Chapter 7: Business Torts and product liability

Strict Liability: Implied Warranty

Manufacturer Products, Food. Implied warranty of merchantability.

Negligence in Tort

Manufacturer and reasonable care, were the dangers foreeeable and must avoid misrepresentation. All defects must be revealed.

Types of fraud

*Misstatement of an important or material fact. *Scientor or intent to defraud *person knows false statement *person justifiably relies on info *relation between parties *Proximate Cause *Damages

Product Liability

Liabiliy of producers and sellers of goods, we want companies to have incentives to ensure product safety but do not want them to pay for improper use.

Case: MacPherson vs. Buick

Buick sold cars but through dealers, buic has responsibility for product, affirmed in accident because wheel fell off

Dangerous activity

Common law rules developed about uncommon activited where utmost care is needed

Unknown Hazards

Dangers are not known and hazards are not known for many years. Claims are class action suits. Manufactures must have recalls or warnings when hazard is detected.

Strict Liability in tort

Defective products that manufacturers are liable for that causes damages, unreasonable danger

Fraud

Deliberate deception where malice, intent, knowledge, and other conditions of a persons mind may be alleged generally. Representation of false material has been made knowingly, without belief in its truth, or recklessly and careless whether it is true ir false.

Breaking of a contract by a 3rd party

Existance of a contractual relationship 3rd party knows about contract, 3rd party intentionally interferes with the contractual relationship, absence of justification for the interference, damages as result.

Case: Lightle vs. Real Estate Commission

Lightle wrote on Seeleys contract that it was back up w/o her knowing. Affirmed Comission ruling of giving Seeley compensation.

Gieseke vs. IDCA

Gieseke owned diversified water and MH owned it too after buying AH out. Gieseke was ran out of business.

Baxter vs. Ford

Glass shatters on Baxters ford, sues because glass was supposed to be shatterproof. Ford failed to provide safety of glass as advertised. breach of express warranty. Reversed and remanded.

Strict Liability: Express Warranty

Guarantee of safety of performance by model, statement, contract, or advertising

Joint and Several Liability

Most states have held plaintiffs may sue any or all manufacturers to share the liability created. Any defendants may be held liable.

Interference with prospective advantage

One part makes it difficult/impossible for another party to continue in some/all business dealings, unreasonable/improper manner.

Case: parish vs. Icon

Parish was hurt jumping on a tramp but warnings were not inadequate

Greenman vs. Yuba Power

Power tool, wood flies out of machine and sues for breaches of warranties and negligence.

Defenses in Liability

Product misuse, assumption of risk, user defense and bulk supplier doctrine, some statutory limits exist

Slater Numismatics vs. Driving Force

Slater bought rare coins. Driving Force Was set up and drove Slter out of business. reversed and remanded for slater.

Privity of Contract

a contractual relationship with the manufacturer was needed, burden on consumer.

Failure to warn

failure by manufacturer to warn of dangers in using a product

Particular torts to business:

fraud or intentional misrepresentation, interference with contractual relations, interference with prospective advantage, product liability, consumer products and negligence, strict liability, primary areas of product liability law, ultrahazardous activity

Types of tort law:

intentional, negligence, strict liability, traditionally common law

Torts in business

no such thing as a business tort, by definition, they are torts that concern business. Often big awards.