Managers And the Legal Environment Strategies for the 21st Century 8th Edition by Constance E. Bagley – Test Bank

Managers And the Legal Environment Strategies for the 21st Century 8th Edition by Constance E. Bagley – Test Bank

Chapter 10

1. To recover for a defective product, an injured person must be in a contractual relationship (privity) with the seller.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States – BUSBROG: – Analytic
ACCREDITING STANDARDS: DISC: – AICPA: BB-Legal
TOPICS: 10-1a Breach of Warranty
KEYWORDS: Blooms: Knowledge

2. Most states in the United States have adopted strict product liability whereby an injured person may recover damages by showing that a defendant was negligent.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
NATIONAL STANDARDS: United States – BUSBROG: – Analytic
ACCREDITING STANDARDS: DISC: – AICPA: BB-Legal
TOPICS: 10-1 Theories of Recovery
KEYWORDS: Blooms: Knowledge

3. In regard to a product liability action, a disclaimer of liability is generally effective.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States – BUSBROG: – Analytic
ACCREDITING STANDARDS: DISC: – AICPA: BB-Legal
TOPICS: 10-5 Who May Be Strictly Liable for Product Defects?
KEYWORDS: Blooms: Comprehension

4. Strict liability in tort applies only to products, not to services.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States – BUSBROG: – Analytic
ACCREDITING STANDARDS: DISC: – AICPA: BB-Legal
TOPICS: 10-3 What is a Product?
KEYWORDS: Blooms: Comprehension

5. An unusual use that is reasonably foreseeable may be considered a normal use of a product.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States – BUSBROG: – Analytic
ACCREDITING STANDARDS: DISC: – AICPA: BB-Legal
TOPICS: 10-8e Unforeseeable Misuse of the Product
KEYWORDS: Blooms: Comprehension

6. The main holding in CASE 10.1, MacPherson v. Buick Motor Co. (1916), was Buick’s liability without privity of contract with the buyer, MacPherson.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
ACCREDITING STANDARDS: DISC: – AICPA: BB-Legal
TOPICS: 10-1b Negligence
KEYWORDS: Blooms: Analysis

7. A court is not bound by the Restatement’s formulation of product liability law.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States – BUSBROG: – Analytic
ACCREDITING STANDARDS: DISC: – AICPA: BB-Legal
TOPICS: 10-1 Theories of Recovery
KEYWORDS: Blooms: Comprehension

8. A design defect may result from the manufacturer’s choice of the product’s materials.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States – BUSBROG: – Analytic
ACCREDITING STANDARDS: DISC: – AICPA: BB-Legal
TOPICS: 10-4b Design Defect
KEYWORDS: Blooms: Comprehension

9. Under federal law, manufacturers, but not sellers, may be held strictly liable for a defective product.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States – BUSBROG: – Analytic
ACCREDITING STANDARDS: DISC: – AICPA: BB-Legal
TOPICS: 10-1c Strict Liability in Tort
KEYWORDS: Blooms: Comprehension

10. A seller should enter into a contract of indemnity with a manufacturer giving the seller a right to reimbursement if found liable for a defect caused by the manufacturer.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
NATIONAL STANDARDS: United States – BUSBROG: – Analytic
ACCREDITING STANDARDS: DISC: – AICPA: BB-Legal
TOPICS: 10-5 Who May Be Strictly Liable for Product Defects?
KEYWORDS: Blooms: Comprehension