Business Its Legal, Ethical, and Global Environment: Chapter 14. All Answers - $8.99   Add to cart

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Business Its Legal, Ethical, and Global Environment: Chapter 14. All Answers

Business Its Legal, Ethical, and Global Environment: Chapter 14 1. Caveat emptor is a Latin term meaning "let the buyer beware." a. b. : 1 Easy United States - BUSPROG:Analytic : United States - OH - AICPA: BB-Legal Development of Product Liability : Bloom's: Knowledge 2. Today, courts follow a policy of caveat emptor in handling product liability cases. a. b. : 1 Easy United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Development of Product Liability : Bloom's: Knowledge 3. Privity of contract is a direct contractual relationship between the parties. a. b. : 1 Easy United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Knowledge 4. Today, courts require privity of contract for recovery in product liability cases. a. b. : 1 Easy United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Knowledge 5. To establish an express warranty under the UCC, the buyer must produce evidence that the seller used the term "warrant" or "guarantee." a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Comprehension 6. The implied warranty of fitness for a particular purpose (unless disclaimed) is given in every sale of goods by a merchant. a. b. : 1 Easy United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Knowledge 7. The implied warranty of merchantability (unless disclaimed) is given in every sale of goods by a merchant. a. b. : 1 Easy United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Knowledge 8. The language "as is" disclaims both the warranty of merchantability and the warranty of fitness for a particular purpose. a. b. : 1 Easy United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Knowledge 9. "These dresses are 100% cotton" is an example of an express warranty. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Application 10. "This car has the finest workmanship money can buy" is an example of an express warranty. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Application 11. A product can be defective for purposes of liability for injury if proper warnings about its use are not given. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Comprehension 12. Improper packaging that results in an injury can be a basis for product liability. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Comprehension 13. Privity is required for recovery on the basis of warranty. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Knowledge 14. When a customer tells a pet store employee that she wants two female gerbils, but receives one male and one female gerbil who later have baby gerbils, the pet store has breached the implied warranty of fitness for a particular purpose. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Contract Product Liability Theories: Implied Warranties : Bloom's: Application 15. There can be no recovery on the basis of a breach of a UCC warranty by anyone other than the actual buyer. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Comprehension 16. A lack of adequate warnings can be a defective product. a. b. : 1 Easy United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Knowledge 17. Misuse of a product is a defense in a product liability suit. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Defenses to Product Liability Torts : Bloom's: Application 18. Strict tort liability under Section 402A is the same as negligence. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 19. A sale of a toaster at a garage sale is covered by the warranty of merchantability. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Application 20. Section 402A permits suits only by those in privity of contract. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Comprehension 21. Proof of negligence in product design or manufacture allows recovery of punitive damages. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Comprehension 22. 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. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Comprehension 23. Express warranties cannot be disclaimed. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Knowledge 24. A disclaimer of liability for personal injuries caused by a breach of warranty would be unconscionable. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Knowledge 25. "Stops assailants dead in their tracks," written on the package for a mace product, is an express warranty. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Application 26. The Federal Trade Commission is responsible for the regulation of deceptive advertising. a. b. : 1 Easy United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Knowledge 27. Private parties can enforce the FTC regulations on comparative ads. a. b. : 1 Easy United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Knowledge 28. Stating a lamp is a “Tiffany lamp” and stating it is “in the Tiffany style” are both making the same kind of warranty. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Application 29. Bait and switch is not a deceptive advertising technique. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Comprehension 30. A consent decree is similar to a no-contest plea in a criminal proceeding. a. b. : 1 Easy United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Knowledge 31. Celebrity endorsements of products are deceptive unless the celebrity has used the product. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Application 32. The Federal Trade Commission does not have the authority to halt deceptive ads. a. b. : 1 Easy United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Knowledge 33. In comparative advertising, a company cannot be held liable for misrepresentations regarding products other than its own. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Comprehension 34. Ads can be a basis for an express warranty. a. b. : 1 Easy United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Knowledge 35. Toyota had no ethical obligation to issue a recall on its vehicles with sudden unintended acceleration problems because Toyota did not manufacture the parts that caused the problems. a. b. : 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 36. Corrective ads can be required only when competition is affected. