations involving personal injuries. A : true B : false

A

10 : To be liable for product liability, a seller must normally be engaged in the business of distributing the product that causes harm by its use. A : true B : false

A

11 : A design defect in a product will support the imposition of liability on a strict product liability basis. A : true B : false

A

12 : Recovery in a product liability case may be limited when it can be shown that the plaintiff misused the product. A : true B : false

A

13 : Suppliers are generally required to expect reasonably foreseeable misuses of their products. A : true B : false

A

14 : Some courts consider the negligent actions of both the plaintiff and the defendant when apportioning liability in a product liability action. A : true B : false

A

15 : A statute of limitations may restrict the time within which an action in product liability may be brought. A : true B : false

A

41 : Global Insulation Company makes and sells fire-retardant building materials. To determine whether the risk of harm from the products as designed outweigh their utility to the users and the public, most courts would engage in A : a risk-utility analysis. B : a consumer-expectations test. C : a critical, statistical analysis. D : a marketing test.

A

43 : Arrow Corporation makes archery supplies. While using an Arrow bow, Balto is injured due to a defect in the bow that causes an arrow to misfire. Chu, another archer standing by, is also injured. In a product liability suit based on strict product liability, Arrow may be liable to A : Balto and Chu. B : Balto only. C : Chu only. D : no one.

A

45 : Therapeutic Corporation makes medical devices that are subject to extensive government regulation and undergo a rigorous premarket approval process. In a design defect product liability suit against Therapeutic by a party allegedly injured by one of the devices, the company can most successfully raise the defense of A : preemption. B : assumption of risk. C : comparative negligence. D : knowledgeable user.

A

47 : Brandname Parts, Inc., makes and sells parts for the repair of major appliances. Clarice suffers a loss when a defective Brandname part in her freezer fails to keep the contents fresh. A statute restricts the time within which Clarice may file a product liability suit once she has discovered or should have discovered the damage. This is a statute of A : limitations. B : preemption. C : repose. D : suspension.

A

48 : Soda Bubbles Corporation makes and sells soft drinks. Talia buys and drinks a Soda beverage, which proves defective and injures her. One justification for holding Soda strictly liable for the harm caused to Talia by its defective product is that A : Soda is in a better position than Talia to bear the cost of her injury. B : Talia is a person, not a business. C : making and selling products are abnormally dangerous activities. D : Soda and Talia are in privity.

A

5 : People who keep domestic animals are strictly liable for any harm inflicted by the animals. A : true B : false

A

51 : Garden Tool Company makes chain saws. Hadrian is injured while using a Garden saw and sues the company for product liability based on negligence. To win, Hadrian must show that A : Garden did not use due care with respect to the trimmer. B : Garden used puffery in its advertising. C : Hadrian was not experienced in the use of trimmers. D : Hadrian was in privity with Garden.

A

57 : MedBeat Inc., makes medical devices, including heart pacemakers. Nina, a heart patient, files a product liability 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.

A

59 : 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 : Ians discovery of an injury caused by the opener. B : Garage Magics sale of the opener to Home & Yard. C : Garage Magics design of the opener. D : Home & Yards sale of the opener to Ian.

A

6 : A manufacturers duty of care extends to the inspection and testing of products bought to incorporate in the final product. A : true B : false

A

7 : A product liability claim may be based on the tort theory of fraud. A : true B : false

A

8 : To avoid product liability, a manufacturer must exercise due care in using the appropriate production process. A : true B : false

A

9 : To succeed in a product liability suit, an injured plaintiff must show that a products defect was the proximate cause of the injury. A : true B : false

A

3 : One characteristic of an abnormally dangerous activity is that it involves a low risk of serious harm. A : true B : false

B

30 : No court engages in a risk-utility analysis to determine whether the risk of harm from a product is outweighed by its utility. A : true B : false

B

1 : Under the doctrine of strict liability, if there is no fault, there is no liability. A : true B : false

B

2 : Under the doctrine of strict liability, liability is imposed only if a person fails to use reasonable care. A : true B : false

B

20 : The doctrine of strict liability can be applied to sellers of goods, but not distributors. A : true B : false

B

22 : Under a theory of market-share liability, a manufacturer sells shares of its potential strict liability and thereby spreads the risk and the cost. A : true B : false

