Chapter 7: Business Torts and Product Liability

Answers to Select Case Questions

ETHOD OF ECONOMICS 2. The court held that the claims were sufficient to go forward on a claim of fraud. Their claim is that the guru made false statements that they relied upon to their detriment. The guru knew that the statements he made were false and induced others to rely on his statement by giving him money, working for low wages, and changing their life styles.

4. The court upheld a restraining order against Azar from contacting Lehigh customers, directly or indirectly. This was the tort of interference with an advanta-geous business relationship. This tort need not be based upon invasion of a relationship based on an enforceable contract that is subject to breach; nor is proof of fraud required. This case did not involve legitimate vigorous competition, but malicious interference with a favorable business relationship.

6. In several cases in different states, handgun producers have been held liable for injuries suffered by victims of crimes in which handguns were used. The producer was liable for selling a product they knew is often used in committing crimes, so negligence has been found. These cases are not common. The handgun retailer is usually not liable, unless they did not follow proper procedures, such as selling a gun to an underage person or otherwise violating federal or state law in a sale. Most court rule the other way. In a 1995 case, First Commercial Trust v. Locrin Engineering, the supreme court of Arkansas held there was no common law liability for manufacturers when firearms are used in murders and other crimes.

8. The lighter was not unreasonably dangerous under the Illinois consumer contemplation test, which is viewed from the vantage of an ordinary consumer. The lighter is obviously dangerous, but not unreasonably dangerous; so the risk-utility test does not apply. The warning on the lighter "KEEP OUT OF REACH OF CHILDREN" is sufficient. No liability.