Kubasek LEB7e tif 12 - Test bank PDF

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The Legal Environment of Business, 8e (Kubasek) Chapter 12 Product and Service Liability Law 1) Plaintiffs in product liability cases have traditionally used ________. A) theories of warranty B) theories of negligence C) the strict product liability theory D) the market share theory Answer: B LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking 2) Which of the following is not an essential element in a product liability case based on negligence? A) The defendant manufacturer owed a duty of care to the plaintiff. B) The defendant breached the duty of care. C) The plaintiff suffered actual, compensable injury. D) The defendant intended to cause the plaintiff harm. Answer: D LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking 3) In early product liability cases, the privity limitation meant that the plaintiff was required to demonstrate that ________. A) he or she purchased the defective product directly from the manufacturer B) the seller owed a duty of care to the consumer C) the manufacturer breached a duty of care D) the damages are actual as opposed to punitive Answer: A LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking

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4) Which of the following statements is true of the privity limitation? 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. Answer: D LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking 5) Elimination of the privity requirement led to ________. 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 Answer: A LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking 6) Elimination of the privity requirement reflected a shift in ________. 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 Answer: B LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking

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7) Which of the following is not a common negligent action leading to product liability case? A) negligent failure to warn B) negligent intent to harm C) negligent provision of an inadequate warning D) negligent design Answer: B LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking 8) Which of the following is not a common negligent action leading to product liability case? A) negligent manufacture B) negligent testing or failure to test C) negligent advertising D) negligent infliction of emotional distress Answer: D LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking 9) In bringing an action for negligence in design, a plaintiff may prove all but which of the following? A) The product design is inherently dangerous. B) The product design contains insufficient safety designs. C) The product design does not contain the most recent consumer preferences. D) The product design consists of materials that do not satisfy standards acceptable in the trade. Answer: C LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking 10) Which of the following statements is true of negligent failure to warn? A) The manufacturers must provide warnings about obvious dangers. B) The manufacturers have to include warnings only for the original purchaser of the product, but not the user. C) The manufacturers need not include warnings about dangers from unforeseeable misuses of the product. D) The manufacturers of prescription drugs need not provide warnings to physicians of any chance of serious adverse reactions. Answer: C LO: 12.1: Theories of Recovery in Product Liability Cases 3 Copyright © 2015 Pearson Education, Inc.

Diff: Moderate Class: Concept AACSB: Analytical thinking 11) Which of the following is an effect of the growing acceptance of strict liability? 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. Answer: A LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking 12) Which of the following doctrines helps a plaintiff to recover damages when a manufacturer fails to meet the standards imposed by a statute? A) res ipsa loquitur B) breach-of-warranty doctrine C) disclaimer doctrine D) negligence per se Answer: D LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking 13) Which of the following describes the condition in which courts impose liability based on negligent design? A) when the materials used by the manufacturer satisfy most of the standards acceptable in the trade B) when the risk of harm outweighs the utility of the product C) when the manufacturer fails to include a warning about obvious dangers D) when the manufacturer warns only the original purchaser and not the user Answer: B LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking

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14) Which of the following refers to a scenario in which courts will impose liability due to negligent design? A) A reasonable person concluding that the warning labels were simply inadequate. B) A reasonable person concluding that despite any warnings given with the product, the risk of harm outweighed the utility of the product as designed. C) A reasonable person concluding that the utility of the product as designed outweighed the risk of harm. D) A reasonable person concluding that the product's design violated statutory duties. Answer: B LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking 15) A statute of ________ bars actions arising more than a specified number of years after the cause of action arises, while a statute of ________ bars actions arising more than a specified number of years after the product was purchased. A) repose; limitations B) limitations; repose C) frauds; repose D) frauds; limitations Answer: B LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking 16) In most states, the statute of limitations for tort actions is ________. A) 30 days from the date of injury B) 45 days to 11 months from the date of injury C) 2 to 4 years from the date of injury D) 4 to 7 years from the date of injury Answer: C LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Easy Class: Concept AACSB: Analytical thinking

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17) Which of the following statements is true of defenses to a negligence-based product liability action? A) For misuse of a product to constitute a valid defense, the misuse must be unreasonable or unforeseeable. B) An employee using an unsafe machine at work is presumed to have assumed the risk. C) If contributory negligence is proved, the plaintiff can recover for only that portion of the harm attributable to the defendant's negligence. D) If pure comparative negligence is proved, the plaintiff is barred from recovery. Answer: A LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking 18) 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? 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. Answer: B LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Application AACSB: Application of knowledge 19) Which of the following statements is true of the statute of limitations? 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. Answer: A LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking

