Question 1

Which of the following statements is true of accountants' liability?

Accepted Answer

A) The plaintiff only has to prove breach of duty in malpractice actions against accountants that are based on negligence. 
B) All states follow the same guidelines to determine to whom an accountant can be held liable. 
C) The Ultramares Doctrine allows third parties to sue accountants. 
D) The smallest minority of states holds the accountant liable to any reasonably foreseeable user of the statement the accountant prepares. 
A) The plaintiff only has to prove breach of duty in malpractice actions against accountants that are based on negligence. 
B) All states follow the same guidelines to determine to whom an accountant can be held liable. 
C) The Ultramares Doctrine allows third parties to sue accountants. 
D) The smallest minority of states holds the accountant liable to any reasonably foreseeable user of the statement the accountant prepares.

Question 2

Which of the following is true about the standard adopted by the Restatement (Third) of Torts for design defects?

Accepted Answer

A) It is based on strict liability. 
B) It is based on reasonableness. 
C) It is a negligence-based test on the duty to warn. 
D) It is based on the defendant's intent. 
A) It is based on strict liability. 
B) It is based on reasonableness. 
C) It is a negligence-based test on the duty to warn. 
D) It is based on the defendant's intent.

Question 3

The risk-utility test is used to determine whether a product has met the standards that would be expected by a reasonable consumer.

Accepted Answer

A) True 
 B)False

Question 4

Most courts recognize that the concept of voluntariness is an illusion in the workplace.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements is true of implied warranty of merchantability?

Accepted Answer

A) It states that the product being sold is the safest one that can be produced with the scientific knowledge available. 
B) To meet the standard of merchantability, the product must be adequately contained, packaged, and labeled as the agreement may require. 
C) This warranty is made even if the seller does not regularly sell that type of good. 
D) The Uniform Commercial Code considers contracts related to consumer goods that limit damages for injuries to a person as valid. 
A) It states that the product being sold is the safest one that can be produced with the scientific knowledge available. 
B) To meet the standard of merchantability, the product must be adequately contained, packaged, and labeled as the agreement may require. 
C) This warranty is made even if the seller does not regularly sell that type of good. 
D) The Uniform Commercial Code considers contracts related to consumer goods that limit damages for injuries to a person as valid.

Question 6

Which of the following statements is true about disclaimers used to limit consequential damages for injury caused by consumer goods?

Accepted Answer

A) These disclaimers are considered unconscionable under the Uniform Commercial Code, and will not be enforced. 
B) These disclaimers are enforceable only if the contract is in writing. 
C) These disclaimers are enforceable whether or not the contract is in writing. 
D) These disclaimers are not considered unconscionable, and are, therefore, not enforced. 
A) These disclaimers are considered unconscionable under the Uniform Commercial Code, and will not be enforced. 
B) These disclaimers are enforceable only if the contract is in writing. 
C) These disclaimers are enforceable whether or not the contract is in writing. 
D) These disclaimers are not considered unconscionable, and are, therefore, not enforced.

Question 7

Which of the following statements is true of the statute of limitations?

Accepted Answer

A) It limits the time within which all types of civil actions may be brought. 
B) It limits the types of civil actions that may be brought to court. 
C) In most states, it permits lawsuits only when intentional torts have been committed. 
D) If the injured party is a minor, it permits the parent or guardian to bring a civil action suit. 
A) It limits the time within which all types of civil actions may be brought. 
B) It limits the types of civil actions that may be brought to court. 
C) In most states, it permits lawsuits only when intentional torts have been committed. 
D) If the injured party is a minor, it permits the parent or guardian to bring a civil action suit.

Question 8

Eradication of the privity requirement led to ________.

Accepted Answer

A) an increase in the liability of producers 
B) an increase in the liability of consumers 
C) a decrease in the liability of manufacturers 
D) a decrease in the liability of sellers 
A) an increase in the liability of producers 
B) an increase in the liability of consumers 
C) a decrease in the liability of manufacturers 
D) a decrease in the liability of sellers

Question 9

A plaintiff often sues only ________ when the manufacturer is located in a foreign country.

Accepted Answer

A) the retailer and the wholesaler 
B) the manufacturer in a foreign country 
C) the retailer in a foreign country 
D) the manufacturer's legal representative 
A) the retailer and the wholesaler 
B) the manufacturer in a foreign country 
C) the retailer in a foreign country 
D) the manufacturer's legal representative

Question 10

The feasible alternatives test, set out in the Restatement (Second) of Torts, is the consumer-expectations test.

Accepted Answer

A) True 
 B)False

Question 11

________ is a warranty that is clearly stated by the seller or manufacturer.

Accepted Answer

A) Express warranty 
B) Implied warranty 
C) Limited warranty 
D) Impact warranty 
A) Express warranty 
B) Implied warranty 
C) Limited warranty 
D) Impact warranty

Question 12

In a state that follows modified contributory negligence, in which of the following scenarios could the plaintiff recover the percentage of harm caused by the defendant?

Accepted Answer

A) The jury finds that the plaintiff's negligence was responsible for 55 percent of the harm. 
B) The jury finds that the plaintiff's negligence was responsible for 75 percent of the harm. 
C) The jury finds that the plaintiff's negligence was responsible for 65 percent of the harm. 
D) The jury finds that the plaintiff's negligence was responsible for 45 percent of the harm. 
A) The jury finds that the plaintiff's negligence was responsible for 55 percent of the harm. 
B) The jury finds that the plaintiff's negligence was responsible for 75 percent of the harm. 
C) The jury finds that the plaintiff's negligence was responsible for 65 percent of the harm. 
D) The jury finds that the plaintiff's negligence was responsible for 45 percent of the harm.

