Product Liability Quiz

Product Liability

• Plaintiff does not need a contract with the manufacturer to sue for negligence
• Plaintiff must prove the defendant’s conduct was the "cause in fact" and the proximate cause of the injury
• "Cause in fact" means the injury would not have occurred "but for" the defendant’s action
• A manufacturer can be liable for any intentional or reckless misrepresentations that cause injury to consumers or users of their products

Strict Product Liability

• Public policy supports strict product liability because:
  • Consumers deserve protection from unsafe products
  • Manufacturers should not escape liability for faulty products just because they lack a contract with the user
  • Manufacturers are better equipped to bear the cost of injuries caused by their products
• Most states recognize strict product liability
• Requirements:
  • The product must be defective when sold
  • The defendant must be involved in the business of selling or distributing that product
  • The product must be unreasonably dangerous due to its defect
• In most states, strict product liability only applies to personal injuries, not property damage

Crimes

• Foreign Corrupt Practices Act:
  • Prohibits U.S. businesspersons from bribing foreign officials to secure contracts
  • Prohibits bribery of foreign officials to influence their official actions for business opportunities
  • Companies must keep detailed records to ensure accurate and fair representation of their financial activities
• Bankruptcy Fraud:
  • Involves knowingly attempting to evade federal bankruptcy laws
• Insider Trading:
  • Trading publicly traded securities based on non-public information that violates a duty owed to the company
• Theft of Trade Secrets and Other Intellectual Property:
  • The Economic Espionage Act criminalizes stealing trade secrets and knowingly buying or possessing another’s trade secrets without authorization.
• Organized Crime:
  • Operates illegally by providing illegal goods and services
  • Traditionally involved with gambling, prostitution, illegal narcotics, counterfeiting, and loan sharking
  • Now also includes credit-card scams and cybercrime
• Money Laundering:
  • Involves engaging in financial transactions that conceal the source, identity, or destination of illegally gained funds through a legitimate business enterprise
• Racketeering (RICO):
  • A federal crime to:
    • Use income from racketeering activity to purchase an interest in an enterprise
    • Acquire or maintain an interest in an enterprise through racketeering activity
    • Conduct or participate in the affairs of an enterprise through racketeering activity
    • Conspire to do any of the preceding activities

Ownership and Other Interests in Real Property

• Ownership of property is an abstract concept that cannot exist without the legal system
• Ownership in real property is considered a "bundle of rights"
• Fee Simple: The most complete form of ownership; owner possesses the entire bundle of rights
• Life Estate: A person is granted ownership for their lifetime, with the property reverting to another upon death
• Leasehold Estates: Ownership of rights to occupy and use a property based on a lease agreement
• Ownership in Fee Simple Absolute:
  • Owner has the most complete aggregation of rights and privileges
  • Owner can give away or dispose of the property by deed or will
  • Ownership is potentially infinite in duration
  • Owner has exclusive possession and use rights

Joint Tenancy

• Two or more persons own an undivided interest in the property
• Upon a joint tenant's death, their interest passes to the surviving tenant(s)
• Right of Survivorship: The right of surviving joint tenants to inherit a deceased joint tenant's ownership interest
• Termination of Joint Tenancy:
  • Can terminate through sale or gift of interest by one joint tenant
  • Can terminate if an interest is levied against (seized by court order) to satisfy a tenant's judgment creditors

Tenancy by the Entirety

• Shared ownership of real property by married persons
• Neither spouse can separately transfer their interest during their lifetime without consent from the other spouse
• Terminated by divorce, death of a spouse, or mutual agreement

Community Property

• Some states allow married couples to own property as community property
• Each spouse technically owns an undivided one-half interest
• Most property acquired during the marriage is considered community property

Limitations on the Rights of Property Owners

• Property ownership isn't absolute, and all owners are subject to limitations
• Payment of property taxes is required
• Zoning laws and building permits restrict property usage
• Property can be seized to satisfy judgment creditors
• Eminent Domain:
  • The government has the right to acquire possession of real property for public use
  • Also known as the condemnation power of government or a "taking"
  • Government must pay just compensation for the land
  • Condemnation Proceedings:
    • First phase establishes the government's right to take the property
    • Second phase determines the fair value of the property
    • Government must prove that taking is for public use
    • Just Compensation: Fair value is generally equal to the market value of the property
• Inverse Condemnation:
  • Occurs when a government action affects a property owner's use and enjoyment of their property without formal condemnation proceedings
  • The owner can sue to seek "just compensation" for the diminished value of the property