Product Liability- Martin
example of disclaimer provided by the UCC
"There are no warranties which extend beyond the description on the face thereof."
other magic words provided by the UCC
"as it" and "with all faults" - but it still must be conspicuous these magic words however would inconsistent with express warranties and inconsistent with new products
UCC 2-719- Limitation of Remedies
(1) Subject to the provisions of subsections (2) and (3) of this section and of the preceding section on liquidation and limitation of damages, (a) the agreement may provide for remedies in addition to or in substitution for those provided in this Article and may limit or alter the measure of damages recoverable under this Article, as by limiting the buyer's remedies to return of the goods and repayment of the price or to repair and replacement of non-conforming goods or parts; and (b) resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive, in which case it is the sole remedy. (2) Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in this Act. (3) Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not.
MISUSE IN THREE CONTEXTS:
(1) misuse determined by the court as a matter of law - E.g. in a negligence case, court says there is no duty b/c of misuse (2) jury makes a determination that b/c a misuse was unforeseeable, that constitutes a superseding cause so there is no proximate cause - (3) misuse as an affirmative defense. - D must plead it from the answer and prove it - Cases are all over the place re: which approach is correct for misuse. - Which option a court chooses determines which party has the burden of proof - Majority (and Restatement) misuse is part of P's case in proving defectiveness ____________________________
UCC 2-715(2)(b) allows for what kind of damages?
(B) Consequential damages resulting from the seller's breach include: (1) any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise; and (2) injury to person or property proximately resulting from any breach of warranty.
three elements for pictorial warning
- "warning" or "caution" or a similar word - picture of specific hazard - the actual written wording of the warnign
exceptions to limiting remedies
- "where the remedy that was sought to be remedies failed its essential purpose" - limiting consequential damages (prima facie unconscionable)
How did court distinguish warranty COA from SL COA?
- Disclaimers not available for SL - Notice requirements still operate as a defense in warranty (compare to Greenman which said notice requirements are NOT a defense to warranty) - Different statutes of limitation
causation issue in warning defects re: allergens and labels
- If P knows of allergy, then no warning is necessary if you have the ingredients on the label (which you are required to do w/ most things). People know if they have an allergen to check for it. - If P doesn't know of his allergy, then no warning would have prevented the injury anyway.
Dorman v. Int'l Harvester Co., 120 Cal. Rptr. 516 (Cal. Ct. App. 1975).
- Lemon - in shop all the time; no personal injuries - COA: 2-314 and 2-315 - P didn't read disclaimer until after the sale - Court determined conspicuousness by asking whether the disclaimer calls attention to what is being disclaimed - Some courts have held that a disclaimer is binding whether or not it's conspicuous if buyer was aware of it at time of sale - Factors court may consider to determine conspicuousness: - Language is/is not in boldface - Inconsistencies - Misleading language - Mfr's warranty not given to buyer until after signing (compare to 2-313 where warranty can extend to statements made by seller after the actual sale) - court decides whether a claim is conspicuous
defenses to strict liability
- Misuse - Substantial post-sale alterations - Assumption of risk
Implied Assumption of the Risk - based on actions alone (not written)
- P has knowledge of the specific risk - P has to have an appreciation of the danger - Voluntary decision to encounter the risk (doesn't matter whether the decision is reasonable or unreasonable)
MAJORITY RULE re: SL for services
- Pure services - no SL - Hybrid services - SL may be appropriate in certain circumstances - Hybrid = where it's a sales/service combo transaction; the sale of a product included with a service
- Parent/successors ARE liable for post-sale marketing defects (warnings, recalls) - see Rest. 3d § 13; what are the situations where successor corporation IS liable?
- Successor corp assumes liability - Transaction is a corporate consolidation/merger - Successor is a mere continuation of the predecessor (dummy corp created) - Transfer is fraudulent - "product line exception" = if the successor corp continues to mfr the same product line as the predecessor, the successor would be strictly liable for the product.