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Comprehension 37. Ads by members of professional groups can be regulated by the state. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Knowledge 38. The Consumer Product Safety Improvement Act of 2008 includes rules covering the resale of goods such as in a garage sale. a. b. : 1 Easy United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Federal Standards for Product Liability : Bloom's: Knowledge 39. Federal trademark law provisions provide remedies for companies whose products are misrepresented in comparative advertising. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Comprehension 40. The foreign/natural test for food items is different from the liability issues under the reasonable expectation test. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Comprehension 41. The implied warranty of merchantability requires proof that the buyer was relying on some language when he or she made the purchase of the good. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Comprehension 42. The implied warranty of fitness for a particular purpose requires reliance by the buyer on the seller's expertise. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Comprehension 43. An internal memo in a company that acknowledges the risk of a product prior to the product's release without any kind of change establishes proof for punitive damages under a negligence theory of product liability. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 44. If there is a breach of the warranty of merchantability, there is no tort liability. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Comprehension 45. A salesperson who recommends a fertilizer to a customer for the customer’s described purposes is not making a warranty. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Application 46. Comparative ads are now illegal. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Comprehension 47. Under the Consumer Product Safety Improvement Act a reseller of goods cannot be liable for selling toys or other products with lead paint because the reseller did not manufacture the goods. a. b. : 1 Easy United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Federal Standards for Product Liability : Bloom's: Knowledge 48. Under the foreign-natural test, restaurants have no liability for injury caused by natural items, such as bones in chicken dishes, and pits in cherry pie dishes. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Application 49. A purchase of a deep fryer at a sale of a bankrupt restaurant’s equipment by the bankruptcy trustee is covered by the warranty of merchantability. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Application 50. The FTC can issue an order to halt a comparative ad if information used in the ad is inaccurate. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Comprehension 51. Proof that a manufacturer was aware of a defect in its product but did not correct it is proof of negligence. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Comprehension 52. Product packaging stating that the line is “ideal for use on boat or dock” is mere puffery and not an express warranty. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Application 53. Passengers injured in a plane crash caused by the plane’s defective design have no rights of recovery against the airplane manufacturer. a. b. : 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Application 54. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Knowledge 55. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Advertising as a Contract Basis for Product Liability : Bloom's: Application 56. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Comprehension 57. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Comprehension 58. "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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Comprehension 59. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Comprehension 60. "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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Application 61. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Synthesis 62. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 63. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Comprehension 64. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Defenses to Product Liability Torts : Bloom's: Comprehension 65. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 66. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Application 67. Section 402A covers: a. manufacturers. b. retailers. c. those who sell products out of their home. d. all of the above : d 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Comprehension 68. "With all faults" serves to disclaim: a. an express warranty. b. liability under 402A. c. liability for negligence. d. none of the above : d 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Application 69. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 70. The opposite of caveat emptor is: a. negligence. b. privity requirements. c. strict tort liability. d. none of the above : c 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Development of Product Liability : Bloom's: Synthesis 71. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Advertising as a Contract Basis for Product Liability : Bloom's: Application 72. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Advertising as a Contract Basis for Product Liability : Bloom's: Application 73. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Contract Product Liability Theories: Implied Warranties : Bloom's: Application 74. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Contract Product Liability Theories: Implied Warranties : Bloom's: Application 75. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Contract Product Liability Theories: Implied Warranties : Bloom's: Application 76. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Contract Product Liability Theories: Implied Warranties : Bloom's: Application 77. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Federal Standards for Product Liability : Bloom's: Knowledge 78. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Contract Product Liability Theories: Implied Warranties : Bloom's: Application 79. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Comprehension 80. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 81. