Business Law Study Set 13

Business

Quiz 25 :

Product Liability: Warranties and Torts

Quiz 25 :

Product Liability: Warranties and Torts

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Jackson purchased a sealed can of Katydids, chocolate-covered pecan caramel candies manufactured by NestlT. Shortly after, Jackson bit into one of the candies and allegedly broke a tooth on a pecan shell embedded in the candy. She filed a complaint, asserting breach of implied warranty. How would you argue on behalf of the company? How would you argue on behalf of Jackson? In your answer, discuss both the reasonable expectation test and the foreign substance/natural substance test. [Jackson v NestlT-Beich, Inc., 589 NE2d 547 (Ill App)]
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Answer:

Refer to the case Jackson v Nestle-Beich, Inc (589 NE2d 547).
Case Issue
Trial court held for defendant by applying the natural substance test, arguing that pecans, chocolate covered or not, will have shells. Appeals court reversed the decision applying the reasonable expectation test that chocolate covered pecans should not have any remaining nut shells.
Relevant Terms, Laws, and Cases
Breach of implied warranty - for food there is an implied warranty that the food should at least follow some standards needed for consumption, such as not having foreign object. For example, a needle found in a bowl of soup would be breach of implied warranty. However, it is debatable when a found object is naturally occurring to the ingredient such as finding egg shells in an omelet.
Opinion
Higher court affirmed the decision.
The court argued under strict liability that defendant could have placed a warning in their food products stating that shells may have remained in the food. Since they failed to state that it caused potential danger to consumers who unknowlingly eats the food believing it to be free of shells.

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Zogarts manufactured and sold a practice device for beginning golfers. According to statements on the package, the device was completely safe, and a player could never be struck by the device's golf ball. Hauter was hit by the ball while using the device. He sued Zogarts, which denied liability on the ground that the statements were merely matters of opinion, so liability could not be based on them. Was this a valid defense? [Hauter v Zogarts, 534 P2d 377 (Cal)]
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Refer to the case Hauter v Zogarts (534 P2d 377).
Case Issue
The issue is whether a statement, the ball will not strike player, made on a packaging of a product made by defendant is an express warranty for the product.
Trial court granted judgment not withstanding verdict in favor of plaintiff. Defendant appealed.
Relevant Terms, Laws, and Cases
Express warranty - are terms sellers made about product that urges buyers to buy it. For example, claiming that a TV is HD is an express warranty that the TV is HD. However, opinions are not express warranties, e.g. claiming the product is amazing would be an opinion.
Opinion
The higher court agreed that there was a breach of express warranty. The court found that it was clear that the statement made by the defendant was not merely an opinion but statement of fact. Furthermore, the court agreed with trial court argument that the defendant can be held liable under breach of implied warranty as well; since the product was intended for beginner golfers but was found to be unsafe for use.

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Brian Felley went to the home of Tom and Cheryl Singleton on June 8 to look at a used car that the Singletons had advertised for sale in the local paper. The car was a 1991 Ford with 126,000 miles on it. Following a test drive and the Singletons' representation that the car was "in good mechanical condition," Felley purchased the car for $5,800. By June 18, 1997, Felley had the car in the shop and had paid $942.76 to have its clutch fixed. By July 9, 1997, Felley also had paid $971.18 for a new brake job. By September 16, 1997, Felley had paid another $429.09 for further brake work. Felley brought suit for breach of express warranty. An auto expert testified that the clutch and brakes were defective when Felley bought the car. Was an express warranty breached? Why or why not? [Felley v Singleton, 705 NE2d 930 (Ill App)]
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Answer:

Refer to the case Felley v Singleton (705 NE2d 930).
Case Issue
The issue is whether a statement that a car is in good mechanical condition is an express warranty. The plaintiff (buyer ) is suing defendant (seller) for defect in the purchased vehicle's brakes.
Trial court held for plaintiff. Defendant appealed the decision.
Relevant Terms, Laws, and Cases
Express warranty - are terms sellers made about product that urges buyers to buy it.
For example, claiming that a TV is HD is an express warranty that the TV has HD quality. However, opinions such as "This is a great product" is not an express warranty.
Opinion
Higher court affirmed the decision.
The court found that it was an expressed warranty because when the plaintiff specifically asked about the car's condition they relied on this fact to make their purchase. Furthermore , plaintiff was unaware of defective brakes on the car. Hence, the plaintiffs have shown that there was a breach of warranty.