Express Assumption of the Risk (a written release/k):
- WARRANTY: if mfr expressly disclaims the warranty, then there is no warranty - MISREPRESENTATION: you cannot disclaim fraud, but you can negate the required reliance by consent or by an express assumption of the risk - NEGLIGENCE: yes, can disclaim liability for negligence, unless it is otherwise unconscionable - SL IN TORT: cannot broadly disclaim all SL in tort (Rest. 3d § 18), but you can specifically disclaim liability for certain risks
pure Comparative fault
- awards plaintiff some damages that are reduced based on the plaintiff's degree of fault
options for warning defects
- duty to warn (if defendant exercised reasonable care to discover dangers but still did not discover them - strict liability (defective if the warning is inadequate- i.e. knowledge of risk is imputed to the D whether known or even knowable... like absolute liability - hybrid- defective because knowledge of risks is imputed to the defendant of the risk was known or knowable
exceptions to the learned treatise rule
- duty too warn for over the counter drug - under circumstance of direct, mass inoculation - birth control (the patient my receive a prescription that can be refilled without consultation with a physician for six months to one year; courts have determined that the patient needs to be warned directly about the risks associated with the birth control pills - where the drug manufacturer engages in a program of mass marketing a drug too the public, it has been suggest that the manufacturer should also provide warning directly to the patient (only on jurisdiction)
what are the three ways to prove defective condition?
- failure in the manufacturing process - an improper design - a failure to fully warn about the risks of the prooduct
federal preemption
- if the federal legislation expressly states that it is to preempt state law, then it does preempt that law - courts sometimes find preemption by implication - where the federal legislation is so broad as to appear to cover the field of issues in an area - where state law is inconsistent with federal legislation, the latter preempts the former
what do court look at when determining if a disclaimer is conspicuous
- location of the language in the document - the size of the type - the color of the type - the types of heading that introduce the disclaimer
Micallef v. Miehle Co. (N.Y. 1976)
- mfrs owe a duty to design products that do not create an unreasonable risk of harm to foreseeable users - Effectively eliminates "open and obvious" as a complete bar to P's recovery. Replaces it with the R-U test where the "open and obviousness" of the danger is just one factor to be considered by the jury, along with RAD and other R-U factor
disclaimer for implied warranty for fitness requirements
- must be inn writing - must be conspicuous
disclaimer for implied warranty of merchantability requirements
- oral or written - must use the word "merchantability" - must be conspicuous enough that a reasonable person would notice it
exceptions to the seller's no duty to disclose rule
- partial statements (where there is a partial statement, the seller has a duty to fully explain) - if the seller makes positive steps to conceal difficulties of defects with the product, the court may find that sufficient for a misrepresentation action
damages allowed for 402B
- recovery for personal injury and property damages
damages allowed for negligent misrepresentation
- recovery for personal injury and property damages - economic loss, including loss of value of the product itself
damages allowed for fraud
- recovery for personal injury and property damages - economic loss, including loss of value of the product itself - punitive damages
402B elements
- the defendant must have been in the business of selling such products - the seller may only be held liable for damages due to physical harm to the person or property of the plaintiff
Negligence elements
- the existence of a duty - the breach of that duty - injury by the plaintiff - the causal connection between the breach of duty and the injury
government contractor elements
- the government prepared and reasonably precise specification - the product met the specification - the manufacturer warned the government of any known defects in the product as designed i.e military craft
what do courts look to determine if a warning inn conspicuous?
- the location of the warning - the size of the font of the warning - the color of the ink the warning is in - words in the warning such as "WARNING" and "DANGER"
two types of modified comparative fault
- the plaintiff recovers damages, less his or her own degree of fault is less than 50% - equal or greater to form= the plaintiff's recovery is barred if it is 50% or greater. You can only recover tat 49% or less
Contributory negligence
- used to be a complete bar to recovery - failure of an injured plaintiff to act prudently, considered to be a contributory factor in the injury suffered, and sometimes reducing the amount recovered from the defendant.
402A of the restatement 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. (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- you don't need negligence (b) the user or consumer has not bought the product from or entered into any contractual relation with the seller. - you don't need privity
element of implied warranty of merchantability
1) Sale by a merchant —--- one who regularly deals with respect to the type of goods sold to the (Limitations: not isolated sales; applies only to the sale of goods) 2) Unmerchantable goods (Minimum standards of quality so that they are suitable for the ordinary purposes for which similar goods are intended to be used) 3) injury/damage to P 4) Causation 5) Notice of injury
2 ways to prove scienter
1) active concealment 2) false words (half truths)
requirements for an adequate warning
1) conspicuos 2) informs the users of the known risks and 3) informs or alerts the user of the magnitude of the risks and 4) informs the user how to safely encounter the risk
what are the three tests for to determine if a product is unreasonably dangerous?
