Chapter 13: Product Advertising and Liability
Ariel McClellan was using an underarm-aerosol deodorant one morning while smoking a cigarette. The deodorant had this warning in large letters on the side of the can: "DO NOT USE AROUND HEAT, FLAME OR WHILE SMOKING." The deodorant ignited McClellan's cigarette in her hand and the flames quickly spread to her silk robe. McClellan was severely burned and will have permanent scarring. Who is liable for her injuries? a. The cigarette manufacturer. b. Ariel is responsible. c. The deodorant manufacturer. d. The manufacturer of her silk robe.
B.
Emma and her friends bought fireworks for a big Fourth-of-July celebration. While setting off some of the fireworks, the wind blew the sparks into a tent setting it on fire. The fire then spread to their house doing $200,000 worth of damage before it could be put out by the fire department. Emma is now suing the maker of the fireworks. What would be the best defense for the fireworks manufacturer? a. Misuse of product. b. Assumption of risk. c. Contributory negligence. d. Comparative negligence.
B.
Sierra decided to paint her house. She gave the sales clerk at DYI Warehouse a swatch labeled "sunshine yellow" and asked them to mix it using Hitone brand paint. When she arrived home and opened the can, they were a greenish-blue color that she did not like. She took the cans back to the store and asked for her money back. The clerk refused but said he could re-mix the paint and she could buy 5 more cans. Which of the following is true? a. Hitone brand paint is in violation of the implied warranty of merchantability. b. DYI Warehouse is in violation of the implied warranty of fitness for a particular use. c. There is no warranty violation in this case. d. Sierra is in violation of the warranty of disclaimers.
B.
Hunter bought a new Turfmate brand lawn mower from Equipment Depot. While mowing the lawn, the blade stopped moving. Hunter tipped over the mower, and gave the blade a push with his hand despite the warning on the mower not to tip over the mower or touch the blades. The mower started back immediately and Hunter's hand was severely cut. Who will be liable for Hunter's injuries? a. Equipment Depot. b. Turfmate c. Hunter. d. Both Turfmate and Equipment Depot.
C.
Justin saw an ad from Big Buys Electronics stating that they had brand new computers for only $250. When he went to Big Buys to purchase the computer, he was told that they only had one of those and it had already been sold. But the salesperson showed him some other computers and Justin ended up paying $550 for a computer. When Justin got home, he realized he had been conned into buying a more expensive computer. Which unlawful sales tactic was he a victim of? a. Puffery. b. Implied warranty of merchantability. c. Bait and switch. d. None, he should not have let the salesman convince him to purchase a different one.
C.
TorF "This car has the finest workmanship money can buy" is an example of an express warranty.
FALSE
TorF Bait and switch is not a deceptive advertising technique.
FALSE
TorF Corrective ads can be required only when competition is affected.
FALSE
TorF Corrective advertising, when ordered by a government agency, is unconstitutional.
FALSE
TorF In comparative advertising, a company cannot be held liable for misrepresentations regarding products other than its own.
FALSE
TorF Proof for a breach of the warranty of merchantability suit requires establishment of the fact that the product was in a defective and unreasonably dangerous condition.
FALSE
TorF Section 402A permits suits only by those in privity of contract.
FALSE
TorF Strict tort liability under Section 402A is the same as negligence.
FALSE
TorF The Federal Trade Commission does not have the authority to halt deceptive ads.
FALSE
TorF The implied warranty of fitness for a particular purpose is given in every sale by a merchant.
FALSE
TorF The implied warranty of fitness for a particular purpose is given in every sale of goods by a merchant.
FALSE
TorF There can be no recovery on the basis of a breach of a UCC warranty by anyone other than the actual buyer.
FALSE
TorF Today, courts follow a policy of caveat emptor in handling product liability cases.
FALSE
TorF Today, courts require privity of contract for recovery in product liability cases.
FALSE
TorF "Stops assailants dead in their tracks," written on the package for a mace product, is an express warranty.
TRUE
TorF A consent decree is similar to a no-contest plea in a criminal proceeding.
TRUE
TorF A disclaimer of liability for personal injuries caused by a breach of warranty would be unconscionable.
TRUE
TorF A product can be defective if proper warnings about its use are not given.
TRUE
TorF Ads by members of professional groups can be regulated by the state.
TRUE
TorF Ads can be a basis for an express warranty.
TRUE
TorF Caveat emptor is a Latin term meaning "let the buyer beware."
TRUE
TorF Celebrity endorsements of products are deceptive unless the celebrity has used the product.
TRUE
TorF Express warranties cannot be disclaimed.