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 82. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 83. 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 1 Easy United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Federal Standards for Product Liability : Bloom's: Knowledge 84. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Comprehension 85. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Comprehension 86. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Comprehension 87. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Comprehension 88. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Federal Standards for Product Liability : Bloom's: Application 89. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Comprehension 90. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Advertising as a Contract Basis for Product Liability : Bloom's: Application 91. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Application 92. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Knowledge 93. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Comprehension 94. 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 ? 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Advertising as a Contract Basis for Product Liability : Bloom's: Application 95. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Advertising as a Contract Basis for Product Liability : Bloom's: Knowledge 96. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Advertising as a Contract Basis for Product Liability : Bloom's: Application 97. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Advertising as a Contract Basis for Product Liability : Bloom's: Application 98. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Advertising as a Contract Basis for Product Liability : Bloom's: Application 99. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Advertising as a Contract Basis for Product Liability : Bloom's: Application 100. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 101. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Defenses to Product Liability Torts : Bloom's: Application 102. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Contract Product Liability Theories: Implied Warranties : Bloom's: Knowledge 103. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 104. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Advertising as a Contract Basis for Product Liability : Bloom's: Application 105. 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 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Defenses to Product Liability Torts : Bloom's: Comprehension Jill DesJardines experiences a broken leg when one of the wheels on her new in-line skates falls off as she is skating. 106. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 107. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 108. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Advertising as a Contract Basis for Product Liability : Bloom's: Application 109. 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 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Advertising as a Contract Basis for Product Liability : Bloom's: Application 110. 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 1 Moderate United States - BUSPROG: Ethics : United States - OH - AICPA: BB-Legal Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Comprehension 111. Mattel, Inc. had to recall 19 million toys because it learned that its manufacturer/supplier in China had used lead-based paint on the toys, a paint that is prohibited in the United States. Mattel: a. is not liable to purchasers of the toys for any injuries resulting from the lead because it did not manufacture the toys or authorize the use of lead paint. b. is not liable to purchasers because there is no privity of contract. c. is liable to purchasers as a manufacturer/seller of toys. d. can escape any liability because it was unaware of the lead paint use. : c 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 112. Tops Meat had to recall all of its frozen hamburger patties because of the presence of E-Coli in the meat. About 20 consumers who ate the Tops patties became ill and two died. The E-Coli was present in the animals Tops purchased for slaughter from various ranchers. a. Tops is not liable to its purchasers because it did not produce a defective product. b. Tops is not liable to its purchasers because it was not aware of the E-Coli when it sold its products. c. Tops is liable to its purchasers for any injuries and damages from the presence of E-Coli. d. both a and b : c 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 113. Glenda purchased new light shades for her chandelier from Shades Plus. The Internet description of the shades she purchased was, “These shades fit almost all fixtures.” When the shades arrived, they could not be placed on the chandelier because they were too narrow. Shades Plus has refused to take the shades back on a return from Glenda. a. Shades need not take back the shades because the shades did not have a quality problem. b. Shades need not take back the shades because it is not responsible for language on its Internet site. c. Shades must take back the shades for breach of an express warranty. d. both a and b : c 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Advertising as a Contract Basis for Product Liability : Bloom's: Application 114. Personal Alarms, Inc. advertises a product for senior citizens who live alone that is a type of warning device when the individual is experiencing health or safety issues. According to Personal Alarm ads, all the user needs to do is press the button on the small Personal Alarm bracelet and through a direct contact, the police are notified immediately and able to detect location of the Personal Alarm user and dispatch assistance. The FTC has learned that the Personal Alarm only alerts a monitoring system that must then call the police. The FTC: a. can issue a cease and desist order for the Personal Alarm ads on direct police contact. b. cannot stop the ads so long as there is some police notification process. c. does not have authority to stop ads because of First Amendment commercial speech protections. d. none of the above : a 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Advertising as a Contract Basis for Product Liability : Bloom's: Application 115. A bike purchaser who alters the frame of a bike after the purchase and who is injured because the frame cracks: a. may not be able to recover from the manufacturer because the product was in a different condition at the time of the accident. b. can still recover from the manufacturer because the manufacturer should know that buyers would alter their bikes. c. can still recover, but not punitive damages. d. both b and c : a 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 116. Koellmer purchased a Chrysler auto. After taking delivery of his new vehicle, he discovered there were warranty disclaimers in his owner's manual. Is Koellmer bound by the warranty disclaimers? : No, no knowledge of them before sale. Post-sale disclaimer of too critical an item. Koellmer v. Chrysler Motors Corp., 276 A.2d 807 (Conn. 1970). 