1) consumer expectation 2) risk-utility 3) knowledgeable manufacturer
factors to determine if a manufacturer must provide a direct warning
1) dangerous condition of the product 2) purpose for which the product is used 3) the form of any warning given 4) reliability of any third party as a conduit to convey unnecessary product-related info to the ultimate user 5) magnitude/seriousness of the risk 6) burden imposed on the supplier to provide a direct warning to ultimate users
basic elements of misrepresentation
1) false representation of a material fact 2) basis of liability 3) intent to induce reliance; and 4) justifiable reliance; and 5) damages
what must plaintiff prove for causation in a failure to warn action?
1) he or she would have read the action 2) that warning would have caused a change in behavior
what must plaintiff prove for res ipsa
1) the instrumentality of the injury was in the exclusive control of the DEFENDANT 2) the type of. accident that occurred does not normally occur in the absence of negligence
elements of implied warranty of fitness for a particular purpose
1) the seller knew of had reason to know of the particular purposes purposed for which the product was being selected (it not enough for the seller to know general purposes) 2) the user relied upon the expertise oof the seller in selling the product (the buyer does not need to give total reliance but substantial reliance; however, where the buyer asks for advice, but makes the deeision based upon her own inspection, there would be no implied warranty of fitness)
Greenman SL requirements
1. Manufacturers only (not retailers) 2. Design and manufacturing defects 3. Personal injury only
three types of horizontal privity
2-318 Alt. A - any natural person who is in the family or household with the buyer or who is a guest in the buyer's home; p's not in privity restricted to personal injury remedies 2-318 Alt. B - any natural person who may reasonably be expected to use, consume, or be affected by the goods and who is injured in person by breach of the warranty; p's not in privity restricted to personal injury remedies 2-318 Alt. C - any person why may reasonably be expected to use, consume, or be affected by the goods and who is injured by breach of the warranty; no restrictions on remedies
example of manufacturer being exclusively in control of product
A can of peas that the manufacturer was responsible for cleaning, processing, and canning
Assumption of the risk
A defense against negligence that can be used when the plaintiff was aware of a danger and voluntarily assumed the risk of injury from that danger.
does a limitation of remedies have to be conspicuous?
A limitation of remedies clause does NOT have to be "conspicuous" like a warranty disclaimer (but you should make it conspicuous anyway).
McCarty v. E.J. Korvette, Inc., 347 A.2d 253 (Maryland 1975).
COA: 2-313 (express) "tire guarantee" = express warranty... but court said this was a "limitation of remedies" clause Recall from above: language that limits the remedy cannot also disclaim the warranty (b/c 2-316 and 2-719 are inconsistent with one another) Held: D's limitation of remedy clause in this K was unconscionable under 2-719(3) b/c: - Ps had personal injury - Tires were consumer goods Rule: this limit on PI damages on consumer goods = prima facie unconscionable How could D have prevailed? Don't make the warranty at all; disclaim implied warranties
Love v. Weeco (2019)
Facts: P purchased a hoverboard from D Amazon that was manufactured in China, containing a lithium-ion battery that became overheated and started a fire that burned P's house down Jurisdiction: Georgia Law Type of Defect?: Marketing- you should have told me about the propensity of these batteries to overheat COA: Negligent marketing Arguments Defendant: This defect did not go to all hoverboards Result: D had notice from other complaints... leads to foreseeability; duty to war arose; so this case gets to a jury
Greenman Facts, and COA
Facts: as machine turns/vibrates, set screw holding the wood in gets loose; wood flies out and hits P, causing injury; D = mfr and retailer COA: negligence, 2-314, and 2-313 (b/c of manual that basically said this wouldn't happen; retailer adopted it by selling the product w/ express warranty in it)
Ford Motor Co. v. Moulton, 511 S.W.2d 690 (Tenn. 1974).
