UNIVERSITY OF MISSOURI-COLUMBIA
School of Law

Products Liability


Final Examination

Mr. Fischer December 8, 2001

1:00 p.m.--3:00 p.m.

Instructions



1. This examination consists of 3 essay questions and 4 pages (pages 1 through 4). The time suggested for each question indicates its approximate weight.

2. Please use a pen, write legibly, and write on only one side of a bluebook page.

3. Each answer should be self-contained. Thus, you should not "incorporate by reference" anything from one answer to another.

Essay questions I and II are based on the following facts:

FurnaceCo manufactures forced air home furnaces. These furnaces have a fan that circulates the air through the air ducts that lead to heat registers and returns. The fan is powered by a 3/4 horsepower electric motor. The furnace is controlled by switches on a thermostat located on a wall in the living area of the home. The homeowner can set the fan to run continuously or to run only when the burner in the furnace is operating. The owner's manual that comes with the furnace recommends that the fan be set on continuous during the heating season in order to achieve maximum heating efficiency.

Motors in forced air furnaces occasionally overheat and catch fire when they are run continuously for a long period of time. This happens only if the motor is under unusual stress. This stress can be caused by poor maintenance such as improper lubrication of fan bearings, improper lubrication of the motor bearings, or prolonged use of excessively dirty furnace air filters. A warning in the manual describes this fire hazard and specifies yearly maintenance procedures necessary to avoid the hazard.

MotorCo manufactures and sells electric motors to FurnaceCo for use in their furnaces. In 1995 MotorCo developed a heat sensitive circuit breaker that eliminated the fire hazard. This device cuts off all electricity to the motor when the temperature of the motor approaches dangerous levels. The device effectively prevents all motor fires caused by overheating. It is a very sensitive device, however, and requires maintenance twice a year to function properly. Even when properly maintained, the circuit breakers have a fairly short useful life and need to be replaced every four or five years.

Since 1995 MotorCo has sold two versions of its electric motors. One version has a built in heat sensitive circuit breaker, and the other version has no circuit breaker. Since 1995 some manufacturers have used motors with heat sensitive circuit breakers and other manufacturers have continued to use motors without circuit breakers.

Essay I

[60 Minutes]

In 1996 Owner bought a FurnaceCo furnace, and had it installed in his house. The furnace was equipped with a MotorCo electric motor that did not have a heat sensitive circuit breaker. Last year the motor caught fire while being run on the continuous setting, and did considerable damage to Owner's furnace. There was no other damage. The fire started because Owner had not performed maintenance on his furnace for two years. Owner did not know that poor maintenance created a fire risk because he had not read the owner's manual.

Owner brings a strict products liability action against both FurnaceCo and MotorCo. He claims that both products are defective in design because the electric motor did not contain a heat sensitive circuit breaker. How do you think the cases will be decided?

Essay II

[20 Minutes]

In 1993 Buyer bought a FurnaceCo furnace, and had it installed in her house. The furnace was equipped with a MotorCo electric motor that did not have a heat sensitive circuit breaker because the sale occurred two years prior to the invention of the circuit breaker. Last year the motor caught fire while being run on the continuous setting, and did considerable damage to Buyer's house. There is no evidence that Buyer improperly maintained her furnace.

Buyer brings a strict products liability action against both FurnaceCo and MotorCo. She claims that both manufacturers are liable for failing to inform her in 1995 that she could have eliminated the hazard of motor fires by purchasing a replacement motor with a heat sensitive circuit breaker. Buyer would testify that she would have purchased such a motor if she had known that it was available. How do you think the cases will be decided? For purposes of this question only you may assume that after 1995 a furnace sold without a heat sensitive circuit breaker would have been defective in design.

Essay III

[40 Minutes]

LadderCo manufacturers wooden extension ladders. A batch of its ladders had rungs made of inferior wood that did not meet LadderCo's specifications. These rungs were unusually brittle, and were not of sufficient strength to reliably support a person. LadderCo disposed of this batch of ladders by selling them as "seconds" in its factory outlet store. The ladders were sold at drastically reduced prices. Large warnings in the store and on the ladders informed customers of the nature of the problem with the rungs, and that they were not usable as ladders.

Sarah bought one of the ladders to use as the top of a grape arbor that she was building in her garden. She brought the ladder home, removed the unsightly warning attached to the ladder, and put the ladder in the backyard near her garden shed. A few days later Sarah's neighbor Jim saw the ladder in the yard. Jim assumed that the ladder was structurally sound because it was obviously brand new. He attempted to ask Sarah for permission to borrow it to clean out his gutters, but he found that Sarah was not at home. He decided to borrow the ladder without permission because he and Sarah had a custom of borrowing each other's tools, and he believed that she would not object to his using the ladder for a short time. Jim took the ladder and used it to climb to his roof. A rung broke, causing Jim to fall and suffer injuries.

Discuss how courts are likely to decide this case under the various approaches that we have studied. Analyze the results in terms of whether they represent good policy.