1. Product Liability Section 15.2

2. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and 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)

3. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and 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)

4. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and 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.

5. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability Legal Terms product liability (p. 327) strict liability (p. 327) adulterated (p. 329) intrastate sales (p. 330)

6. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability What is Product Liability? Strict Liability Section Outline Federal and State Consumer Protection Laws Consumer Product Safety Act Food, Drug, and Cosmetic Act State and Local Laws

7. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability Consumer Protection Assistance Section Outline Better Business Bureau

8. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability Pre-Learning Question What do you think product liability is?

9. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and 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. What Is Product Liability?

10. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product 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. Strict Liability

11. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability Strict liability makes manufacturers or suppliers responsible for selling goods that are unreasonably dangerous. Strict Liability

12. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product 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: Strict Liability

13. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability The manufacturer or seller was engaged in the business of selling the product. The product was unreasonably dangerous to the user or consumer. Strict Liability

14. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product 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. Strict Liability

15. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability The consumer suffered physical harm or property damage as a result of using the product. Strict Liability

16. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability Pre-Learning Question What are some federal and state consumer protection laws?

17. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability Both the federal and state governments pass laws to protect consumers in the marketplace. Federal and State Consumer Protection Laws

18. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability Two federal laws are the: Federal and State Consumer Protection Laws Consumer Product Safety Act Food, Drug, and Cosmetic Act

19. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability This law protects you from unreasonable risk of injury while using consumer products that are sold in interstate commerce. Consumer Product Safety Act

20. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability Defects in products are divided into three categories: Consumer Product Safety Act 1.Manufacturing defects 2.Poor design 3.Inadequate instructions and warnings about the safe use of the product

21. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability 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. Food, Drug, and Cosmetic Act

22. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability A food or drug is said to be injurious if it contains any substance that may make it harmful to health. Food, Drug, and Cosmetic Act

23. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability An adulterated food or drug is one that contains any substance that will reduce its quality or strength below minimum standards. Food, Drug, and Cosmetic Act

24. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability A food or drug is misbranded if its labeling or packaging is false or misleading. Food, Drug, and Cosmetic Act

25. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability The government uses other methods to discourage the sale of goods considered harmful to the public health. They include: Food, Drug, and Cosmetic Act Unusually high taxes Labeling and packaging Outright prohibition

26. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability 15.2 Warning Labels

27. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability True or False: A food or drug is said to be injurious if it contains any substance that may make it harmful.

28. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability ANSWER True

29. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability 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. State and Local Laws

30. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability These laws apply to intrastate sales (sales within a state). Nearly all states and localities license and regulate establishments that sell food. State and Local Laws

31. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and 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.

32. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability ANSWER False

33. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability Pre-Learning Question Where can you go to get consumer protection assistance?

34. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability Many state and local governments have offices of consumer affairs to educate consumers and help protect them against fraud. Consumer Protection Assistance

35. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability 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. Consumer Protection Assistance

36. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability 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. Better Business Bureau

37. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability The BBB provides services that include the following: Better Business Bureau Provides information on a business’s past dealings Helps resolve complaints Provides information on charitable organizations

38. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability 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 Better Business Bureau

39. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability True or False: Intrastate sales involve the buying and selling of merchandise within a state, not across state lines.

40. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability ANSWER True

41. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability Reviewing What You Learned 1. 1.What is the difference between product liability and strict liability? Section 15.2 Assessment

42. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability Reviewing What You Learned 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. Section 15.2 Assessment Answer

43. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability Reviewing What You Learned 2. 2.What is the purpose of the Consumer Product Safety Act? Section 15.2 Assessment

44. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability Reviewing What You Learned Protects consumers from unreasonable risk of injury from using consumer products. Section 15.2 Assessment Answer

45. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability Reviewing What You Learned 3. 3.What prohibitions are contained in the Food, Drug, and Cosmetic Act? Section 15.2 Assessment

46. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability Reviewing What You Learned It prohibits the manufacture and shipment of faulty products in interstate commerce. Section 15.2 Assessment Answer

47. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability Reviewing What You Learned 4. 4.Where can you find consumer protection assistance? Section 15.2 Assessment

48. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability Reviewing What You Learned From state and local consumer protection agencies, such as the Consumer Product Safety Commission and the Better Business Bureau. Section 15.2 Assessment Answer

49. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and Product Liability Section 15.2 Assessment Critical Thinking Activity Consumer Protection Why do you think so many consumer protection laws are necessary?

50. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and 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.

51. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and 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.

52. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and 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.

53. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and 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.

54. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and 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.

55. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and 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?

56. Understanding Business and Personal Law Product Liability Section 15.2 Consumer Protection and 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.

57. Product Liability End of Section 15.2