Facts: new car w/ 1 year warranty; right after warranty expires there's a steering malfunction COA: 2-313, 2-314, misrepresentation, strict liability Issue: does 2-719(3) implicitly require that all warranty disclaimers must be conscionable? Held: no, 2-316 only requires that written disclaimers must be conspicuous. Rule: written disclaimers must be conspicuous but do not have to be conscionable. The unconscionability provision of 2-719(3) is only applicable to limit remedies that are otherwise available after a breach. 2-719 does not preclude a seller from properly disclaiming a warranty altogether. § NOTE: the adoption of 2-316 (w/ its specific requirements for disclaiming all types of warranties) has greatly undercut the "conscionability" precedent of Henningsen.
differences between Greenman and 402A
Greenman is only applicable to manufacturers and only applies to personal injury. 402A is applicable to ANYONE who is in the business of selling products (manufacturers and sellers) and can be applied to both person injury and property damage
does 402A apply to products that cause injury when they are intentionally dismantled due to their deterioration over time?
HELD: NO, dismantling of a product constitutes a substantial change in its condition for which the mfr is not responsible, AND dismantling of the products is not an intended (i.e. foreseeable) use
Greenman Issue and Holding
Issue: whether P had to provide notice of the breach (b/c he didn't, which means D would win on the express warranty claim) Held: NO! b/c there is no point in the notice. You cannot "cure" PI which is the purpose of the notice requirement; o notice of breach is required to bring action for breach of warranty under UCC if alleging PI (still need notice if alleging breach and there is NO PI)
1997: Rest. 3d § 2
Kept SL in tort but radically changed it - Breaks it down into three categories (manufacturing, design, and marketing) with different legal tests for each type of defect - Much closer to the actual law... but of course it's not binding - Not really followed b/c we already have 40+ years of precedent flowing out of 402A
· Belling v. Haugh's Pools, Ltd. (N.Y. 1987)
Majority Rule (probably) = no duty to warn where the danger is open and obvious and a RAD is not available
in order to use misuse, you must
Misuse = use of the product in an unforeseeable manner or for an unforeseeable purpose
can you recover in strict liability if product causes damage to itself?
No
May misrepresentation actions have remedies limited by the seller?
No unlike warranty actions
do misrepresentation claims require notice?
No unlike warranty actions
is disclaimer a defense to misrepresentation?
No unlike warranty actions
is abiding by regulation or laws enough to rebut breach of duty?
No, courts can still determine that regulation or industry standards are too low; see Playskool
are statements that appear to be opinions are sales puffing actionable for misrepresentation?
No. The false misrepresentation must have been of fact
where there is no change in the component part itself, that is merely assembled onto the final product, the D component part mfr IS OR IS NOT strictly liable UNLESS the injury is caused by a defect in the component part itself.
Not liable
UCC 2-607 requires that the party seeking to claim of breach of warranty must give [blank] within a reasonable time.
Notice
Mantickas v. Kellogg
P's COA: deceptive trade practices acts- prohibiting conduct that is likely to mislead a reasonable consumer acting reasonably under the circumstances (false advertising) Type of defect: marketing Result: P's complaint stated a COA Rationale: reasonable consumers should not be expected to look beyond misleading misrepresentations on the front of the box to discover the truth on the side of the box ...
definitions of merchantable goods
Pass w/o objection in the trade "Fair average quality of fungible goods Variation as permitted by agmt Adequately contained, packages and label (aka. No marketing defect) Conform to promises made on label
Reasons Traynor gave for strict liability
Protection for consumers (safer consumer products) Problems w/ proving CL fault (contra: Escola already did this) Spread the costs of product-related losses to mfrs (contra: this will happen anyway) Cost internalization (i.e. making the price of products reflect their true cost) (contra: so the consumer pays for it now) Avoids having multiplicity of suits for ppl seeking indemnity (recall vertical privity) (contra: w/o privity requirements this argument is specious) A form of SL already exists in K law (contra: that's a whole other area of law w/ different defenses too) Avoids having to use "legal fictions" (like privity, res ipsa) to justify allowing consumers to sue mfrs directly (contra: CL already solved this) Consumers are helpless ... the idiot consumer
What test was born in Phillips?
R-U test was born! A.k.a. here "mfr expectation test"
· McCown v. International Harvester Co. (Penn. 1975)
RULE: Contrib is not a defense to SL in tort since SL is based on the product's condition and not on the conduct (or misconduct) of the P even though P's contrib is not a defense in SL claims (McCown), contrib might still be relevant in negating the requisite causation (cause in fact).