TRUE
TorF Federal trademark law provisions provide remedies for companies whose products are misrepresented in comparative advertising.
TRUE
TorF Improper packaging that results in an injury can be a basis for product liability.
TRUE
TorF Misuse of a product is a defense in a product liability suit.
TRUE
TorF Privity is not a requirement for recovery in a product liability case.
TRUE
TorF Privity of contract is a direct contractual relationship between the parties.
TRUE
TorF Proof of negligence in product design or manufacture allows recovery of punitive damages.
TRUE
TorF The Federal Trade Commission is responsible for the regulation of deceptive advertising.
TRUE
TorF The Federal Trade Commission was originally only permitted to regulate ads that affected competition.
TRUE
TorF The implied warranty of merchantability (unless disclaimed) is given in every sale of goods by a merchant.
TRUE
TorF The language "as is" disclaims both the warranty of merchantability and the warranty of fitness for a particular purpose.
TRUE
TorF These dresses are 100% cotton" is an example of an express warranty.
TRUE
TorF To establish an express warranty under the UCC, the buyer must produce evidence that the seller used the term "warrant" or "guarantee."
TRUE
Bait and switch: a. is a sales tactic of advertising a cheaper product in order to get a customer in to buy a more expensive product. b. is not based on ad content. c. is not regulated by the FTC. d. none of the above
a.
Lowe's advertised a barbeque grill for $99 in its newspaper ad. When the Smith's arrived at Lowe's to buy the barbecue, a Lowe's salesman said, "Oh, we don't have any in stock. But, what you need is this model for $149." Lowe's had no $99 barbecues in stock, even before the ad was placed. a. Lowe's has engaged in bait and switch. b. Lowe's has breached an express warranty. c. Lowe's has violated the implied warranty of merchantability. d. none of the above
a.
Pestro is the manufacturer of a weed killer that is used in the parks in Metroville. After the parks were sprayed, a group of children became ill and required hospitalization. Two dogs that had been with the group died. The parents of the children and the dog owners could: a. bring suit against Pestro under 402A even though there is no privity. b. not bring suit against Pestro because of a lack of privity. c. not bring suit against the city. d. none of the above
a.
Privity in negligence product liability cases is: a. not required. b. more stringent than in UCC cases. c. determined by the relationship of the injured party to the buyer. d. none of the above
a.
Privity of contract: a. means a direct contractual relationship between the parties. b. is required for recovery on a UCC warranty theory. c. is required for recovery under section 402A. d. none of the above
a.
Product misuse is a defense in product liability: a. unless the misuse is the result of a failure to warn. b. unless it is a negligence action. c. unless it is a warranty action. d. unless the state follows Section 402A. e. none of the above
a.
Susan Hewitt is eating a bowl of cream of broccoli soup in a bistro when she notices a portion of a caterpillar on her spoon. Susan's best basis for recovery is: a. implied warranty of merchantability. b. negligence. c. implied warranty of fitness for a particular purpose. d. none, there is no privity
a.
The Wheeler-Lea Act: a. expanded the FTC's authority to regulate advertising. b. limited the FTC's authority to regulate only ads that affected competition. c. eliminated the FTC authority to require corrective ads. d. none of the above
a.
The implied warranty of merchantability requires: a. proof that the seller is a merchant. b. proof that the buyer relied on a merchant. c. proof of a defective product. d. all of the above
a.
Which of the following does not constitute an express warranty? a. "This car will give you a great deal of satisfaction." b. "This car is equipped with Michelin radial tires." c. "This car goes from 0 to 60 mph in 10 seconds." d. All of the above are express warranties.
a.
Which of the following phrases is an express warranty? a. "boned chicken" b. "Maine's finest" c. "Best in the West" d. All of the above are express warranties.
a.
"These cartons will hold up to 100 pounds of books" is an example of: a. an implied warranty of merchantability. b. an express warranty. c. misrepresentation. d. privity.
b.
A candle has the following label: "NEVER LEAVE A BURNING CANDLE UNATTENDED." The warning: a. is not necessary to prevent liability on the part of the maker. b. would not cover a defect in the candle's manufacture. c. is an example of a warning needed to prevent liability for negligence only. d. all of the above
b.
Corrective advertising: a. is unconstitutional. b. is one of the FTC's many remedies. c. has never been ordered by a court. d. none of the above
b.
