Product Liability and Warranties
Steven is a car salesman at a showroom. He is assisting Vanessa, a customer, in choosing the right car. Which of the following statements, uttered by Stephen during the course of the sale, is likely to create an express warranty in the given scenario?
"This car uses a V6 internal combustion engine"
How does having 3 different alternatives for when 3rd party non purchasers can sue is seller or manufacturer for breach of warranty give rise to unintended consequences?
1) Different outcomes are produced among jurisdictions including variations of the common law. 2) The great purpose of the UCC in promoting national uniform ity is undermined. 3) Battles over choice of law - where to file the lawsuit -are generated.
What are the similarities between full and limited warranties?
1. Both may exclude consequential damages 2. Both require the money involved in a purchase to be returned to the consumer if the product cannot be fixed on time. 3. Both require disclosure of the warranty provisions prior to sale
Preemption is typically raised as a defense in suits about what items?
1. Cigarettes 2. FDA approved medical devices 3. Motor boat propellers 4. Pesticides 5. Motor vehicles
What are two defenses to negligence that center on assigning fault?
1. Contributory negligence 2. Comparatives negligence
What authority does the Magnuson-Moss act give to the Federal Trade Commission?
1. The authority to promulgate detailed regulations to interpret and enforce it
Under Federal Trade Commission (FTC) regulations what 9 items of information must a written warranty disclose
1. The identity of the person covering the warranty, whether it is limited to the original purchaser or fewer than all who might come to own at during the warranty period. 2. A clear description of the products, parts, characteristics, components, or properties covered and where necessary for clarity, a description of what is excluded. 3. A statement of what the warrant or will do if the product fails to conform to the warranty, including items or services the warranty will pay for and, if necessary for clarity what it will not pay for. 4. A statement of when the warranty. Starts and when it expires. 5. A step-by-step explanation of what the consumer must do to realize on the warranty, including the names and addresses of those to whom the product must be brought. 6. Instructions on how the consumer can be availed of any informal dispute resolution mechanism established by the warranty. 7. Any limitations on the duration of implied warranties - since some States do not permit such limitations, the warranty must contain a statement that any limitations may not apply to the particular consumer. 8. Any limitations or exclusions on relief, such as consequential damages - as above, the warranty must explain that some States do not allow such limitations. 9. The following statement "this warranty gives you specific legal rights, and you may also have other rights which vary from state to state."
full warranty
A complete promise of satisfaction limited only in duration. The full warranty may not cover the whole product, that may cover only the hard drive-in a computer for example, it must state what parts are included and excluded. May exclude consequential damages 1. The defective product or part will be fixed or replaced for free, including removal and reinstallation 2. It will be fixed within a reasonable time 3. The consumer need not do anything unreasonable to get warranty service. 4. The warranty is good for anyone who owns the product during the period of the warrant 5. The consumer gets money back or a new product if the item cannot be fixed within a reasonable number of attempts.
Assumption of risk
A defense against negligence that can be used when the plaintiff was aware of a danger and voluntarily assumed the risk of injury from that danger. Courts uniformly hold that this is a defense for sellers against a claim a breach of warranty, while there is a split of authority over whether comparative and contributory negligence are defenses.
Preemption
A doctrine under which certain federal laws preempt, or take precedence over, conflicting state or local laws.
Contributory negligence
A legal defense that may be raised when the defendant feels that the conduct of the plaintiff somehow contributed to any injuries or damages that were sustained by the plaintiff. The UCC says that among the forms of consequential damage for which recovery can be sought is injury to person or property proximately resulting from any breach of warranty
What is the basic requirement for an express warranty to hold
A manifestation of the nature or quality of goods must become a basis of the bargain.
Unavoidably unsafe product
A product That cannot be made safe for its intended purpose given the present state of human knowledge. Because important benefits may flow from the products use, it's producer or seller ought not be held liable for its danger.
In which of the following scenarios will and unreasonably dangerous product be considered defective?
