Title: Product Liability
1 Product Liability
- Ill warrant him heart-whole.
- William Shakespeare, 1564-1616
2Product 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.
3Express 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.
4Implied 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.
5Implied 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.
6Liability 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.
7Liability 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.
8Liability 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.
9Requirements 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).
10Requirements 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.
11Requirements 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.
12Liability 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.
13Possible 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.
14Possible 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.