Dam Good Adventures operates a helicopter tour business near Lake Mead, Nevada. Lake Mead is the site of Hoover Dam. Dam Good has purchased 5 helicopters over the 214 years it has been in business and its mechanic has rebuilt the engines on all of the helicopters. In addition, Dam Good's mechanic has altered the timing mechanisms on the helicopters so that they are able to hover longer and with less noise, two features that are important for tourists. One of Dam Good's helicopters crashed over Lake Mead, killing the pilot and the four passengers on board. Which of the following statements is correct? a. The manufacturer is always liable for a products liability claim. b. The alteration of the helicopters is a potential bar to recovery from the manufacturer. c. Dam Good is jointly liable with the manufacturer for negligence for its alteration to the helicopter. d. Neither Dam Good Adventures nor the manufacturer is liable because of the assumption of the risk by the tourists.
b.
For an injured party to recover for breach of a UCC warranty under the UCC: a. there must be privity of contract. b. even under the strictest alternative, the party can be a guest. c. he/she must be a natural person. d. none of the above
b.
Ralph Walters wanted to begin an exercise program and decided to enroll in a local aerobics class. He was told that he would need proper aerobic work-out shoes. Ralph went to an athletic shoe store and explained his needs to the sales clerk and also added that since he had never done aerobics, he was unsure what type of shoe he would need. The sales clerk recommended a shoe that Ralph purchased. When Ralph arrived at aerobics class, his instructor said his shoes were not appropriate for aerobics and that Ralph might injure himself if he used them for the workout. When Ralph returned to the store with the shoes, the store refused to exchange them, citing the three-day limitation on returns. Suppose Ralph's sales receipt had stamped on it in red letters "AS IS." The shoe store: a. has breached the implied warranty of fitness for a particular purpose and is required to refund Ralph's money or exchange the shoes. b. is within its rights to refuse to take the shoes back. c. has not breached any warranty since Ralph had no contract with any promises written in it. d. none of the above
b.
Ralph Walters wanted to begin an exercise program and decided to enroll in a local aerobics class. He was told that he would need proper aerobic work-out shoes. Ralph went to an athletic shoe store and explained his needs to the sales clerk and also added that since he had never done aerobics, he was unsure what type of shoe he would need. The sales clerk recommended a shoe that Ralph purchased. When Ralph arrived at aerobics class, his instructor said his shoes were not appropriate for aerobics and that Ralph might injure himself if he used them for the workout. When Ralph returned to the store with the shoes, the store refused to exchange them, citing the three-day limitation on returns. The shoe store: a. is within its rights to refuse to take the shoes back. b. has breached the implied warranty of fitness for a particular purpose and is required to refund Ralph's money or exchange the shoes. c. has not breached any warranty since Ralph had no contract with any promises written in it. d. none of the above
b.
The U.S. Army purchased a large number of Bell Jet Ranger helicopters in 1963. Many of the helicopters served tours of duty in Vietnam and after the war were returned to the United States. Because of damages sustained during the war, many of the helicopters' engines were rebuilt. In 1974, one of the helicopters with a rebuilt engine crashed because of engine failure. The families of the two servicemen killed in the accident wish to recover from Bell under 402A. What defense could Bell probably successfully allege? a. misuse of the product b. product modification c. assumption of risk d. none of the above
b.
The UCC warranty of merchantability: a. does not cover sales of food in restaurants. b. can be disclaimed by using the term "as is." c. is made in every sale of goods. d. none of the above
b.
The sellers of "Acne-Statin," a skin cream, claim in their ads that their cream "cures acne." The American Association of Dermatologists has determined that there is no cure for acne, only creams that can curb breakouts. The ad claims: a. are simply puffery. b. breach an express warranty. c. do not violate any FTC rules. d. none of the above
b.
Which is a requirement for an express warranty? a. use of the word "warrant" or "guarantee" b. a description or promise of performance c. written statement d. must be made by a merchant
b.
Which of the following actions cannot be taken on comparative advertising that is misleading? a. the FTC can seek an injunction b. the FTC can seek criminal penalties c. the manufacturer of the product that is compared can bring suit d. All of the above actions can be taken.
b.
Which of the following is/are an express warranty(ies)? a. "This sofa is the most comfortable ever built." b. "This grill can give you 500° F of heat." c. "This car has more pep than any other, especially on hills." d. All of the above are express warranties.
b.
Woeste ate raw oysters at a restaurant and died a week later from the bacteria Vibrio vulnificus. The bacteria naturally occur in oysters from warm water. Vibrio has no effect on most people, but can be fatal to people with a weak immune system—as Woeste had due to Hepatitis C and cirrhosis of the liver. The restaurant menu warned of the danger of eating raw oysters, especially for persons with "chronic illness of the liver." Woeste ordered without reading the menu warning. His estate sued the restaurant and the Texas company that harvested the oysters for negligence and strict liability. What is the likely outcome? a. The restaurant is liable for failure to warn of every possible risk. b. The restaurant is not liable to the estate of Woeste. c. The restaurant breached its implied warranty of merchantability by serving a dangerous product. d. The restaurant is liable under strict liability for selling a dangerous product.
b.