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20) Which of the following best describes a statute of repose? A) It is a statute that bars actions arising more than a specified number of years after the cause of the action arises. B) It is a statute that limits recoverable damages based on the percentage of harm caused by the defendant. C) It is a statute that limits recoverable damages to less than $1,000,000. D) It is a statute that bars actions arising more than a specified number of years after the product was purchased. Answer: D LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking 21) 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? 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. Answer: D LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking 22) Which of the following refers to a scenario in which the plaintiff is said to have assumed the risk? A) when the plaintiff voluntarily and unreasonably encounters a known danger B) when the plaintiff encounters an unknown danger C) when the plaintiff does not consider the dangers of a product D) when the plaintiff does not read all of the provided warnings and instructions to prevent danger Answer: A LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking

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23) A defendant raising the ________ defense is claiming that the harm was not caused by the defendant's negligence. A) res ipsa loquitur B) contributory negligence C) product misuse D) comparative negligence Answer: C LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Easy Class: Concept AACSB: Analytical thinking 24) Which of the following refers to the state-of-the-art defense? A) The defendant proves that a warning on the product would not have helped. B) The defendant proves that there was insufficient scientific knowledge to make a safer product at the time it was manufactured. C) The defendant proves that the plaintiff had insufficient knowledge to purchase the product. D) The defendant proves that the warning could have been understood by any reasonable person. Answer: B LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking 25) Which of the following statements is true of the state-of-the-art defense? A) It is a product liability defense based on adherence to existing economically feasible methods when the product was manufactured. B) If proven, the defendant cannot be held liable for the defective product. C) It bars actions arising more than a specified number of years after the product was purchased. D) It is a valid defense in a negligence case because the focus is on the reasonableness of the defendant's conduct. Answer: D LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking 26) A(n) ________ warranty is one clearly stated by the seller or manufacturer. A) express B) implied C) liquidated D) impact Answer: A LO: 12.1: Theories of Recovery in Product Liability Cases 8 Copyright © 2015 Pearson Education, Inc.

Diff: Easy Class: Concept AACSB: Analytical thinking 27) A(n) ________ warranty is one that automatically arises out of a transaction. A) express B) implied C) limited D) impact Answer: B LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Easy Class: Concept AACSB: Analytical thinking 28) Which of the following statements is true of implied warranty of merchantability? 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. Answer: B LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking 29) Which of the following statements is true about disclaimers used to limit consequential damages for injury caused by consumer goods? 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. Answer: A LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking

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30) Which of the following refers to unconscionability under the Uniform Commercial Code? A) The seller was not aware of the defect at the time of purchase. B) The plaintiff is a minor. C) The contract clause is grossly unfair. D) The lawsuit was brought after the expiration date of the statute of repose. Answer: C LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking 31) The implied warranty of fitness for a particular purpose refers to ________. A) a warranty that allows the purchaser to recover the full purchase price if there is any dissatisfaction with the product B) a warranty that is clearly stated by the seller or manufacturer C) a warranty that arises when the seller tells the consumer that a product is fit for a specific use D) a warranty that a product is reasonably fit for ordinary use Answer: C LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Easy Class: Concept AACSB: Analytical thinking 32) Tom purchases a new set of tires for his vehicle. He informs Richard, the vendor who specializes in such goods, that he intends to use it in snowy conditions. The tires do not provide sufficient grip in snow, and his vehicle meets with an accident. Which of the following statements is true of this scenario? A) Richard cannot be held liable as Tom voluntarily assumed the risk of driving in snowy conditions. B) Richard cannot be held liable if an express warranty was not issued with the product. C) Richard is liable on the basis of negligent design. D) Richard is liable as he breached an implied warranty of fitness for a particular purpose. Answer: D LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Application AACSB: Application of knowledge

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33) Which of the following statements is true of breach of warranty actions? 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. Answer: A LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking 34) 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. A) disclaimer B) express warranty C) implied warranty of fitness D) tort Answer: A LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Easy Class: Concept AACSB: Analytical thinking 35) Which of the following statements is true about strict liability in tort? 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. Answer: C LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking

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36) Which of the following statements describes a circumstance in which the manufacturer or distributor is liable for selling a defective product according to strict liability in tort? A) The seller is not engaged in the business of selling the type of product that was found to be defective. B) The product developed by the manufacturer is expected to reach the consumer or user after undergoing substantial change. C) The product develops a defect four years after it was purchased by the consumer. D) The user or consumer has not bought the defective product from or entered into any contractual relation with the seller. Answer: D LO: 12.1: Theories of Recovery in Product Liability Cases Diff: Moderate Class: Concept AACSB: Analytical thinking 37) 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? A) Simon is not liable as he has not entered into any contractu...