B

23 : Generally, the strict liability of manufactures and other sellers does not extend to injured bystanders. A : true B : false

B

24 : A product liability action based on negligence requires privity of contract between the injured plaintiff and the defendant-manufacturer. A : true B : false

B

26 : An action in strict product liability requires that a product be reasonably dangerous to a user or consumer. A : true B : false

B

28 : Marketing puffery has traditionally been recognized in product liability law as a product defect. A : true B : false

B

29 : To support the imposition of strict product liability, a product must be substantially changed from the time it is sold to the time an injury occurs. A : true B : false

B

54 : Sail-Away Corporation makes sailboards, which are bought and distributed by Tropic Company to UV Sports Stores, Inc., which sells them to consumers. Wen is injured while using a Sail-Away board that he bought from UV Sports. In a product liability suit based on strict liability, Wen may recover from A : Sail-Away only. B : Sail-Away, Tropic, or UV Sports. C : UV Sports only. D : none of the choices.

B

58 : Stan, an air conditioning and heating technician, files suit against Temp-Set Corporation, alleging that its thermostats are unreasonably dangerous due to the possibility of electrical shock while being installed. Temp-Sets best defense is most likely: A : assumption of risk. B : knowledgeable user. C : commonly known danger. D : none of the choices.

B

62 : Eco Products, Inc., makes espresso machines and sells one to Fresh Roast Café. Gus, a café employee, is injured when the machine malfunctions. If the injury occurred as a result of a misrepresentation about the product, Eco is most likely liable for A : negligence. B : fraud. C : privity. D : puffery.

B

66 : In making and marketing home maintenance products, Do-It-Rite Corporation, like other sellers, is required to take precautions with its products against A : any misuse. B : only foreseeable misuses. C : no misuse. D : only obvious misuses.

B

69 : To make and sell fireplaces, Hearth, Inc., buys igniters, tubing, and other parts from Inflame Parts and installs them without modification. If the parts are defective, strictly liable for any damage caused by the defects A : are neither Hearth nor Inflame. B : are Hearth and Inflame. C : is Inflame only. D : is Hearth only.

B

70 : The brakes on Neds Overland truck malfunction, but he continues to drive it. Unable to slow down, he crashes through a guardrail and careens off the road. In Neds suit against Overland, the truck maker can raise the defense of A : commonly known dangers. B : assumption of risk. C : inadequate warning. D : product misuse.

B

38 : Level Grade Engineering, Inc., sometimes uses explosives to prepare land for construction projects. Strict liability is imposed on this activity because A : Level Grade is a corporation. B : the activity is inherently negligent. C : the activity is extremely risky. D : the amount of liability can be added to the costs of construction.

C

40 : Sno Sports LLC makes and sells a snowboard to Toby. Sno Sports fails to exercise due care to make the board safe, and Toby is injured as a result. Sno Sports is most likely liable for A : any alteration of the skis after Sno Sports sold them. B : misrepresentation. C : negligence. D : nothing.

C

44 : Flo is working on a construction site when she is injured on the job in the collapse of a Girder Company-made beam. At the time, Flo is not wearing any safety gear. In Flos product liability suit against Girder, the company can most successfully raise the defense of A : preemption. B : inadequate warning. C : comparative negligence. D : product misuse.

C

50 : Digg Deep Inc. makes and leases a backhoe to Estes. Due to a defect attributable to Digg Deeps negligence, Estes is injured in an accident in which his neighbor Fortis is also hurt. In a product liability suit based on negligence, Digg Deep may be liable to A : Estes only. B : no one. C : Estes and Fortis. D : Fortis only.

C

53 : Cookin Products Company makes heat convection ovens. DeAnn discovers that her Cookin oven is defective and sues the maker for product liability based on strict liability. To win, DeAnn must show that she A : bought the oven from Cookin. B : did not misuse the oven. C : suffered an injury caused by the defect. D : did not know of the defect.

C

60 : Camp Gear, Inc., makes and sells a camp stove to Devin. Camp Gear fails to exercise due care to make the stove safe, however, and Devin is injured as a result. Camp Gear is most likely liable for A : assumption of risk. B : commonly known danger. C : negligence. D : product misuse.