3 different kinds of innocent misrepresentation
Rest. 2d 552(c) Sale, business or exchange—-- solely economic losses Restatement (Second) Torts Section 402-B - Public misrepresentation of a material fact Damages include: physical harm to consumer like personal injury or property damage Restatement (Third) Product Liability Section 9 - Business of selling or otherwise distributing fraudulent, innocent or negligent misrepresentation of material fact concerning product
Venezia v. Miller Brewing Co. (Massachusetts 1980)
Result: D not negligent where P is injured to his own intentional misuse that was not reasonably foreseeable by mfr
Statute of Repose
Starts from a specific, definite date on the calendar (e.g. construction K -> date of completion) Runs for longer period of time than STOL
UCC rule on consistency (UCC 2-316(1))
The UCC indicates that when words appear to limit or disclaim express warranty, the language of those terms shall be read, when possible, to be consistent. Where such language is not consistent, language tending to limit or disclaim the warranty shall be inoperative. where there is an inconsistency in the language, the express warranty still stands.
negligent misrepresentation privity
The seller has a duty to 1. non-negligently ascertain the accuracy of statements made about the product sold 2. non-negligently respond to buyer's questions about the product sold
Statute of Limitations
UCC 2-725 - 4 years! Twice as long as most STOL Ordinarily begins to run only after the COA has "accrued" (when all the elements necessary for the COA exist, whether P knows about it or not) Accrual under 2-725 happens upon tender of delivery (which is almost always before the P/buyer has any PI
vertical privity
WHO CAN SUE ocuses on the relationship between the original purchaser of the product and various other persons who may subsequently use, consume, or be injured by those goods
horizontal privity
WHO can be sued the transactional privity relationship that exists between each of the various parties up and down the entire chain of distribution each party has vertical privity with each party immediately above and below it Done away with in Henningsen case in 1960 (see below)
Henningsen v. Bloomfield Motors (1960)
Who is the P?: user/wife of purchase Who is the D?: remote manufacturer, remote seller P's COA: 2-313 and 2-314 and negligence What was exactly (legally) wrong with warranty disclaimer? - Not conspicuous, hidden, fine print - Unconscionable - Unequal bargaining position of the parties - Too harsh terms This disclaimer in this case is invalid Vertical privity no longer required; still have to have horizontal privity If you have an inconspicuous disclaimer for implied warranty of merchantability that is unconscionable This case does away with vertical privity this case did away with vertical privity between an injured P and a remote manufacturer or seller under UCC
Does a defendant manufacturer have a duty to warn about known risks?
Yes
how do samples create an express warranty?
a sample create an express warranty that the product will be consistent with the sample or model
Traynor believe there should be what kind of liability?
absolute; last sentence of case. Ct announces (prospectively) a new theory of recovery! Traynor doesn't give it a name but we come to know it as SL IN TORT
o General rule re: SL in non-sale transactions: SL applies to all parties who "[blank] participate in placing" the defective product into the stream of commerce
actively; not gratuitously like walmart providing shopping carts
what must a plaintiff do to recover a claim for economic loss?
add a claim for breach of warranty
three ways to make an express warranty
affirmation of fact; description; sale by sample
for a manufacturing defect, who can all be strictly liable?
any seller in the chain of distribution
o HELD: SL applies to all commercial lessors who?
are in the business of leasing
the warranty must be the [blank] to for a successful warranty claim
basis of the bargain; law requires that. the false statements be relied upon
cause in fact test
but-for the defendant's action... i.e. when a product fails, it's easy to show that the failure caused the injury
Misuse
can be defense
Sources of express warranties:
catalogs, brochures, specs, plans/blueprints, manuals/instructions, correspondence, oral/written representations, inspection reports, appraisals, packaging/labels, package inserts, MSDS, ads, models/samples
what is required for causation inn negligence
cause in fact and proximate cause
Puffing or fraud? In blind taste test our cola was preferred over their cola 3 to1
could be liable for fraud because you're giving out facts
liability of a bulk seller
courts have held that the seller oof such bulk can meet the duty to warn. by proving adequate warnings to the immediate buyer
restatement 3d adopts R-U test for what kind of defects?
design and marketing
what kind of loss is not recoverable in a negligence claim?
