Continuity mistake: When Tony escapes and crashes in the desert, he is then shown walking and holding his arm, then in the next shot he is holding the opposite arm, but when the plane passes over him it's back to the original arm. (00:41:00)
Continuity mistake: When Pepper is watching the television program about Stark Industries' stock troubles, after Tony's press conference, notice she has a wireless headset in her left ear. When Tony calls her down to the lab, the camera flashes back to Pepper and the ear piece is gone. (00:48:50)
Continuity mistake: After flight testing the suit the first time, Tony crashes through his house, landing on and partly crushing his blue Cobra roadster, as building debris litters the ground around and on the car. Later, when Pepper finds Tony being fitted by robotic arms, we see the same garage area in the background and the Cobra and debris have been cleared away, replaced by the 1932 Ford hot rod. Still later, when Tony suits up for the final battle, the damaged Cobra and all the debris is back in place in time for him to shove the car out of the way. Note the same location in all three shots is below the second set of windows on the wall. (01:04:30 - 01:42:15)
Continuity mistake: When Stark is paralysed his fringe (hair bangs) keeps changing style all the time.
Continuity mistake: When we first see Tony Stark arrive at the benefit, his car doesn't have a front plate. When we actually see him pull up to the entrance though, his personalised "Stark" plate has appeared.
Continuity mistake: When Tony Stark is at home he's wearing a black tank top while working on the suit, and there is a bad cover-up of one of his tattoos. It almost looks like a band-aid is over it. It goes away and comes back.
Continuity mistake: When Stark fires the two rockets to Raza, before Yinsen dies, there's two green rockets standing next to him that change position in less than a second.
Continuity mistake: When Tony is paralysed on the couch, in one shot his head is facing to the left. However, in the very next shot he is facing forward and slightly slouching back a bit. There wasn't enough time for him to move into the other position, even if he wasn't paralysed.
Continuity mistake: After Stark is paralysed and slightly recovers, he goes to get his energy. Right then the blood around his left ear has vanished. Being seconds away from dying, the last thing he would think of is taking a shower.
Continuity mistake: Just after Pepper replaces Tony's chest piece, she clenches her hands, complaining about how disgusting the "pus" is. When the shot changes, she closes her hand again.
Continuity mistake: In the montage of Stark designing the Mark II suit on his computer, he picks up a coffee mug to his left and absent-mindedly drinks it, then gets a not-good expression as the liquid was presumably not what he was expecting. A second earlier, the coffee mug had been shown completely upside-down on the desk.
Continuity mistake: When the pilot ejects as he is falling, up close he is trying to pull the eject handle, but when it zooms out his arms are out to the side.
Continuity mistake: When Pepper is changing out Stark's arc reactor chest piece, in one shot she pushes the device in, then in the next shot she pushes it in again.
Continuity mistake: In the scene where Tony Stark is in the cave building his mini arc reactor He tells the Dr. what it is, then the scene cuts to Tony laying down the papers for the Mark 1 and you can see the glow of the arc reactor in his chest. Immediately after that the scene cuts to the terrorists tv monitor and seeing the Dr. putting in the new arc reactor.
Continuity mistake: When Iron Man is shot down by the tank, he creates a crater in the ground from the impact. He proceeds to climb out of the crater towards the tank with the crater behind him. He shoots the tank then walks away from the explosion without needing to avoid the hole he just made.
Chosen answer: It was basically a prototype made from, to quote Stane, "a box of scraps." It was not strong enough to last, especially when it came to powering Tony's high tech armor armor upgrades.
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