A rat poison that contains toxic substances is sold without any warnings printed on the product.
Which of the following is a difference between a warranty and strict liability?
A warranty places I consumer under the obligation to give notice to the seller within a reasonable time of any injuries, but strict liability is free of such restrictions
Implied warranty
A warranty that the law derives by implication or inference from the nature of the transaction or the relative situation or circumstances of the parties.
Comparative negligence
An affirmative defense claimed by the defendant, alleging that the plaintiff contributed to the injury by a certain degree.
Express warranty
Any manifestation of the nature or quality of goods that becomes a basis of the bargain, is created whenever the seller affirms that the product will perform in a certain manner. The formal words such as warrant or guarantee are not necessary It is a warranty over which the parties could have argued or haggled. It's a warranty that goes to the essence of the bargain.
Gateway incorporated a pesticide manufacturing company, is involved in a product liability case. Which of the following can the company used in its defense?
Assumption of risk
Which of the following can be used as a defense in strict products liability cases
Assumption of risk Courts have allowed the defense of assumption of the risks in strict products liability cases. A plaintiff assumes the risk of injury, thus establishing defense to the claim of strict products liability when he is aware the product is defective, knows the defect makes the product unreasonably dangerous, has reasonable opportunity to elect whether to expose himself to the danger, and nevertheless proceeds to make use of the product.
Which the following factors distinguishes assumption of risk from contributory negligence in cases of breach of warranty?
Assumption of risk is uniformly held by courts as a defense for sellers against a claim of breach of warranty.
What type of claims are claims of breach of express warranty?
At base, they are claims of misrepresentation
The Reasonable Design Balance
At what point safety comes into reasonable balance with performance, cost, and desirability
Why does the doctrine of privity pose a problem for warranty laws.
Because it holds that one person can sue another in a seller-buyer relationship only if they have a direct connection
Which of the following best justifies the strict liability requirement that defendant be in the business of selling?
Businesses are in the best position to spread the risks involved.
How do we generate consumer understanding of warranties?
By clearly and conspicuously disclosing the terms and conditions of the warranty and by telling the consumer what to do if his guarantee product becomes defective or malfunctions.
Which of the following parties is not covered under the strict liability rule?
Casual one time sellers
Negligence theory and products liability is useful in what two types of cases?
Defective design and defective warnings
Why do most cases dealing with product anomalies raised the failure to warn as the dispositive issue rather than raising any other issue?
Difficulty in proving that the products for defectively manufactured.
Many cases dealing with product anomalies raise the "failure to warn" as the dispositive issue. Identify the reason behind this stand.
Difficulty in proving that the products were defectively manufactured. Difficulty in proving faulty packaging is the reason why many cases dealing with product anomalies raised the failure to warn as the dispositive issue. Expert witnesses are necessary to prove that the products were defectively manufactured, and these are not always easy to come by.
To prove negligence, a plaintiff must prove breach of which duty by the defendant?
Duty of due care
What is true of an express warranty?
Formal words such as "warrant" or "guarantee" are not necessary to create and express warrant.
Green Lane Inc., Is a company involved in the business of manufacturing lawn mower. That uses the best machinery and keeps an eye out for any possible defects in its products periods even after the strictest of scrutiny, a consumer, Georgia hurts her feet while operating one of Green Lanes lawn mowers which had some manufacturing defect. Georia files a case against Green Lane. What is likely to hold in this case?
Georgia is not required to establish privity or a strict liability claim against Green Lane. Under Restatement, strict liability applies even though the user in question has not purchased the product from the seller nor has the user entered into any contractual relation with the seller.
Duty of due care
If a defendant could have foreseen injury to a particular person, she has a duty to him.
Which of the following factors will weaken a plaintiff's chances of recovery and a products liability case involving a manufacturer?
If a plaintiff suffers economic losses, and a contract imposing the duty to exercise due care is absent
What factors must be taken into account in the reasonable design balance?