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Parrino purchased from Dave's Professional Wheelchair Service a wheelchair manufactured by 21st Century Scientific, Inc. The sales brochure from 21st Century Scientific stated that the wheelchair would "serve [the buyer] well for many years to come." Parrino had problems with the wheelchair within a few years and filed suit against Dave's and 21st Century for breach of express warranty. Both defended on the grounds that the statement on years of service was puffery, not an express warranty. Are they right? [Parrino v Sperling, 648 NYS2d 702]
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Advent purchased ink from Borden. On the labels of the ink drums delivered to Advent, Borden had imprinted in one-sixteenth-inch type in all caps: SELLER MAKES NO WARRANTY, EXPRESS OR IMPLIED, CONCERNING THE PRODUCT OR THE MERCHANTABILITY OR FITNESS THEREOF FOR ANY PURPOSE CONCERNING THE ACCURACY OF ANY INFORMATION PROVIDED BY BORDEN. This language was printed beneath the following: BORDEN PRINTING INKS-"ZERO DEFECTS: THAT'S OUR GOAL" All of the printing was in boldface type. The disclaimer was also printed on the sales invoice and on the reverse side of the Borden form, but there was nothing on the front to call attention to the critical nature of the terms on the back because there were simply capital letters reading "SEE REVERSE SIDE." All of the terms on the back were in boldface and although the disclaimer was the first of 19 paragraphs, nothing distinguished it from the other 18 paragraphs of detailed contract terms. Advent said that Borden failed to age the black ink that it purchased with the result that the ink separated in Advent's printing machines. Advent refused to pay for the ink and wrote to Borden explaining that it would not tender payment because the ink was defective and demanding that Borden reimburse it for its lost profits from the downtime of printing machines. The trial court held that Borden had disclaimed any and all warranties on the ink and Advent appealed. What would you decide about the disclaimer and why? [Borden, Inc. v Advent Ink Co., 701 A2d 255 (Pa Sup)]
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James Jelinek purchased Hytest BMR Sorghum Sudan grass seed, which was produced and marketed by Land O'Lakes. Land O'Lakes warranted the seed to be free from defects and expressly warranted that by using normal farming practices and proper maintenance, Mr. Jelinek would obtain yields of 4 1/2 tons per acre. The seed resulted in reduced yields and an inferior quality crop. As a result, Mr. Jelinek was not able to sell his crop and had significant economic losses. Mr. Jelinek filed suit for breach of express warranty. Is the promise of a crop yield an express warranty? Explain your answer. [ Jelinek v. Land O ' Lakes, Inc. , 797 N.W.2d 289 (Neb. App.)]
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Maria Gonzalez lived in a rental unit with her sons in Queens, New York. The hot water supplied to their apartment was heated by a Morflo water heater, which had a temperature control device on its exterior manufactured by Robertshaw and sold to Morflo. Maria Garcia, the owner of the Gonzalezes' apartment, had purchased and installed the water heater. The Morflo heater was located in the basement of the apartment house, which was locked and inaccessible to tenants. Extensive warnings were on the water heater itself and in the manual given to Garcia at the time of her purchase. The warning on the Robertshaw temperature device read: "CAUTION: Hotter water increases the risk of scald injury." The heater itself contained a picture of hot water coming from a faucet with the word "DANGER" printed above it. In addition, the water heater had a statement on it: "Water temperature over 120 degrees Fahrenheit can cause severe burns instantly or death from scalds. Children, disabled, and elderly are at highest risk of being scalded. Feel water before bathing or showering. Temperature limiting valves are available, see manual." In the Morflo manual, the following warning appeared: DANGER! The thermostat is adjusted to its lowest temperature position when shipped from the factory. Adjusting the thermostat past the 120 degree Fahrenheit bar on the temperature dial will increase the risk of scald injury. The normal position is approximately 120 degrees Fahrenheit. DANGER: WARNING: Hot water can produce first degree burns in 3 seconds at 140 degrees Fahrenheit (60 degrees Celsius), in 20 seconds at 130 degrees Fahrenheit (54 degrees Celsius), in 8 minutes at 120 degrees Fahrenheit (49 degrees Celsius). On October 1, 1992, 15-month-old Angel Gonzalez was being bathed by his 15-year-old brother, Daniel. When the telephone rang, Daniel left Angel alone in the bathtub. No one else was at home with the boys, and Daniel left the water running. Angel was scalded by the water that came from the tap. Angel and his mother brought suit against Morflo and Robertshaw, alleging defects in the design of the water heater and the failure to warn. Should they recover? [Gonzalez v Morflo Industries, Inc., 931 F Supp 159 (EDNY)]
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Oil Gas, Inc., is a company that manufactures gas compressors. Berge Helene owns a large barge that it leases to oil companies for purposes of storing and producing petroleum offshore. GE Oil Gas sold Berge Helene gas compressors that were to be used on the barge. Berge Helene representatives asked GE representatives, as they were negotiating the contract for the compressors, whether the compressors could withstand the movement and vibration that would occur on the front of the barge once it was out in the ocean. GE's representatives assured those from Berge Helene that the compressors were self-stabilizing. Once out in the ocean, the gas compressors on the hull exploded once the vibrations began. Berge Helene brought suit against GE for the resulting crew injuries and damage to the barge. Could Berge Helene recover and, if so, what theory of product liability would apply? [ Berge Helene Ltd. v. GE Oil Gas, Inc. , 830 F. Supp. 2d 235 (S.D. Tex.)]
