Section 15.

2 Product Liability

Section 15.2 Product Liability

What Youll Learn

How to differentiate between product liability and strict liability (p. 327) How to describe the purpose of the Consumer Product Safety Act (p. 329)

Understanding Business and Personal Law

Consumer Protection and Product Liability

Section 15.2 Product Liability

What Youll Learn

How to identify the prohibitions contained in the Food, Drug, and Cosmetic Act (p. 329)

How to determine where to get consumer protection assistance (p. 330)

Understanding Business and Personal Law

Consumer Protection and Product Liability

Section 15.2 Product Liability Why Its Important Learning about product liability law will help you take effective action if you or a family member suffers injury from faulty products.

Understanding Business and Personal Law

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Section 15.2 Product Liability

Legal Terms
product liability (p. 327) strict liability (p. 327) adulterated (p. 329) intrastate sales (p. 330)

Understanding Business and Personal Law

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Section 15.2 Product Liability

Section Outline
What is Product Liability?
Strict Liability

Federal and State Consumer Protection Laws

Consumer Product Safety Act Food, Drug, and Cosmetic Act State and Local Laws
Understanding Business and Personal Law Consumer Protection and Product Liability

Section 15.2 Product Liability

Section Outline
Consumer Protection Assistance
Better Business Bureau

Understanding Business and Personal Law

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Section 15.2 Product Liability

Pre-Learning Question
What do you think product liability is?

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Section 15.2 Product Liability

What Is Product Liability?

Under product liability law, someone who is injured from a products unsafe or defective condition may recover damages. Manufacturers, sellers, and suppliers of goods can all be held responsible.
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Section 15.2 Product Liability

Strict Liability
You do not have to prove a negligent act on the part of the manufacturer or seller if you are hurt using a defective product.

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Section 15.2 Product Liability

Strict Liability
Strict liability makes manufacturers or suppliers responsible for selling goods that are unreasonably dangerous.

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Section 15.2 Product Liability

Strict Liability
People who are injured or who suffer property damage from a defective product may recover from the manufacturer or seller if they can prove all of the following:

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Section 15.2 Product Liability

Strict Liability
The manufacturer or seller was engaged in the business of selling the product. The product was unreasonably dangerous to the user or consumer.

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Section 15.2 Product Liability

Strict Liability
The defective condition was the cause of the injury or damage. The defective condition existed when the product left the hands of the manufacturer or seller.

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Strict Liability
The consumer suffered physical harm or property damage as a result of using the product.

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Section 15.2 Product Liability

Pre-Learning Question
What are some federal and state consumer protection laws?

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Section 15.2 Product Liability

Federal and State Consumer Protection Laws

Both the federal and state governments pass laws to protect consumers in the marketplace.

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Section 15.2 Product Liability

Federal and State Consumer Protection Laws

Two federal laws are the: Consumer Product Safety Act Food, Drug, and Cosmetic Act

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Section 15.2 Product Liability

Consumer Product Safety Act

This law protects you from unreasonable risk of injury while using consumer products that are sold in interstate commerce.

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Section 15.2 Product Liability

Consumer Product Safety Act

Defects in products are divided into three categories: 1. Manufacturing defects 2. Poor design 3. Inadequate instructions and warnings about the safe use of the product
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Section 15.2 Product Liability

Food, Drug, and Cosmetic Act

This law prohibits the manufacture and shipment of faulty products in interstate commerce. Faulty products include any food, drug, cosmetic, or health-related device that is injurious, adulterated, or misbranded.
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Section 15.2 Product Liability

Food, Drug, and Cosmetic Act

A food or drug is said to be injurious if it contains any substance that may make it harmful to health.

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Section 15.2 Product Liability

Food, Drug, and Cosmetic Act

An adulterated food or drug is one that contains any substance that will reduce its quality or strength below minimum standards.

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Section 15.2 Product Liability

Food, Drug, and Cosmetic Act

A food or drug is misbranded if its labeling or packaging is false or misleading.

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Section 15.2 Product Liability

Food, Drug, and Cosmetic Act

The government uses other methods to discourage the sale of goods considered harmful to the public health. They include: Unusually high taxes Labeling and packaging Outright prohibition
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15.2 15.2 Product Liability Section

Warning Labels

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Section 15.2 Product Liability

True or False: A food or drug is said to be injurious if it contains any substance that may make it harmful.

