Business Law, 8e (Cheeseman)
Chapter 6 Product and Strict Liability
1) The liability of manufacturers, sellers, lessors, and others for injuries caused by defective
products is commonly referred to as product liability.
2) Under the doctrine of strict liability, a plaintiff cannot recover punitive damages for reckless
conduct of the defendant.
3) Negligence requires the defendant to be at fault for causing the plaintiff’s injuries.
4) In a negligence lawsuit, parties who were not actually negligent are also liable to the plaintiff.
5) An injured party may bring a negligence lawsuit against the distributors and retailers of the
defective product.
6) Intentional misrepresentation occurs when a seller or lessor conceals a defect in a product.
7) Strict liability applies to services, but not products.
8) Under the doctrine of strict liability, bystanders who are injured by a defective product are
entitled to the same protection as the consumers or users.
9) The doctrine of strict liability holds the manufacturers of a defective product solely liable for
injuries caused by that product.
10) A defendant who has not been negligent but who is made to pay a strict liability judgment
can bring a separate action against the negligent party in the chain of distribution to recover its
losses.
11) Privity of contract between the plaintiff and the defendant is not required in a strict liability
suit.
12) A seller of a defective product cannot be held strictly liable if it can be proved that he or she
took all possible care in the preparation and sale of the product.
13) Casual sales and transactions are not covered under the strict liability doctrine.
14) In hybrid transactions that involve both services and products, the dominant element of the
transaction dictates whether strict liability applies.
15) The doctrine of strict liability applies to sellers and lessors of products who are engaged in
the business of selling and leasing products.
16) To recover for strict liability, the injured party need not show that a product was defective.
17) Plaintiffs can allege multiple product defects in one lawsuit.
18) Failure to properly assemble a product constitutes a defect in design by the manufacturer.
19) A toy manufacturer sells G.I. Joe figurines containing miniature limbs and weapons that
could be swallowed by small children. It can be subject to a strict liability action owing to a
defect in design.
20) A risk utility analysis requires showing that a product is more dangerous than the ordinary
consumer would expect.
21) Courts can apply a consumer expectation test to evaluate the adequacy of a product’s design.
22) A defect in manufacture occurs when the manufacturer fails to warn customers about the
dangerous propensities of its products.
23) A tamperproof seal on a product is considered as a defect in packaging.
24) When a drug manufacturer places prescription drugs in containers that can be easily opened
by children, it subjects them to strict liability action due to defect in packaging.
25) Manufacturers and others in the chain of distribution are not strictly liable for failure to
provide adequate instructions on assembly and use of a product.
26) Inadequate testing of a product can support a product liability lawsuit based on strict liability.
27) Manufacturers and sellers are strictly liable for failing to warn customers of the generally
known dangers of a product.
28) The statute of limitations begins to run when a product is first sold.
29) The statute of repose begins to run when the plaintiff suffers injury.
30) Under the doctrine of comparative negligence, if the defendant is 50 percent responsible for
injuries worth $10,000 suffered by the plaintiff, then the defendant must pay $5,000 in damages.
31) Under the defense of contributory negligence, if Mary is partially responsible for her injuries,
then she can recover partial damages from the defendant.
32) A manufacturer of matches is not strictly liable if an arsonist uses their matches to light fire
to a building.
33) If the statute of limitations for strict liability for a particular state is two years and a plaintiff
brings a product liability suit to court three years after the injury, the defendant is relieved of
liability.
34) If the statute of repose for strict liability is five years and an injured party files a suit seven
years after the date of purchase of a defective product, the manufacturer or seller of that
defective product is relieved of liability.
35) Any alteration or modification of a product after it leaves the seller’s possession can make
the seller strictly liable for injuries caused by the product.
36) ________ is a tort related to defective products in which the defendant has breached a duty
of due care and caused harm to the plaintiff.
A) Misrepresentation
B) Negligence
C) Nuisance
D) Fraud
37) Diane bought an action figure for her son David from Terrence’s Toy Shop. The packaging
did not mention that the toy contained small detachable parts. David accidentally swallowed and
choked on one of the detachable parts and had to be taken to the hospital. On which of the
following product liability charges can Diane sue Terrence’s Toy Shop for damages?
A) negligence
B) misrepresentation
C) fraud
D) nuisance
38) Intentional misrepresentation occurs when a seller or lessor ________.
A) fails to warn customers about the dangerous propensities of a product
B) shows negligence in product design
C) fails to assemble a product carefully
D) conceals a defect in a product
39) Bartie’s, Inc. sells watercolors and pastels that are marketed as safe for use by children.
However, several accounts of lead poisoning were reported in children who used the products.
