Legal Environment of Business chapter 7

In what year did the courts begin changing the legal standard from negligence to strict liability in tort?

1963.

Strict liability under contract law for injuries caused by defective products is imposed on the basis of what theory?

Based on existence of warranty (implied warranty, express warranty)

In product defect cases, what does liability based on negligence require?

Caveat Emptor which means, "let the buyer beware" Injured parties who did not have privity of contract with the manufacturer of the defective products operated under the rule caveat emptor.

What was the outcome in the Collins v. Eli Lilly case? Were all makers of the drug potentially liable?

Collins took the drug. It was hard to find out who manufactured the pill. The makers of the drug could all be liable.

What is the theory of liability if the manufacturer or seller of a product makes factual assertions about the product and it does not meet those expectations

Express Warranty

What was the outcome of Baxter v. Ford Motor Co.? What was the cause of action (theory of liability) based on?

Ford made a statement which misinterpreted the window. "Triple shatterproof glass." Express warranty

How does market share liability work?

Joint and several Liability: it may be applied where two or more defendants are found liable for damages. The plaintiff may collect the entire judgement from any one of the defendants or from any and all of the defendants in varying amounts until the judgment is paid.

Does negligence as a theory of liability require intent on the part of the manufacturer to produce an unsafe product?

Manufacturers must produce products using proper care to eliminate foreseeable harm or they risk being found negligent in tort if a customer is injured by a defective product. A manufacturer is required to exercise reasonable care in the production of its product.

Is a plaintiff required to demonstrate the element of negligence in a case based upon strict liability in tort? Is the manufacturer free of liability if it exercised reasonable care?

No.

What is privity? What is meant by the term privity of contract?

Privity is the legal term for a close, mutual, or successive relationship to the same right of property or the power to enforce a promise or warranty. Refers to relationship between the parties to a contract which allows them to sue each other but prevents a third party from doing so. OF REQUIRED CONTRACT FOR LIABLITY 1916

Are there any defenses in cases brought using strict liability in tort? Must manufacturers pay damages any time a consumer is injured?

Product abuse and misuse. Assumption of risk, Sophisticated purchase

Strict liability in tort was described and defined by the American Law Institute (ALI) in what document?

Section 402A in the Restatement (Second) of Torts

What is a manufacturing defect and when is liability imposed for injuries in such cases?

Someone buys a new toaster, plugs it in, and is electrocuted because of a defect in the product from the manufacturing stage. Consumers do not expect such defects and will be compensated for them. Producers rarely argue such cases. The restatement makes clear that liability is imposed when a product comes off the assembly line with a defect that makes it dangerous to any user. It is other areas greater uncertainty that we study in more detail next.

What is strict liability in tort?

Strict liability maybe imposed today under contract law. This can be the basis for a strong liability suit. However, the plaintiff' can be faced with the problem of showing a warranty existed.

What were the two major holdings developed in the case of MacPherson v. Buick Motor?

That if you produce the final product you are liable for that product. You need to make sure that your product is the best. You better inspect your product to make sure you have the best product out in the world. Manufacturer expected to exercise reasonable care, must reveal defects/dangers

What types of harms is the law of product liability concerned with?

The concerns are the liability that producers and sellers of goods have to those injured by their products. Because some cases involve thousands of people and billions of dollars, product liability gets a lot of media attention. DEFECTIVE PRODUCTS

What is an unknown hazard? Are manufacturers liable for injuries due to unknown hazards?

The largest dollar volume and greatest number of product liability cases are based on unknown hazards or latent defects-dangers that were not known or not fully appreciated at the time the product was manufactured. Because the hazard associated with the product may not be learned for years, neither the producer nor the consumer may be able to prevent injury.

When is liability imposed due to a manufacturer's failure to warn?

This applies where the manufacturer knows of a danger caused by the product's use that cannot be prevented entirely, but about which users could be warned. For example, lawn mowers now routinely have warning labels telling users not to try to unclog blocked grass discharge chutes while the mower is running.

What is the focus when cases deal with design defect?

Unlike defective product cases, design product cases are not concerned with a product that has been poorly manufactured and causes an injury. Rather, such cases focus on the determination of whether an injury to users could have been prevented by designing the product differently.

Can a manufacturer or seller of a product be liable for failure to warn when warnings are clearly and conspicuously displayed on the product packaging in plain English?

YES they have done all the right things in order to protect the customers. Well it could also be liable because if they cannot read. This guy stole rat poison and thought it was cereal and fed it to his children and they died. The company was liable for this because they did not have a sign on it with a big X. That indicates now that this is not something you eat. The company had to change how they packaged their products

Can businesses be sued in lawsuits based on tort law?

Yes they can be

Was Buick liable for a defective component supplied by an outside vendor that was installed on its automobile?

Yes, they were found liable for the injury. The judge in new York city said that if you produce the product you are liable for that product.