BLAW 3310 Ch. 7 Questions And Answers With Verified Solutions Graded A+

3 types of liablility - 1. Design defect 2. Manufacturing defect 3. Inadequate warnings Business Torts - Wrongful interference with another's business rights and relationships. Design defect - when there is a flaw in the design. The product passes inspection and seems good. Ex; painting bassinets with toxic paint. Elements of fraud - 1) There was a misstatement of an important or material fact; that is, false information was presented as fact. 2) There must be Scienter or intent to defraud; that is, the party wanted to mislead the other party and intentionally deceive him. 3) The seller must know, or have reason to know, that the statement she is making is false. 4) The recipient of the false information must justifiably rely on that information in making the decision to go ahead with the deal. Ex. If a seller tells you false information intending to deceive you, but you are not fooled and go ahead with deal anyway, there is no fraud. 5) There must be privity between the parties. (Relationship between parties; a third party cannot sue.) 6) There must be causation: a logical link existed between reliance on the misstatement and the looses that were then suffered by the plaintiff. 7) There must be damages that were caused by the fraud. Elements of Strict Liability - 1. The product was defective 2. The defect caused an unreasonable dangerous product. 3. The defect was the proximate cause of or a substantial factor in bringing about the injury. 4. The injury caused damages. Fraud - an intentional misrepresentation of a material fact designed to induce the person receiving the miscommunication to rely upon it to her detriment, so that a loss is suffered.Interference with contractual relations - Another party wrongfully interfered with the injured business's contractual relations. Interference with prospective advantage - A business attempts to improve its place in the market by interfering with another's attempt to gain new business by use of improper acts. (Nike sending someone to promote Nike in front of the Adidas store.) Manufacturing defect - Ex; wheels falling off bassinets. Negligence as recovery in product liablility - in 1916, In the case "MacPherson V. Buick" the highest court eliminated the privity requirement and held a manufacturer liable in tort for negligence for a product related injury to a consumer despite the lack of privity. Privity of contract (eliminated at McPherson case) - The relationship that exists between contracting parties. It is essential to a contract that privity, a legal relationship, exists between the parties. (In the past) Product Liablity - A general category of cases in which the producer or seller of products may be held responsible to buyers, users, or innocent third parties, who suffer injuries due to defects in the goods. Scienter - A legal term that refers to intent or knowledge of the wrongdoing. Section 402A pg. 178 - Read it. Strict Liability - Holds manufacturers liable to consumers injured by defective products regardless of whether the manufacturer had been negligent. Injured party should only focus in product problems. Unknown hazards or latent defect - Dangers that were not known or not fully appreciated at the time of the product was manufactured. The largest dollar volume and greatest number of product liability cases are based on unknown hazards.