Question 1

Which of the following statements is true of the privity limitation?

Accepted Answer

A) The privity limitation allowed negligence suits against the manufacturer only if the owner of the product was using it when it failed. 
B) The court indicated that it is unfair to impose liability on the manufacturer and seller even if they earn profits from a defectively made product. 
C) Eradication of the privity requirement led to a shift in social policy toward placing responsibility for injuries on the victims. 
D) It did not allow the plaintiff to recover damages unless the plaintiff purchased the defective goods directly from the manufacturer. 
A) The privity limitation allowed negligence suits against the manufacturer only if the owner of the product was using it when it failed. 
B) The court indicated that it is unfair to impose liability on the manufacturer and seller even if they earn profits from a defectively made product. 
C) Eradication of the privity requirement led to a shift in social policy toward placing responsibility for injuries on the victims. 
D) It did not allow the plaintiff to recover damages unless the plaintiff purchased the defective goods directly from the manufacturer.

Question 2

Jim, an accountant, is asked to prepare a statement by Clark. This statement provides details about property owned by Clark. Jim is aware that Clark intends to use this statement to obtain a loan from a bank. Which of the following statements is true of this scenario?

Accepted Answer

A) In the states that follow the Ultramares Doctrine, the bank cannot sue Jim for malpractice. 
B) The bank can sue Jim for malpractice in all the states in the U.S. 
C) The Ultramares Doctrine allows the bank to sue Jim for malpractice. 
D) The bank cannot sue Clark because a contractual relationship exists between Jim and the bank. 
A) In the states that follow the Ultramares Doctrine, the bank cannot sue Jim for malpractice. 
B) The bank can sue Jim for malpractice in all the states in the U.S. 
C) The Ultramares Doctrine allows the bank to sue Jim for malpractice. 
D) The bank cannot sue Clark because a contractual relationship exists between Jim and the bank.

Question 3

Which of the following statements is true about malpractice actions?

Accepted Answer

A) They are no longer permitted under the Restatement (Third)of Torts. 
B) They generally apply the strict liability standard. 
C) The number of malpractice actions against professionals is rising at a rapid rate. 
D) The number of malpractice actions against manufacturers is rising at a rapid rate. 
A) They are no longer permitted under the Restatement (Third)of Torts. 
B) They generally apply the strict liability standard. 
C) The number of malpractice actions against professionals is rising at a rapid rate. 
D) The number of malpractice actions against manufacturers is rising at a rapid rate.

Question 4

Which of the following is true of adopting the Restatement (Third) of Torts: Product Liability?

Accepted Answer

A) The seller's liability differed depending on whether the defect was a manufacturing defect, a design defect, or a defective warning. 
B) The seller's liability differed depending on whether the plaintiff was a merchant, a consumer, or a minor. 
C) The privity limitation was reinstated as a defense to product liability lawsuits. 
D) The state-of-the-art defense is permitted by courts in most strict liability cases. 
A) The seller's liability differed depending on whether the defect was a manufacturing defect, a design defect, or a defective warning. 
B) The seller's liability differed depending on whether the plaintiff was a merchant, a consumer, or a minor. 
C) The privity limitation was reinstated as a defense to product liability lawsuits. 
D) The state-of-the-art defense is permitted by courts in most strict liability cases.

Question 5

A(n) ________ is a disavowal of liability for breach of warranty by the manufacturer or seller of a good in advance of the sale of the good.

Accepted Answer

A) disclaimer 
B) express warranty 
C) implied warranty of fitness 
D) tort 
A) disclaimer 
B) express warranty 
C) implied warranty of fitness 
D) tort

Question 6

Printing claims about products on their packaging creates an implied warranty of fitness for a particular purpose.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following doctrines helps a plaintiff to recover damages when a manufacturer fails to meet the standards imposed by a statute?

Accepted Answer

A) res ipsa loquitur 
B) breach-of-warranty doctrine 
C) disclaimer doctrine 
D) negligence per se 
A) res ipsa loquitur 
B) breach-of-warranty doctrine 
C) disclaimer doctrine 
D) negligence per se

Question 8

A strict liability standard is applied when there is a ________.

Accepted Answer

A) design defect 
B) defective warning 
C) manufacturing defect 
D) defect in marketing 
A) design defect 
B) defective warning 
C) manufacturing defect 
D) defect in marketing

Question 9

Which of the following is an effect of the growing acceptance of strict liability?

Accepted Answer

A) Negligence has become less important as a theory of liability. 
B) Negligence has become more important as a theory of liability. 
C) The doctrine of negligence per se is used more frequently. 
D) The doctrine of res ipsa loquitur is used more frequently. 
A) Negligence has become less important as a theory of liability. 
B) Negligence has become more important as a theory of liability. 
C) The doctrine of negligence per se is used more frequently. 
D) The doctrine of res ipsa loquitur is used more frequently.

Question 10

Abolition of the privity limitation opened the door for negligence as a theory of liability when people were injured because of a product manufacturer's or seller's lack of care.

Accepted Answer

A) True 
 B)False

Question 11

Katherine purchased a pair of earphones from Simon. She realizes that they are defective and brings a strict liability action against Simon. Which of the following statements is true of this scenario?

