1)

A manufacturer of an electric meter that included surge protectors to prevent damage to the meter from overloads is sued exclusively for strict product liability by an electric company after the surge protectors failed and damaged the electric meters. The manufacturer defends the claim of strict product liability on the basis that the defect in the product only damaged the product itself and there were no personal injuries.

How strong is this defense by the manufacturer?

A) Strong, unless the electric company can provide a reasonable alternative design to the meter that would have mitigated the risk of the surge protectors failing.

B) Weak, because there is no indication that the electric company was aware of the product's defective surge protectors and elected to use the meters anyway.

C) Weak, because strict product liability applies to defective products even when they do not cause personal injuries or damage a company's property.

D) Strong, because strict product liability does not allow for economic loss occasioned from a defect in a product that only causes damage to the product itself.

2)

Select the statement that is true of current products liability law, rather than consumer law prior to the 20th century.

A) It assumes that most commerce is local.

B) It is an important way of ensuring consumer product safety.

C) It rests on the principle of "buyer beware."

D) It is rarely applied, as most consumer products are extremely safe.