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Product Liability

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These include express warranties, an implied warranty of ... Customers and others can recover from any seller for losses ... Privity of contract is ... – PowerPoint PPT presentation

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Title: Product Liability


1
Product Liability
  • Ill warrant him heart-whole.
  • William Shakespeare, 1564-1616

2
Product Liability
  • Under the Uniform Commercial Code, certain
    warranties can arise in a contract for a sale of
    goods.
  • These include express warranties, an implied
    warranty of merchantability, and an implied
    warranty of fitness for a particular purpose.
  • Customers and others can recover from any seller
    for losses resulting from a breach of these
    warranties.

3
Express Warranty
  • A promise, ancillary to an underlying sales
    agreement, that is included in the written or
    oral terms of the sales agreement under which the
    promissor assures the quality, description, or
    performance of the goods.

4
Implied Warranty of Merchantability
  • A presumed promise by a merchant seller of goods
    that the goods are
  • reasonably fit for the general purpose for which
    they are sold
  • properly packaged and labeled
  • of proper quality.

5
Implied Warranty of Fitness for a particular
Purpose
  • A presumed promise by a seller of goods that the
    goods are fit for the particular purpose for
    which the buyer will use the goods.
  • The seller must know the buyers purpose and know
    that the buyer is relying on the sellers skill
    and judgement to select suitable goods.

6
Liability Based on Negligence or Misrepresentation
  • Due care must be used by manufacturer in
    designing the product, selecting materials, using
    the appropriate production process, assembling
    and testing the product, and placing adequate
    warnings on the label informing the user of
    dangers of which an ordinary person might not be
    aware.

7
Liability Based on Negligence or
MisrepresentationContinued
  • Privity of contract is not required. A
    manufacturer is liable for failure to exercise
    due care to any person who sustains an injury
    proximately caused by a negligently made
    (defective) product.

8
Liability Based on Negligence or
MisrepresentationContinued
  • Fraudulent misrepresentation of products may
    result in a tort of fraud. A manufacturer may
    also be liable for nonfraudulent (innocent)
    misrepresentation of a product to a user.

9
Requirements of Strict Product Liability
  • 1. The defendant must sell the product in a
    defective condition.
  • 2. The defendant must normally be engaged in the
    business of selling that product.
  • 3. The product must be unreasonably dangerous to
    the user or consumer because of its defective
    condition ( in most states).

10
Requirements of Strict Product LiabilityContinued
  • 4. The plaintiff must incur physical harm to self
    or property by use or consumption of the product.
    (Courts will also extend strict liability to
    include injured bystanders.)
  • 5. The defective condition must be the proximate
    cause of the injury or damage.

11
Requirements of Strict Product LiabilityContinued
  • 6. The goods must not have been substantially
    changed from the time the product was sold to the
    time the injury was sustained.

12
Liability Sharing
  • In cases in which plaintiff cannot prove which of
    many distributors of a harmful product supplied
    the particular product that causes the
    plaintiffs' injuries, some courts have applied
    industry-wide liability. All firms that
    manufactured and distributed the harmful product
    during the period in question are then held
    liable for the plaintiff's injuries in proportion
    to their respective shares of the market as
    directed by the court.

13
Possible Defenses to Product Liability
  • Assumption of the risk on the part of the user or
    consumer.
  • Misuse of the product by the user or consumer in
    a way that is unforeseeable by the manufacturer.

14
Possible Defenses to Product LiabilityContinued
  • Contributory negligence on the part of the
    user-consumer. In some states, liability may be
    disbursed between plaintiff and defendant under
    the doctrine of comparative negligence.
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