Book Title
Business Law with UCC Applications 14th Edition

978-0077733735 Chapter 15 Solution Manual

April 10, 2019
Chapter 15 Product Liability and Consumer Protection
Opening Case Questions
1. The Federal Trade Commission protects consumers in a number of diverse ways: Here is how
the text explains it: “The Federal Trade Commission … (has) the authority to oversee and
eliminate deceptive and unfair practices in commerce. These powers include:
a. To conduct investigations into the practices of businesses.
b. To investigate possible antitrust violations.
c. To compel interstate businesses to file reports with the commission detailing their
operations that fall within the FTC’s jurisdiction.
2. As we will see later in the text, in the chapter on agency law, traditional agency law demands,
under the theory of vicarious liability, that employers (corporate officers) be liable for the
4. Ross wants to be held liable only if she had the power to direct these deceptive campaigns and
5. There are two standards for judging corporate wrong doing, one for false advertising and one
for securities fraud because the two offenses are qualitatively different. False advertising occurs
The CAS as Social Engineer: The Corporate Veil—Protection or Deception?
1. An internal contradiction does seem to exist here. It would seem that Ross is asking for
protection behind the corporate veil while the Hobby Lobby folks are asking for protection
2. The Hobby Lobby case would seem to be the exception. The protective nature of the corporate
A Question of Ethics: Unsafe Products v. Dangerous Products
1. Most learners will respond by noting that the function of a firearm or explosive device (a bomb)
is to kill or at least injure another person or persons (or some other living thing, for that matter). On the
2. Again, as noted above, explosive devices (bombs) can be used in demolition and firearms can
3. The “dangerous per se” rule will not prevent killing or create crime free neighborhoods. The
per se rule might lessen the number of opportunities for killing, since other methods of killing, quite
frankly, take more effort and might, therefore, save some (many?) lives, but creating crime free
neighborhoods---in a word, “no.” To eliminate crime-free neighborhoods (or to create rebellion-free
third world nations, for that matter) the underlying conditions that cause crime (and/or rebellion and the
4. If a handgun works exactly as planned, it is not unsafe but it is dangerous. A dangerous product is
5. There are many products that could be included under the “dangerous per se” rule. Here is a
The CAS as Social Engineer: Multiple Definitions for a Single Concept
Questions for Review and Discussion
1. Many legal professionals including judges, executives, legislators, law professors, and general
practitioners use the law for social engineering purposes. Thus, judges rule that certain activities are
inherently dangerous to ensure that those people and institutions that engage in such activities are liable
when someone is injured or property is damaged. Executives, such as the president, push through
legislation that will reshape the health care industry in this country. Similarly, governors initiate
legislation to try to eliminate public employee unions, as occurred in Wisconsin, Michigan, and Ohio.
2. Public interest is a program, a law, an activity, or some similar situation that somehow promotes
3. A lawsuit based on negligence requires the plaintiff to prove the four elements of negligence: (1)
duty (2) breach of duty (3) proximate cause and (4) actual harm. In strict liability case, the plaintiff
6. Some unfair tactics include sending unordered merchandise, making fraudulent
7. The rules used to protect consumers include the negative option rule, the cooling-off period rule,
Cases for Analysis
1. Yes. An injured party can recover under the theory of strict liability in tort if there is sufficient
evidence that an unreasonably dangerous product design proximately caused the injuries. In this case
2. No. There is no evidence that El Toro’s design proximately caused the injury or that
2. Yes. A debt collector may not communicate with the consumer at any unusual or inconvenient
3. Yes. Under the Used Car Rule, used car dealers who sell more than five used vehicles in a
twelve-month period must place a window sticker, called a Buyers Guide, in the window of each used
5. Yes. The federal Odometer Law prohibits people from disconnecting, resetting, or altering the
odometer of a motor vehicle to register any mileage other than the true mileage driven. Anyone who
7. Yes. Consumer protection laws apply to transactions entered into between someone conducting a
business activity and a consumer. A consumer is someone who buys or leases real estate, goods, or
8. No. Sales of consumer goods or services made away from the sellers regular place of business
may be canceled within three business days after the sale occurs. Under New York law, the three-day
9. No. The court said that even though the consumer protection law does not exclude services
performed by physicians, it is clear that it is intended to prohibit unlawful practices relating to trade or
commerce and of the type associated with business enterprises. It is equally clear that the legislature
did not intend the law to apply to physicians rendering medical services. The liability of a physician,