If other manufacturers are marketing comparable products whose designs are intrinsically safe or, the less safe products are likely to lose the test of reasonableness in court.
An induction cooker manufactured by Neptune incorporated is subjected to a case of negligence in court. When is the product most likely to lose the test of reasonableness and court?
If other manufacturers are marketing comparable products whose designs are intrinsically safer.
What condition would defeat a plaintiffs recovery in strict products liability cases
If the user suffers economic losses, and a contract imposing the duty to exercise due care is absent.
What is the distinction between express warranties and implied warranties
Implied warranties are created by law, acting from an impulse of common sence, whereas, express warranties are created whenever the seller affirms that a product will perform in a certain manner.
What is true of implied warranties?
Implied warranties are imposed by law that comes along with the product automatically. By contrast, it is one that circumstances alone, not specific language, compel reading into the sale.
In the context of strict liability, what changes did the Restatement 3rd introduce?
It abolished the "unreasonably dangerous" test. It's substituted a risk-utility test. That is, a product is not defective and less its riskiness outweighs its utility It also now requires the plaintive to provide a reasonable alternative design to the product in question
What is the purpose of horizontal privity
It determines to whose benefit a warranty "flows".
proximately
It is a circular word - meaning nothing more than that the defendant must have been a direct enough cause of the damages that the courts will impose liability Where the andrian Bob follows the use of goods without discovery of the defect causing the damage, the question apart proximate turns on whether as reasonable for the buyer to use the good without such inspection as would have revealed the defect If it was not reasonable for him to do so, or if he did in fact discover that defect prior to his use, the injury would not be proximately result from the breach of warranty.
Negligence theory
It is a tort theory that basically means lack of due care
Which of the following is a shortcoming of the Section 402A of the Restatement?
It is limited to physical harm
What is the 1st problem with the warranty theory
It is possible to disclaim or limit the warranty
What has been established by section 402 a of the restatement in the context of strict liability?
It limits liability to sellers engag'd in the business of selling and unreasonably dangerous product. The rule is intended to apply to people and entities engaged in business, not to casual one time sellers.
Which of the following is a limitation established by section 402A of the Restatement in the context of strict liability?
It limits liability to sellers in gaged in the business of selling and unreasonably dangerous product.
Which of the following statements is true of the Magnuson-Moss Act?
It only applies to consumer products and not commercial purchasers.
What gray area does Uniform Commercial Code (UCC) 2-313 (2) allow manufacturers and sellers inhabit without having to make good on every claim?
It says that "an affirmation merely of the value of the goods or a statement purporting to be merely the seller's opinion or commendation of the goods does not create a warranty." Facts do
What was the outcome of the landmark case, Borel v. Fiberboard Paper Products Corp?
It stated that an installation work or, no less than any other product user, has a right to decide whether to expose himself to the risks involved.
What is a defense used by a manufacturer or wholesaler to a lawsuit filed by a buyer with whom these entities did not themselves contract?
Lack of privity
Which the following is likely to support a plaintiff's stand in a defective warning case related to products?
Negligence theory
The formulation of strict liability is limited to what?
Physical harm
Which of the following factors distinguishes the negligence theory from that of the warranty theory?
Pravity is never relevant in the case of the negligence theory
Identify a true statement about negligence theory
Preemption can be used as a defense in negligence cases.
Which of the following is an example of an unavoidably unsafe product?
Rabies vaccine
From the items given below, choose the correct statement related to section 402A of the Restatement of Torts (Second).
Sales of goods but not sales of services are covered under this section.
Identify the section that most courts use for the formulation of strict liability in the case of products.
Section 402A of the Restatement of Torts (Second)
Which of the following is a difference between negligence theory and strict liability?
Strict liability is applied even if a seller has exercised all possible care in the preparation and the sale of her product, whereas negligence theory depends on how reasonably the seller acted.
Which federal agency does the Magnuson- Moss act give authority to?