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Avery purchased a refrigerator from a retail store. The written contract stated that the refrigerator was sold "as is" and that the warranty of merchantability and all warranties of fitness were excluded. This was stated in large capital letters printed just above the line on which Avery signed her name. The refrigerator worked properly for a few weeks and then stopped. The store refused to do anything about it because of the exclusion of the warranties made by the contract. Avery claimed that this exclusion was not binding because it was unconscionable. Was Avery correct? [Avery v Aladdin Products Div., Nat'l Service Industries, Inc., 196 SE2d 357 (Ga App)]
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Brianna Kriefall, a child, died after she ate meat at a Sizzler restaurant that was later found to contain E. coli. Her family brought suit against Sizzler USA to recover for the loss of their daughter. Is Sizzler liable for the death? Explain your answer. What would be the liability of Sizzler's meat supplier in the case? [ Estate of Kriefall v. Sizzler USA Franchise, Inc. , 801 N.W.2d 781 (Wis. App.)]
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Webster ordered a bowl of fish chowder at the Blue Ship Tea Room. She was injured by a fish bone in the chowder, and she sued the tea room for breach of the implied warranty of merchantability. The evidence at trial showed that when chowder is made, the entire boned fish is cooked. Should she recover? [Webster v Blue Ship Tea Room, 198 NE2d 309]
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Drehman Paving Flooring Co. installed a brick floor at Cumberland Farms that its salesman promised would be "just like" another floor Cumberland had installed several years earlier. The bricks in the new floor came loose because Drehman had failed to install expansion joints. Expansion joints were not included in the second floor contract but were part of the first. Can Cumberland recover? Under what theory? [Cumberland Farms, Inc. v Drehman Paving Flooring Co., 520 NE2d 1321 (Mass Ct App)]
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July 27, 2000, Sheldorado Aluminum Products, Inc., installed an aluminum awning on the back of Marie Villette's home for use as a carport. On January 11, 2001, the awning collapsed on top of Ms. Villette's new Mercedes automobile. Ms. Villette brought suit against Sheldorado seeking recovery of the $3,000 she had paid to them for the awning. There was no formal written contract between the parties; the only writing was a one-page order/bill designated a "contract," dated July 11, 2000, and signed by Ms. Villette and apparently by Jack Finklestein, Sheldorado's salesman. No advertising or promotional material was presented by either party. Ms. Villette testified to no express warranty or representation on the transaction, and none appears in the writing. Sheldorado acknowledges that no instructions or warnings were given to Ms. Villette as to care, maintenance, or use of the awning. When the awning collapsed, Sheldorado took the position that the cause was an accumulation of snow and high winds and that it bore no responsibility for the loss. Its only response to the incident was to refer Ms. Villette to the insurer on their homeowner's policy. Does Ms. Villette have any rights that would allow her to collect damages? Apply the UCC to answer this question. Villette v. Sheldorado Aluminum Products, Inc., 2001 WL 881055 (NY Supp), 45 UCC Rep Serv. 2d 470 (NY Civ Ct).
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Andy's Sales (owned by Andy Adams) sold a well-built trampoline to Carl and Shirley Wickers. The Wickerses later sold the trampoline to Herbert Bryant. While using the trampoline, Herbert's 14-year-old nephew, Rex, sustained injuries that left him a quadriplegic. Rex's guardian filed suit for breach of express warranty and merchantability. The sales brochure for the round trampoline described it as "safe" because it had a "uniform bounce" and "natural tendency to work the jumper toward the center." The Wickerses had purchased an oval-shaped trampoline. Discuss Rex's ability to recover. Is privity an issue? [Bryant v Adams, 448 SE2d 832 (NC App)]
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After watching a male horse owned by Terry and Manita Darby perform at a horse show, Ashley Sheffield contacted the Darbys about buying him. The Darbys assured her that the horse had no problems and would make a good show horse for use in competition. In the presence of and in consultation with her father (who raised horses for a business), Sheffield rode the horse and decided to purchase him for $8,500. Within three weeks, Sheffield and her trainer discerned that the horse was lame. Sheffield sued the Darbys for fraud and for breach of express and implied warranties, and the court entered summary judgment in favor of the Darbys on all claims. Sheffield appealed. Was the court correct in granting summary judgment? Was there a breach of an express warranty? [Sheffield v Darby, 535 SE2d 776 (Ga App)]
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