An investigation revealed that the company was knowingly manufacturing colors that contained
toxic amounts of the heavy metal. Which of the following torts has Bartie’s, Inc. committed?
A) battery
B) disparagement
C) misrepresentation
D) professional malpractice
40) ________ is a tort doctrine that makes manufacturers, distributors, wholesalers, retailers, and
others in the chain of distribution of a defective product liable for the damages caused by the
defect, irrespective of fault.
A) Absolute liability
B) Contingent liability
C) Superior responsibility
D) Strict liability
41) Henry is undergoing a surgery at Sacred Heart Hospital to insert an artificial pacemaker that
will keep his heartbeat regular. The pacemaker is manufactured by Benford, Inc. In this case, Dr.
DeBenedetto, the surgeon, is considered as the dominant element. Supposing that the pacemaker
fails to function as expected after the surgery, who would be strictly liable for its failure?
A) Benford, Inc
B) Dr. DeBenedetto
C) Henry
D) Sacred Heart Hospital
42) Which of the following statements is true about strict liability?
A) It applies only to manufacturers of a defective product.
B) It is liability without fault.
C) It requires privity of contract between the plaintiff and the defendant.
D) It covers casual sales and transactions.
43) Allenby Spares, Inc. is a shop that sells spare automotive parts from various manufacturers.
A customer buys a faulty brake manufactured by TurboDiezel, Inc. from Allenby Spares and is
involved in an accident due to the use of the faulty brake in his vehicle. Which of the following
is true of this situation?
A) Allenby Spares cannot be held strictly liable since the brake was manufactured by
TurboDiezel.
B) TurboDiezel cannot be held strictly liable as the company is not the seller in this case.
C) Neither Allenby nor TurboDiezel can be held strictly liable for the faulty brake.
D) Allenby Spares can be held strictly liable for the faulty brake as it is part of the distribution
chain.
44) Martin wins a car in a lottery. As he already owns a car, he decides to sell the new one to his
friend Ted. While driving the car, Ted gets into a head-on collision with another car. Due to a
defective Supplemental Restraint System (SRS) of the vehicle, the airbag does not deploy and
Ted is seriously injured. Which of the following statements is true of this situation?
A) Martin can be held strictly liable because he sold the car to Ted.
B) The car manufacturer cannot be held strictly liable as Ted had not bought the car from them.
C) Martin cannot be held strictly liable as the sale of the car counts as a casual transaction.
D) The driver of the other car can be held strictly liable due to his or her involvement in the
accident.
45) Bertha, a surgeon, performed a kidney transplant on one of her patients. The surgery was not
successful and the patient did not survive. Which of the following statements is true in this case?
A) Bertha cannot be held strictly liable as she was providing a service.
B) Bertha can be held strictly liable for the death of her patient.
C) Bertha and the medical staff assisting in the surgery are strictly liable for the death.
D) The donor of the kidney can be held strictly liable for the death of the patient.
46) ________ refers to all manufacturers, distributors, wholesalers, retailers, lessors, and
subcomponent manufacturers involved in a transaction.
A) Demand chain
B) Chain of command
C) Chain of distribution
D) Value chain
47) According to the doctrine of strict liability, which of the following parties is strictly liable for
injuries caused by a defective product?
A) only the manufacturers of the products
B) only the parties directly involved in the sale of the product to the customer
C) all parties providing services related to the product
D) all parties in the chain of distribution
48) Betty buys a lawnmower, manufactured by FlatPlanes, Inc., from Harvey’s department store.
A defect in the design of the blades causes the lawnmower to kick back on operation, injuring
Betty. Which of the following remedial actions is Betty entitles to?
A) Betty can sue Harvey’s department store for negligence.
B) Betty can sue either Harvey’s department store or FlatPlanes, Inc. for strict liability.
C) Betty can only sue FlatPlanes, Inc. for strict liability as they manufactured the defective
lawnmower.
D) Betty can only sue Harvey’s department store for strict liability as they sold her the defective
lawnmower.
49) Which of the following statements is true about the strict liability doctrine?
A) Privity of contract between the injured party and defendant is mandatory.
B) Injured bystanders cannot recover damages under the strict liability doctrine.
C) Parties in the chain of distribution are strictly liable only to the customer who buys the
product.
D) Injured bystanders are entitled to the same protection as the consumer or user.
50) Mary was getting a ride home in John’s new car. On the way, a malfunctioning brake caused
an accident and both Mary and John were injured. Which of the following statements is true of
this situation?
A) Mary can recover from a strict liability lawsuit against the manufacturer of John’s car.
B) Mary can file a strict liability lawsuit against John.
C) Mary can file a negligence lawsuit against the dealership that sold John his car.
D) John can file a negligence lawsuit against the dealership from which he bought the car.
