Section 15.2
Product Liability
Section 15.2 Product Liability
What You’ll 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 You’ll 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 It’s 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
Consumer Protection and Product Liability
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
Consumer Protection and Product Liability
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
Consumer Protection and Product Liability
Section 15.2 Product Liability
Pre-Learning Question
What do you think product liability is?
Understanding Business and Personal Law
Consumer Protection and Product Liability
Section 15.2 Product Liability
What Is Product Liability?
Under product liability law, someone
who is injured from a product’s unsafe
or defective condition may recover
damages. Manufacturers, sellers, and
suppliers of goods can all be held
responsible.
Understanding Business and Personal Law
Consumer Protection and Product Liability
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.
Understanding Business and Personal Law
Consumer Protection and Product Liability
Section 15.2 Product Liability
Strict Liability
Strict liability makes manufacturers
or suppliers responsible for selling
goods that are unreasonably
dangerous.
Understanding Business and Personal Law
Consumer Protection and Product Liability
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:
Understanding Business and Personal Law
Consumer Protection and Product Liability
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.
Understanding Business and Personal Law
Consumer Protection and Product Liability
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.
Understanding Business and Personal Law
Consumer Protection and Product Liability
Section 15.2 Product Liability
Strict Liability
The consumer suffered physical
harm or property damage as a
result of using the product.
Understanding Business and Personal Law
Consumer Protection and Product Liability
Section 15.2 Product Liability
Pre-Learning Question
What are some federal and state
consumer protection laws?
Understanding Business and Personal Law
Consumer Protection and Product Liability
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.
Understanding Business and Personal Law
Consumer Protection and Product Liability
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
Understanding Business and Personal Law
Consumer Protection and Product Liability
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.
Understanding Business and Personal Law
Consumer Protection and Product Liability
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
Understanding Business and Personal Law
Consumer Protection and Product Liability
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.
Understanding Business and Personal Law
Consumer Protection and Product Liability
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.
Understanding Business and Personal Law
Consumer Protection and Product Liability
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.
Understanding Business and Personal Law
Consumer Protection and Product Liability
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.
Understanding Business and Personal Law
Consumer Protection and Product Liability
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
Understanding Business and Personal Law
Consumer Protection and Product Liability
15.2 15.2 Product Liability
Section
Warning Labels
Understanding Business and Personal Law
Consumer Protection and Product Liability
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.
Understanding Business and Personal Law
Consumer Protection and Product Liability
Section 15.2 Product Liability
ANSWER
True
Understanding Business and Personal Law
Consumer Protection and Product Liability
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.
Understanding Business and Personal Law
Consumer Protection and Product Liability
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.
Understanding Business and Personal Law
Consumer Protection and Product Liability
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.
Understanding Business and Personal Law
Consumer Protection and Product Liability
Section 15.2 Product Liability
ANSWER
False
Understanding Business and Personal Law
Consumer Protection and Product Liability
Section 15.2 Product Liability
Pre-Learning Question
Where can you go to get consumer
protection assistance?
Understanding Business and Personal Law
Consumer Protection and Product Liability
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
Consumer Protection and Product Liability
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.
Understanding Business and Personal Law
Consumer Protection and Product Liability
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.
Understanding Business and Personal Law
Consumer Protection and Product Liability
Section 15.2 Product Liability
Better Business Bureau
The BBB provides services that
include the following:
Provides information on a
business’s past dealings
Helps resolve complaints
Provides information on charitable
organizations
Understanding Business and Personal Law
Consumer Protection and Product Liability
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
Understanding Business and Personal Law
Consumer Protection and Product Liability
Section 15.2 Product Liability
True or False: Intrastate sales involve
the buying and selling of merchandise
within a state, not across state lines.
Understanding Business and Personal Law
Consumer Protection and Product Liability
Section 15.2 Product Liability
ANSWER
True
Understanding Business and Personal Law
Consumer Protection and Product Liability
Section 15.2 Product Liability
Section 15.2 Assessment
Reviewing What You Learned
1. What is the difference between
product liability and strict liability?
Understanding Business and Personal Law
Consumer Protection and Product Liability
Section 15.2 Product Liability
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.
Understanding Business and Personal Law
Consumer Protection and Product Liability
Section 15.2 Product Liability
Section 15.2 Assessment
Reviewing What You Learned
2. What is the purpose of the
Consumer Product Safety Act?
Understanding Business and Personal Law
Consumer Protection and Product Liability
Section 15.2 Product Liability
Section 15.2 Assessment
Reviewing What You Learned
Answer
Protects consumers from unreasonable
risk of injury from using consumer
products.
Understanding Business and Personal Law
Consumer Protection and Product Liability
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?
Understanding Business and Personal Law
Consumer Protection and Product Liability
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.
Understanding Business and Personal Law
Consumer Protection and Product Liability
Section 15.2 Product Liability
Section 15.2 Assessment
Reviewing What You Learned
4. Where can you find consumer
protection assistance?
Understanding Business and Personal Law
Consumer Protection and Product Liability
Section 15.2 Product Liability
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.
Understanding Business and Personal Law
Consumer Protection and Product Liability
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?
Understanding Business and Personal Law
Consumer Protection and Product Liability
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.
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
Now Olivia wonders if any other dangerous
ingredients were in the medication that she
took.
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
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.
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
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.
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
Will you continue eating the food and using
the products? Why or why not?
Understanding Business and Personal Law
Consumer Protection and Product Liability
Section 15.2 Product Liability
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.
Understanding Business and Personal Law
Consumer Protection and Product Liability
End of Section 15.2
Product Liability