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Exam 12
30 minutes

Fact Pattern

A manufacturer makes both economy cars and luxury cars. The economy cars include basic features and are priced competitively with similar cars from other manufacturers. The luxury cars include more features, and cost approximately twice as much as the economy cars. 

The manufacturer’s luxury cars come with an advanced system called WalkSafe, which stops the car automatically if the car is about to strike a pedestrian. The manufacturer has deliberately omitted the WalkSafe system from its economy cars to keep their prices down. Adding the technology would increase the price of the economy cars by 20 percent. This would also make the cars 20 percent more expensive than other manufacturers’ competing cars, none of which incorporate similar technology. The manufacturer’s research indicates that such a price difference would reduce the sales of its economy cars so much that it would no longer be feasible to manufacture them.

A driver is driving one of the manufacturer’s economy cars along a busy street in the center of town. The driver looks away from the street for a moment and accidentally hits a pedestrian who is crossing the street. The pedestrian’s injuries permanently impair the pedestrian’s ability to stand and to walk. At the time of the accident, the pedestrian is 27 years old.

The pedestrian sues the manufacturer and the driver for personal injury. The pedestrian alleges that the driver was negligent. The pedestrian also alleges that the car’s design is defective because the design does not incorporate the WalkSafe technology. The pedestrian seeks to recover for medical expenses, pain and suffering, and diminished earning capacity.

At trial, the evidence shows that if the car had included the WalkSafe system, then the car would have stopped before it hit the pedestrian. The evidence also shows that the pedestrian has chosen not to hold a job for the past three years, because the pedestrian’s spouse makes enough money to support them both. The pedestrian has no immediate plans to return to work. Finally, the evidence shows that the pedestrian has a degree in horticulture, and last worked at a commercial greenhouse making $30,000 per year. Standing and walking are common activities in jobs within the pedestrian’s area of expertise.

The jury finds for the pedestrian against both the manufacturer and the driver, and awards the pedestrian $200,000 for medical expenses, $500,000 for pain and suffering, and $1 million for diminished earning capacity.

On appeal, the manufacturer challenges the finding that the design was defective. The driver argues that the pedestrian should not be able to recover for diminished earning capacity, because the pedestrian was not working, and had no plans to work, at the time of the injury. 


  1. Should the manufacturer be liable for a defective design? Explain.
  2. Is the driver correct that the pedestrian cannot recover for diminished earning capacity? Explain.

Question 1

Should the manufacturer be liable for a defective design? Explain.

Question 2

Is the driver correct that the pedestrian cannot recover for diminished earning capacity? Explain.

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