C

61 : Agro, Inc., sells seed to farmers. Bram buys and plants Agro seed on his farm, but no crop grows because the seed is defective. Bram sues Agro for product liability based on negligence. To win, Bram must show that A : Agro sold the seed to Bram. B : Bram knew and appreciated the risk caused by the defect. C : Bram suffered damage caused by the defect. D : the defect was a commonly known danger.

C

36 : Sal owns Reclamation & Restoration (R&R), a demolition company. Demolition of a Quad City brownstone by an R&R crew injures Ted, a spectator. Under the theory of strict liability, Sal must pay for Teds injury A : only if Teds injury was not reasonably foreseeable. B : only if Teds injury was reasonably foreseeable. C : only if the R&R crew was at fault. D : whether or not the R&R crew was at fault.

D

39 : Parties who can be held liable on a theory of product liability for physical injury or property damage caused by defective goods include all of the following except A : a lessor of the goods. B : a maker of the goods. C : a seller of the goods. D : a user of the goods.

D

42 : River Rock Company makes spas and hot tubs. Sterling files a product liability suit against River Rock, alleging a warning defect in one of its products. In deciding whether to hold the defendant liable, the court may take note that a manufacturer or seller has no duty to warn about risks that are A : avoidable by an alternative design. B : foreseeable. C : contrary to the instructions for the use of the product. D : obvious.

D

46 : Rose, who is obese, files a product liability suit against Burger Meal Corporation (BMC), alleging that BMCs food is unhealthy because, as Rose knows, it contains high levels of cholesterol and saturated fat. BMC can most successfully assert the defense of A : preemption. B : assumption of risk. C : comparative negligence. D : knowledgeable user.

D

49 : Island Breeze Company designs and makes desk, window, and ceiling fans. In a product liability suit based on negligence, Island Breeze could be liable for violating its duty of care with respect to all of the following except A : the design of the fans. B : the production process used to make the fans. C : the warnings on the labels of the fans. D : a consumers unforeseeable misuse of a fan.

D

55 : ClearCall Corporation makes phones, which are sold to consumers by DefDeals stores. Erna files a product liability suit against ClearCall, alleging a design defect. In deciding whether to hold ClearCall liable, the court may consider A : Ernas intended use for the phone. B : DefDeals method of accounting. C : ClearCalls quality control efforts. D : an available alternative design.

D

56 : Fleet Feet Corporation makes athletic shoes. Gloria, a marathoner, files a product liability suit against Fleet Feet, alleging a design defect. In deciding whether to hold Fleet Feet liable, the court may consider an alternative designs A : popularity among industrial designers and consumers. B : weight and heft. C : aesthetics. D : advantages and disadvantages.

D

63 : Ceramics Corporation makes ceramic products for commercial uses, including heat- resistant tiles for industrial ovens. When damage occurs in an oven at Dura-mold, Inc., liability may be imposed on Ceramics if the tiles sold to Dura-mold were A : in perfect condition at the time of their sale. B : damaged by their use. C : substantially changed after their sale. D : in a defective condition that was the proximate cause of the damage.

D

64 : SmartTalk, Inc., makes and markets cell phones and related accessories. When problems develop with SmartTalk products or sales, the company may be liable in product liability for any of the following except A : a manufacturing defect. B : a design defect. C : an inadequate warning. D : an ineffective marketing plan.

D

65 : Wideload, Inc., makes, sells, and leases trucks, trailers, and other moving and hauling equipment for consumer use. Verna files a product liability suit against Wideload, alleging a design defect. In deciding whether to hold the maker liable, the court may consider A : the assumptions of Wideload. B : the identity of Wideloads owner. C : the intentions of Wideload. D : the expectations of the ordinary consumer.

D

67 : Sea & Sail Corporation makes boats and boating supplies. Theresa files a product liability suit against Sea & Sail, alleging a design defect. In deciding whether to hold the boat maker liable, the court may consider an available alternative design based on the designs A : popularity among industrial designers. B : attractiveness to consumers. C : commonality of use. D : effect on the product.

D

68 : Safe-T Company makes electrical cords and other connectors for electronic devices. Tina files a product liability suit against Safe-T, alleging a warning defect. In deciding whether to hold Safe-T liable, the court may consider A : consumers general failure to read the products warnings. B : the plaintiffs specific failure to read the product warnings. C : the obvious risks of other products. D : the obvious risks of this product.

D