economic loss
three type of warranty claims
express warranty; implied warranty of merchantability; implied warranty of fitness for a particular purpose
while failure to disclose might keep the seller from being liable for misrepresentation, the seller might still be liable for
failure to warn
what does unreasonable dangerous refer to in strict liability?
fault
FAD, SAD, RAD
feasibly alternative design- it was technically and economically feasible to create a safer design
implied warranty of merchantability assumes that the warranty extends to what?
general purposes of uses of the product
Read and Heed Presumption
if the defendant had placed a warning on the label, it would have been read and heeded by the plaintiff
sophisticated user
if the user already knows of the risks, there is no further duty to warn. Where the court can find that the user is a "sophisticated user," the seller of the product has no further duty to warn.
three bases of liability for misrepresentation
intent (fraud), negligence, and strict liability (402B)
Sealed Container doctrine
intermediate sellers of a product may not be liable (in negligence or breach of implied warranty of merchantability) for failing to test or inspect the product if it is sold in a sealed container directly from the mfr.
2-314 only applies if the defect in the goods is what?
latent
example of a description
making statements about the size or capacity of a product
what is insufficient to inform a user of the magnitude of a risk?
merely identifying the risks; if a product may cause serious personal injury or death, then the warning needs to say that
what is insufficient to inform a user of a risk?
merely suggesting safe use will not be sufficient if there is a possibility that the user will not understand why the safe use is necessary
do most jurisdiction consider failure to warn to be a negligence action or strict liability action?
negligence action
defenses to misrepresentation
no reasonable reliance
does the seller have to duty to disclose?
no, the seller can remain silent
· Early Exceptions to Privity Requirement:
o 1. Dangerous products intended for personal bodily use or consumption o 2. Invitees on premises who were injured by defective appliance furnished by landowner o 3. Certain products with known latent dangers that were "imminently dangerous to human life or limb" - § E.g. Thomas v. Winchester
· Hauter v. Zogarts, 534 P.2d 377 (Cal. 1975).
o Cali. - 10-12 years after Greenman o Facts: golfing gizmo bought by mom to give to her son; golf ball on a string so it comes back to the player to hit again; son injured o Privity: no, but doesn't matter o COA: breach of express warranty, public misrep., SL in tort under Greenman o Result: D is strictly liable for false representation made in its marketing of the product to the public (phrase on box saying it was completely safe)
Metzgar v. Playskool Inc. (1994)
o Facts: 15m old child in crib, choked to death after swallowing cylindrical block mfrd by D o Defect: design (too small, in shape of esophagus) o COA: negligence o D: remote mfr (Playschool) AND retailer (Kmart - negligent sale) o Privity: only w/ Kmart but not required o D argued: compliance w/ all federal safety standards; risk of choking only slight o P argued: this injury was foreseeable o Trial court: MSJ for D; no duty b/c risk so slight based on history of the o 3d Cir. reversed - Risk-Utility (R-U) analysis - basically cost/benefit balancing test
· Baxter v. Ford Motor Co., 12 P.2d 409 (Wash. 1932).
o Facts: Triplex safety glass installed in Fords; got a break in car insurance premium for having this glass in your car (like tempered glass). P had a 1930 Model A w/ Triplex, rock hit w/s, glass shattered, P's eye injured o D: mfr and dealership o Type of defect: marketing (b/c of the statements about how the product will not splinter/shatter) o COA: can't really tell ... maybe negligent misrep? o D argued no privity o At trial: directed verdict for both Ds on all counts § Dealer made no warranty about the glass § Ford made the warranty but P didn't have privity (evidently MacPherson had not gotten to WA yet) o Ct created new exception to privity rule "where fairness and justice otherwise require it" § "Where a remote product mfr makes a misrepresentation about the quality of the product to the public" o 2 years later - on second appeal - court clearly indicates breach of express warranty but no fraud (??). This case is a mess! o Based on Baxter, Rest. Authors create 402B "public misrep. of material fact" § 402B is NOT an alternative to 402A! It's a valid COA (potentially) but may have to convince the court it's a separate COA from 402A. Assert both.