Accepted Answer

A) Simon is not liable as he has not entered into any contractual relation with Katherine. 
B) If Simon has exercised all possible care in sale of the product, he is not liable. 
C) If Simon is not engaged in the business of selling electronic goods, he is not liable. 
D) Simon is not liable as he is not the manufacturer of the product. 
A) Simon is not liable as he has not entered into any contractual relation with Katherine. 
B) If Simon has exercised all possible care in sale of the product, he is not liable. 
C) If Simon is not engaged in the business of selling electronic goods, he is not liable. 
D) Simon is not liable as he is not the manufacturer of the product.

Question 12

Which of the following statements is true of breach-of-warranty actions?

Accepted Answer

A) Most courts do not require that the purchaser provide the manufacturer a notice within a reasonable time of becoming aware of the breach of warranty if the two parties have not dealt with each other. 
B) According to the Uniform Commercial Code, the cause of action arises the day the product malfunctions. 
C) Most courts allow a manufacturer to relieve itself of liability for breach of warranty by using disclaimers even if the disclaimers are not stated on an integral part of the product or package. 
D) The Uniform Commercial Code contains a provision stating that disclaimers on products cannot be considered as unconscionable. 
A) Most courts do not require that the purchaser provide the manufacturer a notice within a reasonable time of becoming aware of the breach of warranty if the two parties have not dealt with each other. 
B) According to the Uniform Commercial Code, the cause of action arises the day the product malfunctions. 
C) Most courts allow a manufacturer to relieve itself of liability for breach of warranty by using disclaimers even if the disclaimers are not stated on an integral part of the product or package. 
D) The Uniform Commercial Code contains a provision stating that disclaimers on products cannot be considered as unconscionable.

Question 13

Section 552 of the Restatement (Second) of Torts holds accountants liable ________.

Accepted Answer

A) only to those in a privity-of-contract relationship with the accountant 
B) to any reasonably foreseeable user of the statement the accountant prepares 
C) to a limited class of intended users of the information 
D) only to the accountant's clients 
A) only to those in a privity-of-contract relationship with the accountant 
B) to any reasonably foreseeable user of the statement the accountant prepares 
C) to a limited class of intended users of the information 
D) only to the accountant's clients

Question 14

Section 402A of the Restatement (Second) of Torts is generally considered to be the foundation of modern product liability law.

Accepted Answer

A) True 
 B)False

Question 15

Producers are generally required to warn customers of obvious dangers associated with a product.

Accepted Answer

A) True 
 B)False

Question 16

Eradication of the privity requirement reflected a shift in ________.

Accepted Answer

A) purchases toward only those products that were produced with proper care in design, manufacture, and labeling 
B) social policy toward placing responsibility for injuries on those who market a product that could foreseeably cause harm if proper care were not taken in the manufacturing process 
C) social policy toward placing responsibility for injuries on those who purchase a product that has a foreseeable risk 
D) packaging strategies employed by manufacturers to begin including warnings about the potential danger of the product 
A) purchases toward only those products that were produced with proper care in design, manufacture, and labeling 
B) social policy toward placing responsibility for injuries on those who market a product that could foreseeably cause harm if proper care were not taken in the manufacturing process 
C) social policy toward placing responsibility for injuries on those who purchase a product that has a foreseeable risk 
D) packaging strategies employed by manufacturers to begin including warnings about the potential danger of the product

Question 17

Discuss the consequences of eliminating the privity requirement.

Accepted Answer

Eradication of the privity requirement a

Exam 12: Product and Service Liability Law

Which of the following statements is true of the privity limitation?

Jim, an accountant, is asked to prepare a statement by Clark. This statement provides details about property owned by Clark. Jim is aware that Clark intends to use this statement to obtain a loan from a bank. Which of the following statements is true of this scenario?

Which of the following statements is true about malpractice actions?

Which of the following is true of adopting the Restatement (Third) of Torts: Product Liability?

A(n) ________ is a disavowal of liability for breach of warranty by the manufacturer or seller of a good in advance of the sale of the good.

Printing claims about products on their packaging creates an implied warranty of fitness for a particular purpose.

Which of the following doctrines helps a plaintiff to recover damages when a manufacturer fails to meet the standards imposed by a statute?

A strict liability standard is applied when there is a ________.

Which of the following is an effect of the growing acceptance of strict liability?

Abolition of the privity limitation opened the door for negligence as a theory of liability when people were injured because of a product manufacturer's or seller's lack of care.

Katherine purchased a pair of earphones from Simon. She realizes that they are defective and brings a strict liability action against Simon. Which of the following statements is true of this scenario?

Which of the following statements is true of breach-of-warranty actions?

Section 552 of the Restatement (Second) of Torts holds accountants liable ________.

Section 402A of the Restatement (Second) of Torts is generally considered to be the foundation of modern product liability law.

Producers are generally required to warn customers of obvious dangers associated with a product.

Eradication of the privity requirement reflected a shift in ________.

Discuss the consequences of eliminating the privity requirement.

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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