Jill DesJardines experiences a broken leg when one of the wheels on her new in-line skates falls off as she is skating. Suppose that Jill had been using the skates for one year when the wheel fell off. Which of the following best summarizes the manufacturer's liability? a. There is no liability because of assumption of risk. b. There is no liability because the skates are one-year old. c. There could be liability if the wheel fell off due to defective design and there is no change in the design over the course of the last year. d. There is no liability because manufacturers are excused from liability when there is passage of this much time. e. none of the above
c.
Jill DesJardines experiences a broken leg when one of the wheels on her new in-line skates falls off as she is skating. The manufacturer: a. is not liable because Jill assumed the risk of in-line skating. b. can disclaim all such liability for products such as these skates. c. is liable for a defective product. d. both a and b e. none of the above
c.
The 2008 act that includes some regulations on the resale of goods is the: a. Consumer Product Safety Act. b. Consumer Product Resale Safety Act. c. Consumer Product Safety Improvement Act. d. Consumer Product Resellers Inclusion Act.
c.
The FTC controls on product comparisons: a. are very stringent. b. are a high regulatory priority. c. have changed dramatically with private enforcement. d. no longer exist.
c.
The Joneses are interested in purchasing new carpet for their family room and note an ad in the paper from Carpet World for carpet at $9.99 per square yard, with pad, fully installed. When the Joneses go to Carpet World, the salesman tells them there is a handling fee of $2.99 per square yard on the advertised special, but he can show them a better carpet for $14.99 per square yard. Which of the following statements is true? a. Since the Joneses are free to leave and buy elsewhere, there are no FTC violations by the ad. b. If the Joneses choose the $14.99 carpet, there is no violation of FTC regulations. c. Carpet World's ad and tactics constitute bait and switch. d. none of the above
c.
The opposite of caveat emptor is: a. negligence. b. privity requirements. c. strict tort liability. d. none of the above
c.
The term "AS THEY STAND" serves to disclaim: a. the implied warranty of merchantability. b. the implied warranty of fitness for a particular purpose. c. both a and b d. none of the above unless it is in writing
c.
When Toyota delayed in issuing a recall for certain vehicles with suspected sudden unintended acceleration problems, Toyota faced a(n): a. legal but not ethical problem. b. ethical but not legal problem. c. ethical and legal problem. d. public relations problem but no ethical or legal problems.
c.
Which of the following is not a remedy available to the FTC? a. injunctions b. corrective ads c. criminal penalties d. All of the above are remedies available to the FTC.
c.
Which of the following is not an example of an express warranty? a. "This jacket is lined." b. "This water heater holds 50 gallons." c. "This toothpaste makes teeth the whitest around." d. "Preshrunk jeans."
c.
Which of the following is not an express warranty? a. "These shelves hold up to 300 lbs. each." b. "This fingerpaint will wash out of clothes with just soap and water." c. "This sweater is made of the finest materials." d. All of the above are express warranties.
c.
"As is" written in a contract: a. serves to disclaim the implied warranty of merchantability. b. serves to disclaim the implied warranty of fitness for a particular purpose. c. has no effect on warranty protection. d. both a and b e. none of the above
d.
"With all faults" serves to disclaim: a. an express warranty. b. liability under 402A. c. liability for negligence. d. none of the above
d.
A company is liable for a design defect in its product only if: a. it was aware of the design defect. b. the design defect has caused a previous injury. c. there was negligence in the product testing. d. none of the above
d.
Arrion McClellan was using an underarm-aerosol deodorant one morning while smoking a cigarette. The deodorant had this warning in large letters on the side of the can: "DO NOT USE AROUND HEAT, FLAME OR WHILE SMOKING." The deodorant ignited McClellan's cigarette in her hand and the flames quickly spread to her silk robe. McClellan was severely burned and will have permanent scarring. Who is liable for her injuries? a. the deodorant manufacturer b. the cigarette manufacturer c. the manufacturer of her silk robe d. none of the above
d.
Contributory negligence: a. can be a partial defense in product liability cases for negligence. b. is the same as comparative negligence. c. is no longer permitted as evidence in suits. d. none of the above
d.
Negligence product liability cases: a. are the same as 402A cases. b. have no defenses. c. require proof of privity. d. none of the above
d.
