Overview

Product Liability refers to the liability of any or all parties along the chain of manufacturing of any product for damages caused by that product. It grew out of tort law and relies on basic tort theories. A product liability action can be based on negligence, breach of warranty, or strict product liability.

The law of products liability is found mainly in common law (state judge-made law) and in the Uniform Commercial Code (UCC). In order to obtain uniformity among state laws, especially as it applies to sales contracts, the National Conference of Commissioners on Uniform State Laws and the American Law Institute drafted a set of commercial laws applicable to all states. This effort was called the Uniform Commercial Code (UCC).

It is important for business managers to understand the UCC. The UCC covers any contract or agreement for sale of goods - leases, gifts, purchases - all sales transactions between a buyer and a seller. This includes banking transactions and transfers, bank notes, securities exchanges, bulk storage of goods and shipments and transportation of goods.

Article 2 of the UCC deals with the sales of goods and it has been adopted by most states. The most important product liability sections (of the UCC) are the implied and express warranties of merchantability in the sales of goods. Article 2 deals with governing the sale of goods in all states except Louisiana. To be considered a good, an item must be tangible or have "physical existence" personal property. Your computer is a good; your car or your boat is a good.

The purpose of the UCC is to try to standardize (or make uniform) transactions and sales agreements between our 50 states and the District of Columbia. Land is considered Real Property, not personal property so it is not a good. (The UCC does NOT cover contracts for real estate or services.)

Assignment

Read Case 13-2, Williams vs. Braum Ice Cream Store, Inc., located in your textbook in Chapter 13 on pages 354-355. In this case, the court set forth the two tests used in various jurisdictions to decide whether a breach of warranty of merchantability exists. The court explained both the foreign-natural test and reasonable expectations test. The case arose after the plaintiff broke a tooth on a cherry pit that was in cherry-pecan ice cream.

Read this case carefully, and then respond to the questions posed below.

1.Summarize the relevant facts of the case.

2.What is the conclusion?

3.What is the fundamental difference between the natures of the two tests discussed in this case?

4.Which of the two tests is more likely to yield ambiguous reasoning when applied?

Guidelines

1.Be sure that you craft your answer in at least one well-developed paragraph for each question.

2.Be sure to explain and support your opinions and positions. (You must justify your responses).

3.Proofread your work to ensure there are no spelling, grammar, or sentence structure errors.

4.If you use another resource (optional), ensure you properly cite it using APA format.

5.Apply your critical thinking skills.

Unit 2 Review Assignment

Please write in complete sentences. You should work on this assignment as you go through the assigned readings and chapters in your textbook. Avoid copying directly from the text. Your responses should be in your own words.

This assignment has been formatted in a Microsoft Word document for your convenience. Click the link U2 Review Assignment to download this assignment in Word. Insert your responses directly under each question.

Chapter 8

1. What is the definition of business ethics?

2. What is meant by the term social responsibility?

3. Identify two purposes that a code of ethics might serve in a business.

Chapter 10

4. How is a contract generally defined?

5. What are different classifications of contracts? (List and explain).

6. What are necessary elements of a legal contract? (List and explain).

Chapter 11

7. How is a contract properly discharged?

8. Explain the term breach of contract.

9. What are two possible remedies for a breach of contract?

Chapter 12

10. What is tort law? Why it is important for a business manager to have a basic understanding of tort law?

Scenario:

John Smith had a car accident on Interstate Highway 64. He claimed his 2009 Toyota Corolla accelerated when he tried to brake. The car accelerated to speeds of over 100 mph. John lost control of his car and crashed. As a result of the accident, John's wife was killed in the crash and he was hospitalized for several months with severe injuries. John had a car loan with the Toyota dealership. During the time that John was hospitalized, he didn't pay his loan. When he recovered and went back to work, he still did not pay the loan. He felt he was no longer responsible for paying this debt because he felt the company was at fault.

In your initial post, please discuss the following points:

•Was John legally justified in his decision to stop paying the loan to Toyota? Explain.

•In your research about Toyota and the acceleration issue, did Toyota management acknowledge there was a problem?

•If the factory workers (assigned to a testing department) were aware of an acceleration issue, did they (the workers) have an ethical and social responsibility to disclose that information to the public before the product went to market? Explain and defend your position.

•Additionally, if these factory workers were aware of an acceleration issue, do you think they should be held personally liable for not telling the public about a potentially life threatening defect that they were producing? Explain and defend your position.

When you respond to your peers, please respond to classmates that have taken a different position than yours and counter their points. If you can't find a classmate that didn't take a different position than yours, add your input with points that they might have missed.

Provide an appropriate subject bar that captures our interest and gives us an idea as to what your post is about.

Attachment:- case_13.rar