The Federal Trade Commission (FTC)
Which of the following is a mandatory condition for any modifications made to an implied warranty of merchantability to be valid?
The disclaimer of implied warranty merchantability should mention "merchantability" explicitly.
Distinguish between a disclaimer of implied warranty of merchatability and a disclaimer of implied warranty of fitness.
The disclaimer of implied warranty of merchantability need not be in writing, whereas, the disclaimer of implied warranty of fitness needs to be in writing
What is the common factor between limited warranty and full warranty?
The exclusion of consequential damages.
Which of the following is a factor that distinguishes strict liability from warranty protection in the case of products?
The formulation of strict liability is limited to physical harm.
Privity
The legal term for the direct connection between the seller and buyer, the two contracting parties.
Tina, a consumer, sues a pharmaceutical company after her three-year-old son gulps down a bottle of medicine manufactured by the company and fall sick. The manager of the company states that the management is not liable for any injuries caused, as the packaging mentions that one should not take more than a spoonful of medicine in a day. In this case, which of the following is most likely to be true?
The management can use assumption of risk as a defense.
Identify the hurdle that will make a warranty case difficult to prove.
The notion that it must have been reasonable for a buyer to use goods without inspection.
Drugco Co. is a pharmaceutical company. It manufactures pills that are usually prescribed for depression cases. These pills can prove to be fatal when patients take more than the prescribed dosage. And this case, which of the following is likely to be true if Drugco fails to display adequate dosage warnings?
The pills will be considered defective, and Drugcocan be held liable for failing to display adequate dosage warnings.
Identify a true statement about common law defenses against negligence.
The plaintiff must prove proximate cause.
A pesticide manufacturing company prints on the labels of its products that it can cause damage if consumed by humans. Which of the following will hold in this case?
The product is unavoidably unsafe
A particular rat poison can cause damage if consumed by humans. The manufacturer of this poison has clearly printed the side effects of the product and the required preventative measures. Identify the true statement in this case.
The product is unavoidably unsafe.
Tim, a bike enthusiast had modified his new bike. He had met with an accident soon after. He filed a case of negligence against the bike manufacturers. In this case, which of the following defenses can the manufacturers use?
The product was altered by the plaintiff
Sue sells a brand new butcher knife to a customer but it could not be used to cut meat. Which of the following tests that the knife sold by Sue fail?
The reasonable expectation test
Which of the following relationships is an example of vertical privity
The relationship between a buyer and retailer.
CISG article 35
The seller must be labor goods which are of the quantity, quality comment and description required by the contract and which are contained or packaged in the manner required by the contract. The goods must possess the qualities of goods which the seller has held out to the buyer to be a sample or model.
Anita's seeks the help of a store manager for choosing a modem that is compatible with her laptop. After hearing the technical specifications of the laptop, the store manager gives her a modem. When Anita tries to use her new wireless modem, she realizes that it is incompatible with her laptop. In this case, which of the following statements is most likely to be true?
The store manager has breached the implied warranty of fitness for a particular purpose.
Based on the outcome of the landmark case "Boral v. Fiberboard Paper Products Corp," which of the following would hold for a company selling asbestos.
The workers at the asbestos manufacturing factory have the right to choose whether to expose themselves to the possible carcinogens.
What are the elements of negligence theory?
Their concern over reasonableness and standards of care
Which of the following is true of comparatives negligence and cases involving a breach of warranty?
There is a split of authority over whether comparatives negligence is a defense.
What is a defining characteristic of an unreasonably dangerous product?
These are products that are dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it.
Roger, a consumer, buys a car tire and is thus entitled to the implied warranty accompanying the product. Which of the following is typically true of implied warranties?
They are imposed by law
Mary is a salesgirl at a department store. Which of the following stated by Mary to a customer can create an express warranty?
This container is made of stainless steel.
Why was the Magnuson-Moss Warranty Act created?
To clear up confusing and misleading warranties related to consumer products.
