CHAPTER 22
WARRANTIES AND PRODUCT LIABILITY
ANSWER TO CRITICAL ANALYSIS
QUESTION IN THE FEATURE
INSIGHT INTO ETHICS—CRITICAL THINKING—INSIGHT INTO THE SOCIAL ENVIRONMENT (PAGE 434)
Why would some legislators believe that the six-part voluntary labeling system for video games is not
sufficient to protect minors? One reason that some legislators may believe a labeling system for video
games is not sufficient to protect minors is the ubiquity of warnings—they are so numerous that users
and other consumers most likely routinely ignore them. Another reason might be that the proposed
system is voluntary—on that basis it may be least used where it is most needed.
ANSWERS TO QUESTIONS
AT THE ENDS OF THE CASES
CASE 22.1—QUESTION (PAGE 425)
THE E-COMMERCE DIMENSION
If Webster had made the chowder herself from a recipe that she had found on the Internet, could she
have successfully brought an action against its author for a breach of the implied warranty of
merchantability? Explain. No, An implied warranty of merchantability arises only in a sale or lease of
190 UNIT FOUR: DOMESTIC AND INTERNATIONAL SALES AND LEASE CONTRACTS
CASE 22.2—QUESTIONS (PAGE 433)
WHAT IF THE FACTS WERE DIFFERENT?
Suppose that the Phenergan label had contained a stronger warning against the IV-push method without
explicitly stating that the method should not be used. Would the result in Levine’s case have been the
THE LEGAL ENVIRONMENT DIMENSION
In a 2006 preamble to a regulation, for the first time the FDA expressed the opinion that state-law
actions “threaten FDA’s statutorily prescribed role as the expert Federal agency responsible for
evaluating and regulating drugs.” What might have motivated this dramatic change in the agency’s
traditional position? According to the Court in the Levine case, “the FDA long maintained that state law
CASE 22.3—QUESTIONS (PAGE 436)
1A. What did the court mean when it stated that strict product liability laws are “not fully congruent”
with classical tort law? A major difference between classical tort law and strict product liability has to
do with fault. Strict liability, and thus strict product liability, is liability without fault. In other words, a
person does not have to intend to commit a wrongful act, or even commit the act through his or her
negligence, to be liable in strict liability. As the court noted in this case, “In strict products liability, the
focus is on the nature of the product rather than the conduct of either the manufacturer or the person
injured.” Another important difference between classical tort law and strict product liability has to do
with the purpose of the laws. The basic purpose of classical tort law is to provide remedies for the
invasion by one party of the protected interests of another. These interests include personal physical
safety, the security of personal property, and intangible interests in such areas as privacy and repu-
tation. The basic purpose of strict product liability has to do with, as the court stated, “the relationship
between manufacturers and consumers.” Generally, manufacturers have the advantage over
consumers in terms of bargaining power, and strict product liability laws are designed to overcome this
imbalance to some extent by protecting the consumer against unsafe products. Additionally,
manufacturers are deemed to be in a better position to assume liability for their defective products,
192 UNIT FOUR: DOMESTIC AND INTERNATIONAL SALES AND LEASE CONTRACTS
regardless of fault, because they can ultimately pass on the costs associated with liability to other
consumers in the form of higher prices.
2A. Why would the enforcement of the exculpatory clause in this case conflict with the rationale
underlying strict product liability? One of the goals of strict product liability laws is to protect consumers
against unsafe products. Another goal is that the costs associated with injuries caused by their products
should be borne by the manufacturers, sellers, or distributors of those products rather than by
ANSWERS TO QUESTIONS IN THE REVIEWING FEATURE
AT THE END OF THE CHAPTER
1A. Statements
This statement did not create an express warranty, because it is a statement of opinion. Only a
statement of fact creates an express warranty. If the seller or lessor makes a statement that relates to
the supposed value or worth of the goods, or makes a statement of opinion or recommendation about
the goods, the seller or lessor is not creating an express warranty
2A. Warranty disclaimer
A warranty disclaimer must be clear and specific, not buried in paperwork. Further, the disclaimer was
inconsistent with the promise made at the time of the purchase.
3A. Product liability theories
4A. Defense
In this situation, the dealer’s best defense would be comparative negligence. In many jurisdictions, the
plaintiff’s negligent or intentional actions may limit the liability of the defendant.
CHAPTER 22: WARRANTIES AND PRODUCT LIABILITY 193
ANSWER TO DEBATE THIS QUESTION IN THE REVIEWING FEATURE AT
THE END OF THE CHAPTER
No express warranties should be created by the oral statements made by salespersons about a
product. If no express warranties could be created orally by salespersons, then consumers would
demand written warranties for which there would be no arguments about what was and what was not
warranted by the retailer or manufacturer of a product. This would avoid a “he said” or “she said”
ANSWERS TO QUESTIONS AND CASE PROBLEMS
AT THE END OF THE CHAPTER
22-1A. Implied warranties
(Chapter 22—Pages 425–426)
For Moon to have an implied warranty of fitness for a particular purpose, he must prove two elements:
(1) that the seller, Davidson, expressly or impliedly knew the particular purpose for which Moon would
use the goods; and (2) that Moon purchased the goods because of his reliance on the seller’s judgment.