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Contract Product Liability Theories: Implied Warranties : Bloom's: Application 117. Ford manufactured its Pinto auto (a subcompact car) from 1968 to 1980. The gas tank was rigidly mounted and the top of the tank was the floor of the trunk compartment. There was no shield to prevent the spread of fire into the auto. Fox sustained severe burns when his Pinto was hit from behind and exploded into flames. Discuss possible theories of recovery for Fox. : Negligence; strict tort (402A); merchantability. Fox v. Ford Motor Co., 575 F.2d 774 (10th Cir. 1978), Buehler v. Whalen, 374 N.E.2d 460 (Ill. 1978). 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Strict Tort Liability: Product Liability Under Section 402A Contract Product Liability Theories: Implied Warranties : Bloom's: Application 118. Gillham purchased an Admiral TV and shortly thereafter read of the propensity of the TVs to overheat and burst into flames. While watching TV, his set exploded and burned. He experienced rippling burns. Can Gillham recover? Discuss various issues and defenses in the case. : Negligence; strict tort, merchantability. Possible defense that he knew and watched it anyway but courts tend to put responsibility on manufacturer for recall. Gillham v. Admiral Corp., 523 F.2d 102 (6th Cir. 1975). 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Strict Tort Liability: Product Liability Under Section 402A Contract Product Liability Theories: Implied Warranties : Bloom's: Application 119. Chevy (General Motors) manufactured a truck called the LUV. Expert evidence has shown that the absence of a head restraint in the LUV exposes the occupants in a low-speed rear-end collision to cranial impact 16 times that which would result if head restraints were provided. Discuss the risk General Motors runs with the product as it is and possible theories owners injured in such crashes could use for recovery. Must a car be crash-proof? : It is a design defect - either negligence or 402A. Need not be crash-proof but cannot result in more injury. Buccery v. GM, 132 Cal. Rptr. 605 (1976). 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 120. Bucky Warren, Inc. manufactured a hockey helmet. The helmet had gaps in it to give it flex and movement. Everett was injured when a puck struck his head in one of the gaps. Is Bucky Warren liable? : Yes. Product was designed for a sport for safety use and it did not properly provide protection. Everett v. Bucky Warren, Inc., 380 N.E.2d 653 (Mass. 1976). 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 121. James Kaufman purchased 11 heifers from Peter Van Santen. Van Santen provided in their agreement that the cows had "no mastitis." Mastitis is an inflammation of the milk-producing tissue in the udder that can result in infection and reduction of milk production. Shortly after taking delivery, Kaufman discovered mastitis in the cows. One had to be killed and the remainder of Kaufman's herd became infected. He lost $30,000 because of decreased milk production and spent nearly $600 in vet bills. Can Kaufman recover from Van Santen? If so, on what theories? : In Kaufman v. Van Santen, 35 U.C.C. 774 (8th Cir. 1983), the court found that the express warranty of "no mastitis" had been breached and that Kaufman was entitled to $33,000 in damages. 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Advertising as a Contract Basis for Product Liability : Bloom's: Application 122. Many school buildings constructed from 1930 to 1970 had asbestos insulation in them. Presently the schools are undertaking a massive program to replace the insulation and at substantial cost. Could the schools turn to asbestos manufacturers for recovery of the costs? What if students who were exposed to the asbestos during the time they attended the schools develop asbestosis or lung cancer? Where can the students turn? : Presently the liability to schools for the harmful asbestos insulation is being litigated. The students do not have to establish privity under strict tort liability and could turn to the manufacturers. The problem is the financial viability of those companies. At least one court in Illinois has held the manufacturers liable to the schools for the cost of removing the asbestos. The additional costs will be added as claims against the trust fund established with Manville stock and funded by 25 percent of Manville's yearly profits. 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 123. Discuss the ethics of Toyota delaying its recall on vehicles with sudden unintended acceleration problems. : Students may want to discuss the potential increased legal consequences for the delay in the notice, the potential harm caused by the lack of notification, and the ethical obligations owed to Toyota owners, dealers, shareholders, and potential buyers. 1 Challenging United States - BUSPROG: Ethics : United States - OH - AICPA: BB-Critical Thinking Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 124. Discuss why the Consumer Product Safety Improvement Act included rules for resellers of certain types of products. : The CPSIA prohibits the sale of certain types of products, such as lead paint and certain chemicals on products intended for children, by resellers, such as in garage sales. The Consumer Product Safety Commission does not have the resources to police all these kinds of resales so it is trying to educate consumers and sellers about the dangers of these items. 