Question 13

The ________ is a rule making accountants liable only to those in a privity-of-contract relationship with the accountant.

Accepted Answer

A) Doctrine of nondelegation 
B) Ultramares Doctrine 
C) Res ipsa loquitur Doctrine 
D) Erie Doctrine 
A) Doctrine of nondelegation 
B) Ultramares Doctrine 
C) Res ipsa loquitur Doctrine 
D) Erie Doctrine

Question 14

If a product is to be used by someone other than the original purchaser, the manufacturer is generally required to put some sort of warning on the product itself.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements is true about strict liability in tort?

Accepted Answer

A) Product liability actions based on strict liability in tort focus on the producer or manufacturer. 
B) To succeed in a strict liability action, the plaintiff must prove that the defendant did not exercise the degree of care that is reasonably expected under those circumstances. 
C) A failure by the manufacturer or seller to adequately warn of a risk or hazard associated with the product can be used by the plaintiff to establish that the product is defective. 
D) To be successful in a strict liability action, the plaintiff must prove that the product developed a defect before it was sold. 
A) Product liability actions based on strict liability in tort focus on the producer or manufacturer. 
B) To succeed in a strict liability action, the plaintiff must prove that the defendant did not exercise the degree of care that is reasonably expected under those circumstances. 
C) A failure by the manufacturer or seller to adequately warn of a risk or hazard associated with the product can be used by the plaintiff to establish that the product is defective. 
D) To be successful in a strict liability action, the plaintiff must prove that the product developed a defect before it was sold.

Question 16

The long-arm statute must be satisfied for a U.S. court to have jurisdiction over a foreign manufacturer.

Accepted Answer

A) True 
 B)False

Question 17

George met with an accident while skiing. He brings a negligence suit against Joe, who rented the skis to George. Which of the following statements is true of this scenario?

Accepted Answer

A) If Joe is 40 percent responsible, George would be able to recover 40 percent of the damages in a state that has adopted modified comparative negligence. 
B) If Joe is 40 percent responsible, George would be able to recover 40 percent of the damages in a state that has adopted pure comparative negligence. 
C) George can recover damages even if Joe proves contributory negligence. 
D) George can recover damages if misuse of the product is proved. 
A) If Joe is 40 percent responsible, George would be able to recover 40 percent of the damages in a state that has adopted modified comparative negligence. 
B) If Joe is 40 percent responsible, George would be able to recover 40 percent of the damages in a state that has adopted pure comparative negligence. 
C) George can recover damages even if Joe proves contributory negligence. 
D) George can recover damages if misuse of the product is proved.

Question 18

The seller's liability is strict if the warning provided with the product is defective.

Accepted Answer

A) True 
 B)False

Question 19

What are the three rules used to determine the accountant's liability to third parties?

Accepted Answer

The first, and oldest, rule is often ref

Question 20

Product liability and tort law are unrelated.

Accepted Answer

A) True 
 B)False

Exam 12: Product and Service Liability Law

Which of the following statements is true of accountants' liability?

Which of the following is true about the standard adopted by the Restatement (Third) of Torts for design defects?

The risk-utility test is used to determine whether a product has met the standards that would be expected by a reasonable consumer.

Most courts recognize that the concept of voluntariness is an illusion in the workplace.

Which of the following statements is true of implied warranty of merchantability?

Which of the following statements is true about disclaimers used to limit consequential damages for injury caused by consumer goods?

Which of the following statements is true of the statute of limitations?

Eradication of the privity requirement led to ________.

A plaintiff often sues only ________ when the manufacturer is located in a foreign country.

The feasible alternatives test, set out in the Restatement (Second) of Torts, is the consumer-expectations test.

________ is a warranty that is clearly stated by the seller or manufacturer.

In a state that follows modified contributory negligence, in which of the following scenarios could the plaintiff recover the percentage of harm caused by the defendant?

The ________ is a rule making accountants liable only to those in a privity-of-contract relationship with the accountant.

If a product is to be used by someone other than the original purchaser, the manufacturer is generally required to put some sort of warning on the product itself.

Which of the following statements is true about strict liability in tort?

The long-arm statute must be satisfied for a U.S. court to have jurisdiction over a foreign manufacturer.

George met with an accident while skiing. He brings a negligence suit against Joe, who rented the skis to George. Which of the following statements is true of this scenario?

The seller's liability is strict if the warning provided with the product is defective.

What are the three rules used to determine the accountant's liability to third parties?

Product liability and tort law are unrelated.

Critical Thinking and Legal Reasoning

Introduction to Law and the Legal Environment of Business

The American Legal System

Alternative Tools of Dispute Resolution

Constitutional Principles

White-Collar Crime and the Business Community

Ethics, Social Responsibility, and the Business Manager

The International Legal Environment of Business

The Law of Contracts and Sales—I

The Law of Contracts and Sales—II

The Law of Torts

Law of Property: Real and Personal

Intellectual Property

Agency Law

Law and Business Associations

Law and Business Associations

The Law of Administrative Agencies

The Employment Relationship

Laws Governing Labor-Management Relations

Employment Discrimination

Environmental Law

Rules Governing the Issuance and Trading of Securities

Antitrust Laws

Laws of Debtor Creditor Relations and Consumer Protection

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