Select one of the missions of the Federal Trade Commission (FTC)
To enhance informed consumer choices and public understanding of the competitive process. Its mission is to prevent business practices that are anti competitive or deceptive or unfair to consumers; to enhance informed consumer choices and public understanding of the competitive process; and to accomplish this without unduly burdening legitimate business activity.
Suppose a cell phone manufacturing company produces 2000 cellphones per hour following all the standards of quality and safety. The plant is state-of-the-art and its computerized quality control operation is the best in the world. Despite all the care taken, it is not possible to weed out all defective phones and one phone out of 1 million still escapes detection. Assume that 1 such defective cell phone explodes when handled by a consumer. Under which of the following will the manufacturers be held responsible for the explosion and forced to pay dues to the customer?
Under strict liability
Identify a true statement about strict liability and contractual relation under Reinstatement
Users may use the theory of strict liability against manufacturers and wholesalers as well as retailers. Under restatement strict liability applies even though a user has not purchase the product involved in a dispute from a seller nor has the user entered into any contractual relation with the seller. In short, privity is abolished, and the injured user may use the theory of strict liability against manufacturers and wholesalers as well as retailers. The restatement explicitly leaves open the question of the bystanders right to recover under strict liability.
Many courts have held that a person who suffers economic loss must resort to what?
Warranty law
What is an issue associated with strict liability?
Warranty must be given a new and different meaning if it is used in connection with strict liability. It is much simpler to regard the liability here stated as merely one of strict liability in tort
Identity the instance in which a manufacturer is liable for a defective product
When a buyer consumes food that was spoiled because of improper packaging
When is a seller most likely to be held liable under strict liability?
When a product deteriorates before use due to faulty packaging
Which of the following instances has sufficient ground to hold a seller liable under strict liability?
When a product deteriorates before use due to the use of ineffective preservatives.
When is an express warranty likely to be created?
When a seller describes how a product is likely to function. 1. An affirmation of a fact or promise relating to the goods 2. A description of the goods 3. A sample or model When the seller States that the goods will conform to the fact, promise, description, sample, or model
Under which of the following instances is a defendant held liable for breach of warranty?
When the and jury to a person or property proximately results from the defendant's action.
When is a court most likely to hold a seller to an express warranty?
When the standards of the statement stated by them are specific and measurable.
Zap Corp is a manufacturer of pesticides, which contain poisonous substances. It fails to display warnings for its new product, which contains toxic substances that are fatal. Which of the following statements is true in this case?
Zap corpse new products are considered a defected, as it fails to warn consumers of potential dangers.
Federal trade commission FTC
a federal agency empowered to prevent persons or corporations from using unfair methods of competition in commerce
Limited warranty
a warranty that excludes certain parts of the product from coverage or requires the customer to bear some of the expense for repairs resulting form defects. A less than full warranty May exclude consequential damages
horizontal privity
doctrine determining who benefits from a warranty and who therefore may bring a cause of action; the Code provides three alternatives, given to states, to determine outcome: A) Says that "a seller's warranty extends to any natural person who is in the family or household of his buyer or who has a guest in his home" provided (1) It's reasonable to expect the person suffering damages to use karma consume karma or be affected by the goods and (2) The warranty extends only to damages for personal injury. B) Extends to any natural person who may be reasonably expected to use karma consumed, or be affected by the goods common and who is injured in person by breach of the warranty- This option is less restrictive and extends protection to people beyond those in the buyer's home. Does not provide protection for organizations. C) This alternative is the same as "B" except that it applies not only to any natural person but to any person who is injured by the breach of the warranty. This is the most far reaching alternative because it provides redress for damage to property as well as for personal injury, and it extends protection to corporations and other institutional buyers.
Strict products liability
the cause of action under which commercial sellers of defective products are held liable without negligence It is an example of necessary paternalism judicially shifting risk of loss by application of tort doctrine because the UCC scheme fails to adequately cover the situation