Section 402A covers: a. manufacturers. b. retailers. c. those who sell products out of their home. d. all of the above
d.
Susan Sandren purchased a toaster from Standard Electric. While using the toaster the day after it was purchased, Susan discovered that the toaster slots were too small for a thick piece of bread. The bread was stuck in the slot. With the toaster still plugged in, Susan used a knife to pry loose the toast and was electrocuted. In a suit by her family against Standard Electric: a. Standard will lose because the slots should have been made wider. b. Standard will win because of misuse of the product. c. Susan's family will win because of a design defect. d. Susan's family would win if there were no warnings about knives and electrocution.
d.
The implied warranty of fitness for a particular purpose requires: a. proof that the seller made the first contact with the buyer. b. proof that the seller used the term "warrant." c. proof that the seller is a merchant. d. none of the above
d.
Two experienced welders were working inside a barge. Both had received training in their respective trade, and safety training required by the government and the company. The company regularly stressed the importance of safety procedures to prevent accidents. A gas hose leading to the welding torch developed a leak that the workers apparently could not smell because of "nasal fatigue" from having inhaled so much gas. One worker lit a cigarette, igniting the gas, killing both workers. The workers' heirs sued the gas and gas hose producers in strict liability. Was either company liable? a. No, because only one company can generally be liable in this type of accident. b. Yes, because there was likely a defect in the hose that could have been prevented. c. Yes, because this type of accident does not happen to experienced workers. d. No, because of the negligence of the employees.
d.
What is the maximum civil penalty the Consumer Product Safety Commission can assess against a company for violations of the Consumer Product Safety Act? a. $2,000 b. $50,000 c. $500,000 d. none of the above
d.
Which of the following does not constitute an express warranty? a. "This computer system is accessible by a PB2400 modem." b. "This computer system is IBM-compatible." c. "This computer system has a built-in battery back-up system that gives you two minutes to save files in the event of a power interruption." d. All of the above are express warranties.
d.
Which of the following duties could not be a basis for a negligence suit? a. hotel to guest b. physician to patient c. accountant to client d. All of the above parties have duties.
d.
Which of the following is an example of an express warranty? a. "Guaranteed to bring the most happiness to any home." b. "Simply the best donut you'll ever eat." c. "Brings friends running to you." d. none of the above
d.
Which of the following is not an express warranty? a. "fireproof" b. "waterproof" c. "puncture-proof" d. All of the above are express warranties.
d.
Which of the following is not regulated by the FTC? a. content accuracy b. celebrity endorsements c. performance claims d. express warranties e. All of the above are regulated by the FTC.
d.
Which of the following is not required of a celebrity who will be endorsing a product? a. verification of the claims to be presented b. actual use of the product c. disclosure of source of claims not known personally by the celebrity d. All of the above are required.
d.
Which of the following issues in advertising is not regulated by the FTC? a. accuracy of ad content b. accuracy of performance claims c. celebrity endorsements d. All of the above are regulated by the FTC.
d.
Which of the following items can be sold now by a reseller? a. A recalled item not purchased originally by the reseller b. A product intended for children containing lead paint c. A product intended for children containing phthalates d. None of these
d.
Which of the following terms is not an express warranty? a. "nonskid" b. "nonbreakable" c. "shelled" d. All of the above are express warranties.
d.
Which of the following would be a "defect" for purposes of 402A? a. failure to warn not to put a hair dryer in water b. food package that permits tampering c. a missing bolt on a car steering column d. all of the above
d.
Which of the following would not be a basis for a negligence product liability suit? a. a highly explosive gas tank installed in a car with the manufacturer's prior knowledge of its dangers b. the continued sale of sunglasses to baseball teams knowing the sunglasses shatter c. the continued sale of gas pipelines to utilities in the Southwest after explosions caused by peculiar interactions of the pipe with the soil and heat d. All of the above would be negligence product liability suits.
d.
Which of the following would not be a breach of the warranty of merchantability? a. a piece of garden snake in a box of frozen green beans b. a caterpillar in broccoli soup purchased at a restaurant c. a milk carton that leaks d. All of the above are breaches of the implied warranty of merchantability.
d.
H.G. Ilk owned a 1965 Ford Mustang. He had replaced the front seats, the engine and the transmission. In an accident in which he was rear-ended, the front driver's seat collapsed, leaving Ilk with permanent injuries. It was discovered that the seat, manufactured by the Fisher Company, was defective in that the frame was partially missing due to a production error. Who is liable for Ilk's injuries? a. Ford Motor Company b. Fisher Company c. the other driver d. both a and b e. both b and c
e.