51) ________ refers to monetary damages that are awarded to punish a defendant who either
intentionally or recklessly injured the plaintiff.
A) Reliance damages
B) Consequential damages
C) Punitive damages
D) Nominal damages
52) A defect in manufacture occurs when a manufacturer fails to ________.
A) design a product that is safe for users
B) adequately check the quality of a product
C) warn customers about the possible dangers of the product
D) provide proper packaging for the products
53) Dorothy purchases a chair that was made by Woode Designs, Inc. While making the chair,
the legs were not fixed properly to the base. When Dorothy sits on the chair, it breaks and she is
injured. In a strict liability lawsuit, which of the following can Dorothy cite as a defect in the
chair?
A) failure to provide adequate instructions
B) defect in design
C) failure to warn
D) defect in manufacture
54) Clayton, Inc. is a toy manufacturer that has released a new line of action figures. The toys are
targeted to children between the ages of one to two. However, they come with tiny detachable
weapons that can be accidentally swallowed by children of that age. Which of the following
defects do the action figures have that will make them strictly liable for any injuries caused?
A) defect in design
B) failure to provide adequate instructions
C) failure to warn
D) defect in packaging
55) Which of the following statements is true when there is a defect in design of a product?
A) There was a failure to provide adequate instruction on use of the product.
B) There was a failure to warn customers about the possible dangers of using the product.
C) A single item is defectively designed and it has the potential to cause injury.
D) All of the products are defectively designed and have the potential to cause injury.
56) ________ is a doctrine that says automobile manufacturers are under a duty to design
automobiles so they take into account the possibility of harm from a person’s body striking
something inside the automobile in the case of a car accident.
A) Crash avoidance
B) Crashworthiness
C) Risk compensation
D) Conspicuity
57) ________ refers to a defect that occurs when a manufacturer does not place information
about the dangers of using a product on its packaging, causing injury if the dangers are unknown.
A) Failure to warn
B) Defect in manufacture
C) Failure to provide adequate instructions
D) Defect in packaging
58) Kicker’s, Inc. has produced a new kind of candy bar, but they fail to mention on the
packaging that the bar contains gluten and nuts. Consequently, many consumers who eat the bars
suffer from severe allergic reactions. Which of the following can the injured customers cite as a
defect in a strict liability lawsuit against Kicker’s?
A) defect in design
B) defect in packaging
C) failure to warn
D) failure to provide adequate instructions
59) When the containers of a product are not tamperproof, it is termed as a ________.
A) defect in manufacture
B) defect in design
C) defect in packaging
D) failure to warn
60) Spring Stream sells bottled water that it claims contain vital minerals and salts not found in
rival brands. The company also claims that using tamperproof seals on the bottles would
minimize the health benefits of the water. As a result, many shady establishments refill these
water bottles with contaminated water and sell them again. People who drink the water suffer
from various water-borne diseases. Which of the following forms the grounds on which affected
customers can bring a strict liability lawsuit against Spring Stream?
A) There was a defect in the manufacture of the bottled water.
B) There was a defect in the packaging of the bottled water.
C) The company failed to provide warnings about the dangers of contaminated water.
D) There was a defect in the design of the water bottles.
61) Michael wanted to build a small princess castle for his daughter in the backyard. He decided
to turn it into a do-it-yourself project, so he bought the disassembled parts of the castle from Big
Ben Forts, Inc. However, after the purchase he found that the manual provided by the company
gave vague directions that were hard to understand. He built the castle by following the manual,
but after a few days the castle collapsed and injured his daughter who was playing inside. Which
of the following actions can Michael take in this situation?
A) He can file a negligence lawsuit against the store from which he bought the castle.
B) He can file a strict liability lawsuit against Big Ben Forts for failure to warn about the
possible dangers of the product.
C) He can file a strict liability lawsuit against Big Ben Forts for failure to provide adequate
instructions on assembling the product.
D) He can sue Big Ben Forts for defects in the packaging of their products.
62) ________ is a defect that occurs when a manufacturer does not provide detailed directions
for safe assembly and use of a product.
A) Failure to warn
B) Failure to provide adequate instructions
C) Defect in manufacture
D) Defect in design
63) ________ refers to an alteration or a modification of a product by a party in the chain of
distribution that absolves all prior sellers from strict liability.
A) Generally known danger
B) Assumption of the risk
C) Abnormal misuse
D) Supervening event
64) Clive buys a rifle from Gun Manufacturing Company and goes hunting. During the hunting
expedition he accidentally shoots himself in the foot. Which of the following would be true of
this case?
A) Clive can bring a strict liability lawsuit against the company for its failure to warn him about
the possible dangers of firearms.
