WARRANTIES AND PRODUCTS LIABILITY

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WARRANTIES AND PRODUCTS LIABILITY
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WARRANTIES under the UCC

• An assurance from seller that goods meet certain
  standards
• May be Express or Implied
• May relate to ownership or quality
• Part of the sales contract

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WARRANTIES OF QUALITY

• Express Warranties May include
• all affirmations of fact or promises made about
  the goods
• description of goods
• model or sample of goods

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Warranty must have been part of the Basis of
Bargain
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Plaintiff must prove

• Seller made an express warranty
• The express warranty was breached
• The breach caused injury to plaintiff

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Implied Warranties

• Merchantability fit for the ordinary purpose for
  which the product was intended
• Must prove
• Merchant sold product
• Product was not merchantable at the time of sale
• Plaintiff was injured by the product
• Defect was the cause of the injury

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Implied Warranties

• Fitness for a Particular Purpose
• Must prove
• B has a special need
• S has reason to know of Bs particular purpose
• S makes statement that goods will the serve this
  purpose
• B relies on Ss skill judgment to purchase

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Comment 2, 2-315

• A "particular purpose" differs from the "ordinary
  purpose" for which the goods are used in that it
  envisages a specific use by the buyer which is
  peculiar to the nature of his business whereas
  the ordinary purposes for which goods are used
  are those envisaged in the concept of
  merchantability and go to uses which are
  customarily made of the goods in question. For
  example, shoes are generally used for the purpose
  of walking upon ordinary ground, but a seller may
  know that a particular pair was selected to be
  used for climbing mountains.

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Implied Warranty could also arise from

• Course of dealing
• Or
• Usage of trade

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Inconsistent warranties Priorities

• Fitness for a particular purpose
• Express warranty
• Custom or usage of trade
• Merchantability

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Disclaimers are implied by

• Exclusionary language
• Inspection of goods
• Condition is consistent with course of dealing or
  trade usage

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LIABILITY TO THIRD PARTIES

• Common Law Privity of contract
• UCC alternatives-who can sue?
• Buyer, family, guests in home,
• Natural persons reasonably expected to use
  (personal injury only)
• Any person (including corporation) who would
  reasonably be expected to use (personal injury
  and property damage)

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TORTS ACTIONS USED IN PRODUCTS LIABILITY CASES

• Negligence
• Strict Liability

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NEGLIGENCE

• Elements
• Duty to use reasonable care
• Breach of duty
• Injury or loss
• Proximate cause
• Defenses
• Assumption of risk
• Contributory negligence
• Comparative negligence

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STRICT LIABILITY 402A of the Restatement of
Torts 2d

• Elements
• Defective product
• Unreasonably dangerous
• Defective at time of sale
• Condition is substantially unchanged
• Seller is in the business of selling the product
• Injury or loss
• Proximate cause
• Defenses
• Assumption of risk
• (Some states) comparative negligence

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WEBB V. ZERN

• Webb purchased a quarter-keg of beer from
  distributor, Zern.
• That same day his brother tapped the keg about
  a gallon of beer was drawn from it.
• Later that evening when Webb entered the room,
  the keg exploded, severely injuring him.
• Which tort actions?

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WEBB V. ZERN- Add to the facts

• Assume the manufacturer of the keg is out of
  business.
• This is an action against the distributor.
• Assume the keg was manufactured in a defective
  manner.
• Assume this was not the distributors fault
• He handled the keg in a proper manner
• He could not have prevented this.
• Latent defect-inspection would not have revealed.
• Which tort actions?

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WHAT MAKES A PRODUCT DEFECTIVE?

• A manufacturing defect
• A design defect
• Defects caused by inadequate warnings or
  instructions

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WARNINGS, LABELS AND INSTRUCTIONS

• Courts have held that a product is defective if
  adequate warnings are not provided with the
  product upon sale.
• This extends to all written materials connected
  with the product including instructions for use
  and maintenance.

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There is a clear duty to warn of a danger in that
product if

• 1. The product is dangerous
• 2. This fact is or should be known to the
  manufacturer or seller
• 3. The danger is not one which is obvious or
  known, or readily discoverable by the user and is
  not one which arises only because the product is
  put to some unforeseeable unexpected use

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PRODUCTS LIABILITY PROBLEM

• Waldo purchased a toaster from Acme Appliances.
  It was manufactured by Testy Toaster Co. When
  Waldo used the toaster, it caught fire, causing
  injury damage. From whom can Waldo recover in
  a negligence action? A strict liability action? A
  breach of warranty action in each of the
  following independent scenarios?
• Assume the toaster was manufactured in a
  defective manner, and that Acme carefully
  inspected the toaster, handled it properly, and
  did nothing to alter its condition.

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• Assume that the toaster was manufactured
  properly, but Acme made adjustments to it.
• Assume the toaster was manufactured properly, and
  Acme made no adjustments to it, but Waldo
  adjusted it so that it would get hotter.
• You think this is Waldos fault, but is there
  still an argument he can make?