22–2A. QUESTION WITH SAMPLE ANSWER: Product liability
The court should rule in favor of the manufacturer, finding that the gun did not malfunction but
performed exactly as Clark and Wright expected. The court should also point out that Clark and Wright
194 UNIT FOUR: DOMESTIC AND INTERNATIONAL SALES AND LEASE CONTRACTS
22-3A. Defenses to product liability
(Chapter 22—Pages 429, 430 & 435–436)
Baxter’s claimed defense of lack of privity of contract is invalid. Privity is not a requirement for an action
22-4A. Express warranties
(Chapter 22—Pages 422–423)
The court dismissed the plaintiffs’ complaint, and on the plaintiffs’ appeal, a state intermediate
22-5A. CASE PROBLEM WITH SAMPLE ANSWER: Product liability
The court granted the manufacturer’s motion for summary judgment and dismissed D’Auguste’s
complaint against it. D’Auguste appealed to a state intermediate appellate court, which affirmed the
judgment of the lower court. The appellate court noted that there was “no proof as to whether the
22-6A. Implied warranties
(Chapter 22—Pages 423–425)
The court granted Kallestad’s request, but on the Rothings’ appeal, the Montana Supreme Court
reversed the lower court’s judgment on this issue and remanded the case for trial. The state supreme
22–7A. Defenses to product liability
(Chapter 22—Pages 430–434 & 436–437)
To establish a strict product liability claim, a plaintiff must show among other things that the product
was in a defective condition, unreasonably dangerous to the user. A product can be defective and
22–8A. Product liability
(Chapter 22—Pages 431–434)
If there were any inadequacies in the warning label, they were not a substantial factor in bringing about
22-9A. A QUESTION OF ETHICS: Dangerous products
(a) The state supreme court held that the “ordinary consumer of a lighter, such as the Aim N
Flame here, is an adult—the typical user and purchaser. Therefore, the expectations regarding the Aim N
Flame’s use and safety must be viewed from the point of view of the adult consumer.” The court held
that the lighter met this test. “The purpose of a lighter, such as the Aim N Flame, is to produce a flame.
Clearly then, the ordinary consumer would expect that, when the trigger is pulled, a flame would be
produced. Here, the Aim N Flame was not used in its intended manner, i.e., by an adult.” But “[a]n
ordinary consumer would expect that a child could obtain possession of the Aim N Flame and attempt to
use it. Thus, a child is a reasonably foreseeable user. Likewise, an ordinary consumer would appreciate
the consequences that would naturally flow when a child obtains possession of a lighter. Specifically, an
(b) The court issued a summary judgment in Scripto’s favor, but on Calles’s appeal, a state
intermediate appellate court reversed this judgment, and Scripto appealed to the Illinois Supreme Court,
which affirmed the lower appellate court’s ruling, remanding the case for trial on Calles’s strict liability
claims. The state supreme court considered a number of factors to determine whether the lighter was
an unreasonably dangerous product, but concluded that “reasonable persons could differ on the weight
to be given the relevant factors, particularly where additional proofs are necessary, and thus could differ
on whether the risks of the Aim N Flame outweigh its utility. Therefore, reasonable persons could differ
as to whether the Aim N Flame is unreasonably dangerous, and we cannot say that Scripto was entitled
to judgment as a matter of law.”
ANSWER TO VIDEO QUESTION NO. 22–10
Matilda
198 UNIT FOUR: DOMESTIC AND INTERNATIONAL SALES AND LEASE CONTRACTS
(a) What warranties of title arise in the sales of used cars by dealers? Title warranties that
arise in the sales of used cars by dealers include the warranties that arise in the sales of goods
generally. Sellers warrant that they have good title to the goods they sell and that the transfer of
title is rightful. Sellers also warrant that the goods will be delivered free of encumbrances of
which a buyer is unaware at the time of contracting. And in most cases a used-car dealer selling
used cars fits the UCC definition of a merchant. A merchant warrants that the goods being sold
are free of any third person’s patent, trademark, or copyright claim.
(b) In the video, a father (Danny DeVito) who owns a used car lot uses a tool to turn back the
numbers on a vehicle’s odometer so that the mileage is inaccurate. When he sells this car, if he
tells the buyer the mileage is only 60,000 knowing that at it is really 120,000, has he breached an
express warranty? What if the seller did not make any oral statements about the car’s mileage?
Could the buyer claim an express warranty existed? Explain. Under the UCC, an express warranty
arises if a seller indicates goods conform to an affirmation or promise of fact, or a description.
The mileage on an odometer constitutes an affirmation or promise of fact, or a description, that
buyer would regard the numbers on an odometer as part of the basis of the bargain. In this case,
the dealer turned back the numbers, breaching an express warranty. In light of the mileage
(c) What would a person who buys the car in the video have to show to prove that the seller
breached the implied warranty of merchantability? An implied warranty of merchantability
automatically arises in every sale of goods by a merchant who deals in goods of the kind. To be
merchantable, goods must be “reasonably fit for the ordinary purposes for which such goods are
used.” They must be of at least average, fair, or medium-grade quality. The quality must be
comparable to quality that will pass without objection in the trade or market for goods of the
same description. To be merchantable, the goods must also be adequately packaged and labeled,
true mileage, as well as the likely reattachment of the glued bumper, and the sawdust in the
transmission would serve as proof.