Section 15.2

1. Section 15.2

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

6. 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

7. Section Outline Consumer Protection Assistance Better Business Bureau

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

9. 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.

10. 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.

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

12. 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:

13. 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.

14. 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.

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

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

17. Federal and State Consumer Protection Laws Both the federal and state governments pass laws to protect consumers in the marketplace.

18. Federal and State Consumer Protection Laws Two federal laws are the: • Consumer Product Safety Act • Food, Drug, and Cosmetic Act

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

20. Consumer Product Safety Act Defects in products are divided into three categories: • Manufacturing defects • Poor design • Inadequate instructions and warnings about the safe use of the product

21. 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.

22. 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.

23. 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.

24. Food, Drug, and Cosmetic Act A food or drug is misbranded if its labeling or packaging is false or misleading.

25. 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

26. 15.2 Warning Labels

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

28. ANSWER True

29. 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.

30. 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.

31. 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. ANSWER False

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

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

35. 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.

36. 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.

37. 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

38. 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

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

40. ANSWER True

41. Section 15.2Assessment Reviewing What You Learned • What is the difference between product liability and strict liability?

42. Section 15.2Assessment 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.

43. Section 15.2Assessment Reviewing What You Learned • What is the purpose of the Consumer Product Safety Act?

44. Section 15.2Assessment Reviewing What You Learned Answer Protects consumers from unreasonable risk of injury from using consumer products.

45. Section 15.2Assessment Reviewing What You Learned • What prohibitions are contained in the Food, Drug, and Cosmetic Act?

46. Section 15.2Assessment Reviewing What You Learned Answer It prohibits the manufacture and shipment of faulty products in interstate commerce.

47. Section 15.2Assessment Reviewing What You Learned • Where can you find consumer protection assistance?

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

49. Section 15.2Assessment Critical Thinking Activity Consumer Protection Why do you think so many consumer protection laws are necessary?

50. Section 15.2Assessment 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.