business law chapter 7

unreasonably dangerous product

1. the product was dangerous beyond the expectation of the ordinary consumer 2. a less dangerous alternative was economically feasible for the manufacturer but the manufacture failed to produce it.

preemption

government regulations preempt claims for product liability.

commonly known dangers

if a defendant succeeds in convincing the court that the plaintiffs injury resulted from a commonly known danger the defendant will not be liable.

knowledgeable user

if a particular danger should be commonly known by particular users of the product the manufacturer need not warn these users of the danger.

product misuse

occurs when a product is used for a purpose for which it was not intended. The courts have severely limited this defense however and it is now recognized as a defense only when the particular use was not foreseeable.

strict liability- wild animals

persons who keep wild animals are strictly liable for any harm inflicted by the animals.

strict product liability and public policy

public policy rests on the three fold assumption that: 1. consumers should be protected against unsafe products 2. manufacturers and distributers should not escape liability for fault products simply because they are not in privity of contract with the ultimate user of those products 3. manufacturers and distributors can bette bear the costs associated with injuries caused by their products- because they can ultimately pas the costs on to all consumers in the form of higher prices

privity of contract

refers to the relationship that exists between the parties to a contract. privity is the reason that normally only the parties to a contract can enforce that contract. A manufacturer seller or lesser is liable for failure to exercise due care to any person who sustains an injury proximately caused by a negligently made product.

strict liability- abnormally dangerous activities

strict liability for damages proximately caused by an abnormally dangerous activity or ultra hazardous activity is one application of strict liability. i.e. if someone uses dynamite and somebody is injured they are still liable

due care must be exercised in which following areas:

1. designing the product 2.selecting the materials 3. using the appropriate production process 4. assembling and testing the product 5. placing adequate warning on the label to inform the user of dangers of which an ordinary person might not be aware 6. inspecting and testing any purchased components used in the product

the requirements for strict product liability

Depending on the jurisdiction, if these requirements are met, a manufacturer's liability to an injured party can be almost unlimited: 1. the product must be in defective condition when the defendent sells it 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 4. the plaintiff must incur physical harm to self or property by use or consumption of the product. 5. the defective condition must be the proximate cause of the injury or damage 6. the goods must not have been substantially changed from the time the product was sold to the time the injury was sustained.

market share liability

a court can hold each manufacturer responsible for a percentage of the plaintiff's damages that is equal to the percentage of its market share.

manufacturing defects

a product contains a manufacturing defect when the product departs from its intended design even though all possible care was exercised in the preparation and marketing of the product. Liability is imposed even if good quality control was conducted.

consumer expectation test

a product is unreasonably dangerous when it fails to preform in the manner that would reasonable by expected by an ordinary consumer

foreseeable misuses

a seller must warn those who purchase its product of the harm that can result from the foreseeable misuse of the product as well.

risk utility analysis

courts analyze to determine whether the risk of harm from the product as designed outweighs its utility to the user and the public.

comparative negligence (fault)

courts can consider the negligent or intentional actions of both the plaintiff and the defendant when apportioning liability and damages. A defendant may be able to limit some of its liability if it can show that the plaintiffs misuse of the product contributed to his or her injuries.

assumption of risk

defendant must show the following: 1. the plaintiff knew and appreciated the risk created by the product defect 2. the plaintiff voluntarily assumed the risk by express agreement or by words or conduct even though it was unreasonable to do so.

strict liability- product liability

liability of manufacturers and sellers for harmful or defective products. Based on two factors: 1. the manufacturer can better bear the cost of the injury because it can spread the cost throughout society by increasing the prices increasing the prices of its goods. 2. the manufacturer is making a profit from its activities and therefore should bear the cost of injury as an operating expense.

different kinds of product defects

manufacturing defects, design defects, and inadequate warnings.

tolled

the running of a prescribed period is tolled until the party suffering an injury has discovered it or should have discovered it

obvious risks

there is no duty to warn about risks that are obvious or commonly known.

product liability

those who make, sell, or lease goods can be held liable for physical harm or property damage caused by those goods to a consumer, user, or bystander.

statutes of repose

to ensure that sellers and manufacturers will not be left vulnerable to lawsuits indefinitely many states have passed statues of repose, which place outer time limits on product liability actions

product liability based on misrepresentation

when a user or consumer is injured as a result of a manufacturers or sellers fraudulent misrepresentation, the basis of liability may be the tort of fraud. misrepresentation must have been made knowingly or with reckless disregard of the facts. must be of a material fact and the seller must have intended to induce the buyers reliance on the misrepresentation.

inadequate warnings

when the foreseeable risks of harm posed by the product could have been reduced or avoided by by the provision of reasonable instructions or warnings by the seller or other distributor... and the omission of the instructions or warnings renders the product reasonably safe.

design defects

when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of reasonable alternative design by the seller. plaintiff must prove that: 1. a reasonable alternative design was available 2. the defendants failure to adopt the alternative design rendered the product not reasonably safe.