Chapter 10 Strict Liability and Product Liability

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Chapter 10Strict Liability and Product
Liability
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Chapter Objectives

• 1. Explain what is meant by strict liability.
• 2. Describe the types of warranties that may
  arise in a sales or lease transaction.
• 3. Discuss how negligence and misrepresentation
  can provide a basis for a product liability
  action.
• 4. List the requirements for an action in strict
  liability.
• 5. Summarize the defenses that can be raised
  against product liability claims.

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Product Liability

• The legal liability of manufacturers, sellers,
  and lessors of goods to consumers, users, and
  bystanders for injuries or damages that are
  caused by the goods.
• Product liability claims are most often based on
• Warranty Law
• Negligence
• Misrepresentation
• Strict Liability

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Warranty Law

• Under the Uniform Commercial Code, certain
  warranties can arise in a contract for sale of
  goods.
• Consumers and others can recover from any seller
  for losses resulting from a breach of
• Express warranties those made by oral or written
  representations concerning the goods
• Implied warranties

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Implied Warranties

• Warranty of Merchantability
• A merchant warrants goods are reasonably fit for
  the ordinary purposes for which such goods are
  used.
• Applies only to merchants!

• Warranty of Fitness for a Particular Purpose
• Arises when any seller knows of the particular
  purpose for which a buyer will use the goods and
  knows the buyer is relying on the seller to
  select suitable goods.

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Negligence

• In order to prevent claims of negligence, due
  care must be used by the manufacturer in
• Designing the product
• Selecting materials
• Using the appropriate production process
• Assembling and testing the product
• Placing adequate warnings on the label or product

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Sometimes, Puffery Becomes the Basis of the
Bargain

• Michael and Carla Weng bought a used car that the
  salesperson claimed was in good condition, was
  a good reliable car, was mechanically sound,
  and had no problems. The Wengs believed his
  words constituted an expressed warranty, so when
  the car gave them trouble, the Wengs sued the
  dealer for breach of warranty. At trial, the
  Wengs lost because the statements were mere
  puffery. However, on appeal they won because the
  statements were part of the basis of the
  bargain.
• In reading the courts words, is there really a
  clear line between language considered to be mere
  puffing and language considered to create an
  express warranty?

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Privity of Contract

• 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.

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Misrepresentation

• Fraudulent misrepresentation of a product may
  result in product liability based on the tort of
  fraud.
• Examples include
• Intentional mislabeling of packaged cosmetics
• Intentional concealment of a products defects

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Strict Liability

• Under the doctrine of strict liability, people
  may be liable for the results of their acts
  regardless of their intentions or their exercise
  of reasonable care.
• If a child is injured by a toy, should the
  manufacturer be held liable regardless of the
  circumstances?

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MacPherson v. Buick Motor Co. (1916)

• Donald MacPherson was thrown from a Buick
  automobile after one of its wheels collapsed. He
  suffered injuries and brought suit against Buick
  Motor Co. The court held that Buick had a duty to
  inspect the wheels, even though it didnt
  manufacture them, and held them responsible for
  the injury.
• What doctrine (just discussed) did Buick try to
  argue in its defense?
• To what extent, if any, have technological
  developments contributed to the courts placing
  less emphasis on the doctrine of caveat emptor
  (let the buyer beware) and more emphasis on
  caveat venditor (let the seller beware)?

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Requirements of Strict Product LiabilitySummarize
d
The defendant must sell the product in a
defective condition.
The defendant must normally be engaged in the
business of selling that product.
The product must be unreasonably dangerous to the
user or consumer because of its defective
condition (in most states). A court may consider
a product so defective as to be unreasonably
dangerous if either (a) the product was dangerous
beyond the expectation of the ordinary consumer
or (b) a less dangerous alternative was
economically feasible for the manufacturer, but
the manufacturer failed to produce it.
The plaintiff must incur physical harm to self or
property by use or consumption of the product.
The defective condition must be the proximate
cause of the injury or damage.
The goods must not have been substantially
changed from the time the product was sold to the
time the injury was sustained.
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Case 10.1 Greenman v. Yuba Power Products, Inc.

• When Greenman was injured by a defect in the
  design of a Shopsmith woodworking tool, he sued
  claiming breach of warranty and negligence. The
  court instead held the manufacturer strictly
  liable.
• What rationale did the court use to support its
  decision?
• What UCC rule did the manufacturer refer to when
  it argued that the plaintiff had waited too
  long to give notice of the breach of warranty?
  What ethical doctrine underlies this rule?