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Section 15.2 Product Liability

ANSWER
True

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Section 15.2 Product Liability

State and Local Laws

If goods are manufactured and sold only within the boundaries of a state, the federal government has no control over the goods. For this reason, many states have enacted their own product liability laws.
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Section 15.2 Product Liability

State and Local Laws

These laws apply to intrastate sales (sales within a state). Nearly all states and localities license and regulate establishments that sell food.
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Section 15.2 Product Liability

True or False: The federal government applies unusually high taxes on harmful products in order to raise enough money to warn consumers of its dangers.
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Section 15.2 Product Liability

ANSWER
False

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Section 15.2 Product Liability

Pre-Learning Question
Where can you go to get consumer protection assistance?

Understanding Business and Personal Law

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Section 15.2 Product Liability

Consumer Protection Assistance

Many state and local governments have offices of consumer affairs to educate consumers and help protect them against fraud.

Understanding Business and Personal Law

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Section 15.2 Product Liability

Consumer Protection Assistance

The federal Consumer Product Safety Commission establishes safety standards for consumer products. For information or to report unsafe products you can call its hotline at 1-800-638-CPSC.
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Section 15.2 Product Liability

Better Business Bureau

The Better Business Bureau (BBB) is an example of a nongovernment agency that hears consumer complaints at the local and state levels. Its mission is to promote high ethical relationships between businesses and the public.
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Section 15.2 Product Liability

Better Business Bureau

The BBB provides services that include the following: Provides information on a businesss past dealings Helps resolve complaints Provides information on charitable organizations
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Section 15.2 Product Liability

Better Business Bureau

Publishes consumer publications, videos, and Internet advisories Alerts businesses, consumers, and law enforcement agencies about current scams and frauds Provides Internet reliability and privacy Trustmark seals
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Section 15.2 Product Liability

True or False: Intrastate sales involve the buying and selling of merchandise within a state, not across state lines.

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Section 15.2 Product Liability

ANSWER
True

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Section 15.2 Assessment

Reviewing What You Learned 1. What is the difference between product liability and strict liability?

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Section 15.2 Assessment

Reviewing What You Learned Answer

Manufacturers and sellers have product liability when they place defective, unhealthy, or unsafe items on the market. They are strictly liable, without regard to fault, when they sell unreasonably dangerous products.
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Section 15.2 Assessment

Reviewing What You Learned 2. What is the purpose of the Consumer Product Safety Act?

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Section 15.2 Assessment

Reviewing What You Learned Answer

Protects consumers from unreasonable risk of injury from using consumer products.

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Section 15.2 Product Liability

Section 15.2 Assessment

Reviewing What You Learned 3. What prohibitions are contained in the Food, Drug, and Cosmetic Act?

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Section 15.2 Product Liability

Section 15.2 Assessment

Reviewing What You Learned Answer

It prohibits the manufacture and shipment of faulty products in interstate commerce.

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Section 15.2 Product Liability

Section 15.2 Assessment

Reviewing What You Learned 4. Where can you find consumer protection assistance?

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Section 15.2 Assessment

Reviewing What You Learned Answer

From state and local consumer protection agencies, such as the Consumer Product Safety Commission and the Better Business Bureau.

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Section 15.2 Product Liability

Section 15.2 Assessment

Critical Thinking Activity Consumer Protection

Why do you think so many consumer protection laws are necessary?

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Section 15.2 Product Liability

Section 15.2 Assessment

Critical Thinking Activity Answer Consumer Protection

Answers will vary. Students will probably propose that laws are necessary to protect consumers from unethical businesses and unsafe products.

Understanding Business and Personal Law

Consumer Protection and Product Liability

Section 15.2 Product Liability

Section 15.2 Assessment

Legal Skills in Action

Production Information Labels Olivia has taken nonprescription allergy medication for several years. Recently, the medication was taken off the market because of an ingredient called PPA.

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Section 15.2 Assessment

Legal Skills in Action

Production Information Labels Now Olivia wonders if any other dangerous ingredients were in the medication that she took.

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Section 15.2 Assessment

Legal Skills in Action

Production Information Labels In groups of two or three, investigate and review the ingredients on the labels of some of the products you use and the food you eat at school.

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Section 15.2 Product Liability

Section 15.2 Assessment

Legal Skills in Action

Production Information Labels You can review products such as soda, snack items from vending machines, chewing gum, and cosmetics. Make a list of the ingredients you are not familiar with.

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Section 15.2 Assessment

Legal Skills in Action

Production Information Labels Will you continue eating the food and using the products? Why or why not?

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Section 15.2 Assessment

Legal Skills in Action Answer

Production Information Labels Lists will vary but could include ingredients such as xanthan gum, stearic acid, partially hydrogenated cottonseed oil, and maltodextrin.

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