Reference no: EM132232935

For each of the situations listed below, indicate whether strict liability or some form of a negligence rule would be preferred on efficiency grounds and explain your reasoning. In developing your answers you should consider the effects of each liability rule on both precaution and activity level, i.e., the question of who is the residual bearer of harm should be factored into your analysis.

a) A boater is killed when his craft collides with another boat. Both boats were traveling at a high rate of speed toward the same destination along opposite sides of a point extending out into the lake. The land mass made it impossible for the boaters to see each other until they were almost at the destination.

b) A person who is allergic to peanuts falls ill after eating food at a restaurant that contains peanuts. The menu did not indicate that the item in question contains peanuts.

c) A motorist on an interstate highway is injured in a multi-car pileup. At the time of the accident there was blowing and drifting snow and high wind. In addition, the roads were snow covered. The motorist had barely stopped in time to avoid five cars that had just collided in front of him when he was struck in the rear by another driver who did not see the accident in time to slow down and avoid the ensuing collision.

d) Some of the residents in a housing subdivision become ill as a result of the release of toxic fumes from a rail car that were released when the train the rail car was part of derailed near the subdivision.