2. In general terms, what does it mean to claim that an implicit contract arises around a transaction? How does that contract protect the consumer?
3. From the information provided, and from your own experience, what are the main terms of the implicit contract surrounding the purchase of coffee at a fast-food drive-through?
o What does the restaurant owe the consumer?
o What does the consumer owe the restaurant?
4. In order for an implicit contract to arise, the following three conditions must be met:
o Both sides must enter the contract freely.
o Both sides must be reasonably informed of the agreement’s terms.
o Both sides must be honest.
Were these three conditions met in the McDonald’s coffee case? Explain.
5. Make the case that the original offer by Liebeck—$20,000 from McDonald’s to cover the medical bills—is ethically recommendable within the structure of an implicit contract. Use the concept of animplied warranty.
6. The concept of manufacturer liability gives consumers the right to sue manufacturers for defective goods. There are three kinds of product defect:
o Design defects (errors in the product’s design)
o Manufacturing defects (errors in the production of one specific case of a generally safe product)
o Instructional defects (poor or incomplete instructions for a product’s safe use)
Which (if any) of these defects are applicable in the McDonald’s coffee case? Explain.
7. What is the concept ofstrict product liability, and how could it be applicable in this case?
8. In ethical terms, justify the original jury award to Liebeck: $160,000 in compensatory damages and $2.7 million in punitive damages (about two days of McDonalds’ coffee sales).
9. Of these three ethical structures for conceiving of the coffee-buying consumer and her protections—caveat emptor, the implicit contract, and manufacturer liability—which do you believe is best? Why?