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Section 402A of the Restatement (Second) of Torts

• 1. One who sells any product in a defective
  condition unreasonably dangerous to the user or
  consumer or to his property is subject to
  liability for physical harm thereby caused to the
  ultimate user or consumer or to his property, if
• a. the seller is engaged in the business of
  selling such a product, and
• b. it is expected to and does reach the user or
  consumer without substantial change in the
  condition in which it is sold.

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Section 402A of the Restatement (Second) of Torts

• 2. The rule stated in Subsection (1) applies
  although
• a. the seller has exercised all possible care in
  the preparation and sale of his product, and
• b. the user or consumer has not bought the
  product from or entered into any contractual
  relation with the seller.

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Market-Share Liability

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

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Product Defect and Strict Liability Claims

• Claims that a product is so defective as to be
  unreasonably dangerous generally allege that the
  product is unreasonably dangerous for one of the
  following reasons
• Because of a flaw in the manufacturing process
• Because of a design defect
• Because the manufacturer failed to warn
  adequately of harms associated with the products
  use

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Case 10.2 Rogers v. Ingersoll-Rand Co.

• In the maintenace manual that accompanies the
  milling machine made by Ingersoll-Rand, there are
  warnings that users should stay 10 feet away from
  the rear of the machine when it is operating,
  verify the alarm is working, and check the area
  for the presence of others. Terrill Wilson,
  while operating the machine, ran over Cosandra
  Rogers when the back-up alarm did not sound. She
  was maimed and filed a suit against
  Ingersoll-Rand alleging design defect. She was
  awarded 10.2 million in compensatory damages and
  6.5 million in punitive damages.
• What other safety features might a manufacturer
  use in these circumstances?

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Inadequate Warnings

• At what point does the manufacturers
  responsibility for consumer safety end and the
  consumers responsibility for his or her own
  safety begin?
• Courts generally try to balance the policy of
  protecting consumers with the policy that
  manufacturers cannot be the absolute insurers of
  the safety of all products on the market.
• Should consumers be warned that hot coffee can
  cause severe burns?

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Other Applications of Strict Liability

• Suppliers of Components
• Suppliers of component parts are strictly liable
  for defective parts which, when incorporated into
  a product, cause injuries to users.

• Bystanders
• Manufacturers and other sellers are liable for
  harms suffered by injured bystanders due to
  defective products.

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Defenses to Product Liability

• There are several defenses that manufacturers,
  sellers, or lessors can raise to avoid liability
  for harms caused by their products.

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Defenses to Product Liability

• Assumption of Risk
• The user or consumer knew of the risk of harm and
  voluntarily assumed it.
• Product Misuse
• The user or consumer misused the product in a way
  unforeseeable by the manufacturer.

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Defenses to Product Liability

• Comparative Negligence
• Liability may be distributed between plaintiff
  and defendant under the doctrine of comparative
  negligence.
• Commonly Known Dangers
• If a defendant succeeds in convincing the court
  that a plaintiffs injury resulted from a
  commonly known danger, such as the danger
  associated with using a sharp knife, the
  defendant will not be liable.

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Case 10.3 Travelers Ins. Co. v. Federal Pacific
Electric Co.

• After RCA employees switched a circuit breaker on
  without testing for short circuits (causing an
  explosive fire), RCAs insurer brought suit
  alleging that FPC was negligent in failing to
  provide adequate warnings.
• The court held there was no necessity to warn a
  customer already awarethrough common knowledge
  or learningof a specific hazard.
• What might have been the result in this case if
  the training, experience, and expertise of the
  employees dispatched to check the circuit
  breakers had been with a different, out-of-date
  technology?

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Other Defenses

• Lack of Required Elements
• A defendant can also defend against a products
  liability claim by showing that there is no basis
  for the plaintiffs claim (that the plaintiff has
  not met the requirements for an action in
  negligence or strict liability).

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For Review

• 1. How does the doctrine of strict liability
  differ from the tort doctrines discussed in
  Chapter 9?
• 2. What factors determine whether a sellers or
  lessors statement constitutes an express
  warranty or merely puffing?
• 3. Discuss whether a manufacturer can be held
  liable to any person who suffers an injury
  proximately caused by the manufacturers
  negligently made product.
• 4. What are the elements of a cause of action in
  strict product liability?
• 5. What defenses to liability can be raised in a
  product liability lawsuit?