1 Moderate United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Federal Standards for Product Liability : Bloom's: Knowledge 125. A children's Halloween make-up kit states that it is "non-toxic." Several children developed severe rashes and eye infections following use of the product on Halloween. Does the manufacturer have any liability? : The company has made an express warranty that the product is non-toxic. There would be liability. Plus the product is in a defective condition due to its danger to children. 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Advertising as a Contract Basis for Product Liability : Bloom's: Application 126. Cheryl Lileth purchased Big Eyes Mascara, a product described on its label as "Hypoallergenic." Cheryl developed a rash and swelling after one use. Can she recover? What possible theories could she use? : Express warranty; warranty of merchantability; strict tort liability. 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Contract Product Liability Theories: Implied Warranties Strict Tort Liability: Product Liability Under Section 402A Advertising as a Contract Basis for Product Liability : Bloom's: Application 127. Anne Twain purchased two hamsters for her children. She told the salesperson, "I want two hamsters of the same gender, now." The pet store salesperson said, "No problem. These are two males." Six weeks later, Anne's children reported the birth of thirteen tiny hamsters. What rights does Anne have? : Anne would have damages based on the implied warranty of fitness for a particular purpose. 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Contract Product Liability Theories: Implied Warranties : Bloom's: Application 128. Describe three defenses to product liability. : Misuse of the product, unless the misuse is caused by the failure to warn; assumption of risk - product is used in inherently dangerous activities; condition of product has changed from that in which it left the manufacturer. 1 Easy United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Legal Defenses to Product Liability Torts : Bloom's: Knowledge 129. In the Nestle case, what ethical issues existed? : Fairness, disclosure of cost and health issues; taking unfair advantage; giving a impression; disregard for others’ health. 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 130. 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 27 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. Discuss liability and theories of liability. : Students should discuss the alteration of the helicopters as a potential bar to recovery from the manufacturer because the alteration means that the helicopters were not in the same condition when they crashed as when they left the manufacturer. Students should also discuss that neither the passengers nor the pilot were purchasers of the helicopter – product liability 402A is therefore their avenue of recovery and Dam Good might have some liability for negligence for its alteration. The manufacturer could defend on the grounds of alteration. The UCC theories might be used between Dam Good and the helicopter manufacturers, but really could not be used by the passengers and pilot – they are not purchasers or even using the product as a member of a household. The pilot might have a better chance of recovery despite no privity if he/she is an employee of Dam Good. 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 131. Campbell’s Soup created a low sodium line of soups that had the label on the can that read “25% less sodium than regular soup.” Tests revealed that the low-sodium soups had the same amount of sodium as regular soups. Which of the following statements is ? a. Campbell’s made an express warranty that it breached. b. There is no warranty claim that can be based on a product label. c. There can be recovery for the claim only if a purchaser is harmed by the claim. d. The FTC has no jurisdiction over claims made on product labels. : a 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Advertising as a Contract Basis for Product Liability : Bloom's: Application 132. Coca-Cola found a fungicide in its Simply Orange and Minute Maid orange juices. The fungicide was the result of a spray used by Brazilian orange growers who then sold their oranges to Coca-Cola. Which best describes Coca-Cola’s liability to customers who purchase the juice? a. Coca-Cola is not liable because it did not know about the fungicide. b. The Brazilian growers are not liable because there is no privity with the juice purchasers. c. Coca-Cola is liable for a defect in its products. d. Coca-Cola is liable under tort theory but not contract. : c 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 133. Brianne Kriefall died after ingesting e-coli bacteria by eating at a Sizzler Restaurant. Sizzler’s meat supplier discovered that several of its shipments of meat to Sizzler and other restaurants contained the e-coli bacteria. Which of the following is correct? a. Brianne’s estate and family can recover for wrongful death under a breach of the implied warranty of merchantability. b. Brianne’s estate and family can recover for wrongful death under a strict tort liability theory. c. Brianne’s estate and family can recover for wrongful death from both Sizzler and its supplier. d. All of the above are correct. : d 1 Challenging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Contract Product Liability Theories: Implied Warranties Strict Tort Liability: Product Liability Under Section 402A : Bloom's: Application 134. Stanislaus County, California awarded a contract for the construction of a water treatment plant to Black & Veatch. Black & Veatch purchased pipe for installation to and from the plant from a supplier who worked with representatives from Black & Veatch to determine a pipe that would work for the soil and weather conditions near the plant. Black & Veatch followed the suppliers recommendations. After the plant opened, there were significant problems with the pipes’ failure rates. Which of the following statements is correct? a. The supplier has no liability to the county because it did not have a contract with the city. b. The supplier has liability for breach of implied warranty of fitness for a particular purpose. c. There is no warranty liability when there is no privity. d. Black & Veatch has no liability for the problems with the pipes. : b 1 Challeging United States - BUSPROG: Analytic : United States - OH - AICPA: BB-Critical Thinking Contract Product Liability Theories: Implied Warranties : Bloom's: Application

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