B) Clive can bring a strict liability lawsuit against the company for failure to provide adequate
instructions on the use of the rifle.
C) Clive cannot take any action because the handling of firearms entails generally known
dangers.
D) Clive cannot take any action against the company because he had abnormally misused the
product.
65) Companies that manufacture products to government specifications are not liable if such
products cause injury because ________.
A) the companies have government contractor defense
B) the use of these products entails generally known dangers
C) these products are abnormally misused
D) people assume the risk when using these products
66) A man tries to swallow a pen as part of a circus act. The pen becomes lodged in his throat
and he is taken to a hospital for immediate medical attention. The man sues the company that
manufactured the pen. Which of the following would be the best defense for the pen
manufacturer in this lawsuit?
A) They can claim that the product carried generally known dangers.
B) They can claim that the product was abnormally misused.
C) They can claim that the injury was caused by a supervening event.
D) They can claim that the plaintiff had assumed the risk when buying the product.
67) Bill buys a truck and replaces the regular tires with large tires to turn the vehicle into a
monster truck. When he tries to drive the truck, the oversized tires cause the truck to roll over
and crash. Bill then files a strict liability lawsuit against the truck manufacturer to recover for his
injuries. Which of the following is the best defense for truck manufacturer in this lawsuit?
A) government contractor defense
B) assumption of the risk
C) generally known danger
D) supervening event
68) To assert ________ as a defense, the defendant must prove that the plaintiff knew and
appreciated the risk of the product.
A) supervening event
B) assumption of the risk
C) generally known dangers
D) abnormal misuse
69) A pharmaceutical company has disclosed a list of side effects of its new prescription drug. A
consumer, taking the drug in the right doses, suffers from one of these side effects and sues the
company for product liability. Which of the following would be the pharmaceutical company’s
defense in this lawsuit?
A) The consumer was injured due to a supervening event.
B) The consumer had assumed the disclosed risks when purchasing the drug.
C) The side effects suffered by the consumer were generally known dangers of the drug.
D) The consumer abnormally misused the drug.
70) ________ refers to a statute that requires an injured person to bring an action within a certain
number of years from the time that he or she was injured by a defective product.
A) Statute of limitations
B) Statute of frauds
C) Statute of repose
D) Statute of general application
71) ________ refers to a statute that limits the seller’s liability to a certain number of years from
the date when the product was first sold.
A) Statute of limitations
B) Statute of frauds
C) Statute of general application
D) Statute of repose
72) The term ________ refers to a defense that says a person who is injured by a defective
product but has been negligent and is partially responsible for his or her own injuries cannot
recover from the defendant.
A) contributory negligence
B) negligence per se
C) assumption of risk
D) comparative negligence
73) The term ________ refers to the doctrine which applies to strict liability actions that says a
plaintiff who is contributorily negligent for his or her injuries is responsible for a proportional
share of the damages.
A) negligence per se
B) assumption of risk
C) comparative fault
D) contributory negligence
74) Ruggers is a maker of a range of highly popular cruise motorcycles. Tim buys a Ruggers
motorcycle from a dealership and suffers an accident. While recuperating from his injuries, he
learns that Ruggers has recalled all motorcycles it had manufactured and sold in the previous two
years, owing to a previously unknown defect in their braking systems. Tim brings a product
liability lawsuit against the motorcycle manufacturer and claims $50,000 in damages. The defect
in the motorcycle is found to be half responsible for the accident, while Tim’s own negligence of
traffic rules contributed to the rest. Under the doctrine of contributory negligence, what would be
the ruling of the court hearing this case?
A) Tim can recover $25,000 worth of damages from the Ruggers and the rest from the dealership
from which he purchased the motorcycle.
B) Tim can recover $50,000 worth of damages from the motorcycle manufacturer.
C) Tim can recover $50,000 worth of damages plus any punitive damages that may be awarded
by the jury.
D) Tim cannot recover any damages from the motorcycle manufacturer.
75) The plaintiff in a product liability lawsuit has suffered $100,000 worth of damages from an
automobile accident. A defect in manufacture of the plaintiff’s vehicle is found to be 60 percent
responsible for the accident, while the plaintiff’s own negligence is 40 percent responsible. Under
the doctrine of comparative negligence, how much would the defendant—the manufacturer of
the vehicle—have to pay the plaintiff in damages?
A) $60,000
B) $40,000
C) $100,000
D) The defendant would not have to pay any amount in damages.
76) Compare the tort doctrines of negligence and misrepresentation.
77) What are product defects? What are the most common defects that will allow plaintiffs to
recover for strict liability?
78) Describe how courts can evaluate the adequacy of a product’s design.
79) What is the purpose of the crashworthiness doctrine?
80) Describe the functions of the statute of limitations and the statute of repose.