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Two experienced welders were working inside a barge. Both had received training in their respective trade, and safety training required by the government and the company. The company regularly stressed the importance of safety procedures to prevent accidents. A gas hose leading to the welding torch developed a leak that the workers apparently could not smell because of "nasal fatigue" from having inhaled so much gas. One worker lit a cigarette, igniting the gas, killing both workers. The workers' heirs sued the gas and gas hose producers in strict liability. Was either company liable?

a. No, because of the negligence of the employees.

b. Yes, because there was likely a defect in the hose that could have been prevented.

c. No, because only one company can generally be liable in this type of accident.

d. Yes, because this type of accident does not happen to experienced workers.

Woeste ate raw oysters at a restaurant and died a week later from the bacteria Vibrio vulnificus. The bacteria naturally occur in oysters from warm water. Vibrio has no effect on most people, but can be fatal to people with a weak immune system—as Woeste had due to Hepatitis C and cirrhosis of the liver. The restaurant menu warned of the danger of eating raw oysters, especially for persons with "chronic illness of the liver." Woeste ordered without reading the menu warning. His estate sued the restaurant and the Texas company that harvested the oysters for negligence and strict liability. What is the likely outcome?

a. The restaurant is liable for failure to warn of every possible risk.

b. The restaurant breached its implied warranty of merchantability by serving a dangerous product.

c. The restaurant is not liable to the estate of Woeste.

d. The restaurant is liable under strict liability for selling a dangerous product.

Dam Good Adventures operates a helicopter tour business near Lake Mead, Nevada. Lake Mead is the site of Hoover Dam. Dam Good has purchased 5 helicopters over the 214 years it has been in business and its mechanic has rebuilt the engines on all of the helicopters. In addition, Dam Good's mechanic has altered the timing mechanisms on the helicopters so that they are able to hover longer and with less noise, two features that are important for tourists. One of Dam Good's helicopters crashed over Lake Mead, killing the pilot and the four passengers on board. Which of the following statements is correct?

a. The manufacturer is always liable for a products liability claim.

b. The alteration of the helicopters is a potential bar to recovery from the manufacturer.

c. Dam Good is jointly liable with the manufacturer for negligence for its alteration to the helicopter.

d. Neither Dam Good Adventures nor the manufacturer is liable because of the assumption of the risk by the tourists.

Operation Management, Management Studies

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