· Mesman v. Crane Pro Servs. a Div. of Konecranes, Inc., 409 F.3d. 846 (7th Cir. 2005).
o Facts: crane rebuilt and cab was left in tact even though crane can now be operated from outside the old cab. Crane kept moving after operator stopped it b/c of deceleration feature, and someone was injured. Note that crane had deceleration feature to reduce wear and tear. o Defect: design o COA: negligence o Became a new product after rebuild, so we treat the rebuilder as a mfr o Privity? No, but not required o Legal test used: Hand formula (another variation of R-U test) B < P x L o Result: judge found for D b/c of P's garbled and incorrect version of the test o Employee can't sue employer b/c worker's comp - he gives up his right to sue the employer for negligence
St. Joseph Hosp. v. Corbetta Constr. Co., 316 N.E.2d 51 (Ill. App. 1974).
o Facts: hospital K'd w/ D to put their formica countertops in P's hospital; no personal injuries—financial only b/c had to rip out all this installed formica; P specifically asked sales rep about fire rating. Rep said "at this time our product doesn't have a flame spread rating" - The whole truth: it HAD been tested and it was so bad they didn't rate it - Offered to provide product that WAS rated (even though they didn't have a product that fit the K requirements) - COA: fraud - Didn't sue for negligence b/c economic loss rule - damages not available for solely economic losses (also didn't choose negligence b/c of contrib defense) o Sole issue: whether there was a false statement o HELD: half-truths are the same as lies o What about caveat emptor? No affirmative duty to volunteer info if not asked but you cannot lie if asked
· Barb v. Wallace, 412 A.2d 1314 (Md. Ct. Spec. App. 1980).
o Facts: kid building go-kart, needed gas engine, told seller why needed, seller said his engine was good for that b/c shaft going out of the side o COA: 2-315 o Reliance in favor of P b/c he was 16-year-old kid buyer and the seller was an adult
· Stang v. Hertz Corp., 490 P.2d 475 (1971).
o Facts: nuns rent car, it had bad tires/tire issue; one dies. Rental agreement said vehicle in good mechanical condition (but P didn't read the agreement until signing it). o Issue: whether P relied on the rental agreement and/or the employee's statements o Is proof of reliance necessary in a COA under 2-313? o HELD: P failed to prove that the statement became part of the basis of the bargain o How long after the sale? So long as the sale is still "hot" (i.e. as long as the seller will take it back) o Related issue: brochures in sealed packages: not read until after purchase, but basis of the bargain includes the item and all brochures accompanying the product when sold. RULE: reliance is not expressly required in express warranty, but P still has to prove that the representation became o part of the basis of the bargain (which you typically do by showing reliance) Comment 3: no reliance needed .... All statements collectively become the basis of the bargain/warranty Comment 7: you can have an after the fact statement that can be seen as part of the warranty. How long after the sale? So long as the sale is still "hot" (i.e. as long as the seller will take it back) D has BOP to show non-reliance
· Maybank v. S.S. Kresge, 266 S.E.2d 409 (N.C. Ct. App. 1980).
o Flash cube blew up in P's face o Label said damaged cubes may shatter, but this cube exploded o COA: 2-314 o Result: shattering flash cube may be merchantable if adequate warning, but an exploding flash cube is not merchantable
Thomas v. Winchester (N.Y. Ct. App. 1852)
o Husband purchased medicine from druggist to give to his ailing wife; was mislabeled and was actually poison and wife nearly died. o Chain of custody: a manufacturer Winchester (employee: Gilbert) Aspinwall (NY druggist) Foord (the local druggist) Mr. Thomas (for his wife) o Privity was with the druggist but he was not the one who was negligent. This mislabeling occurred earlier in the chain, when Winchester purchased the raw product and mislabeled it. o Created new exception to privity (referenced just above) - very narrow o Early cases interpreting Winchester dealt with exploding coffee urns, explosives, guns, poisons . . . but then came MacPherson.
· Kolarik v. Cory Int'l Corp, 721 N.W.2d 159 (Iowa 2006).
o Olive pit case - P fractured tooth o Label said "minced pimento stuffed" = basis of P's warranty claim b/c it's implied that olive must be pitted before it can be stuffed o COA: express warranty o Trial ct: SJ for D; P appealed o Test used: negligence-based - see cmt 5 to express warranty - What a reasonable consumer would expect AND - Custom/trade of the industry o Result: SJ upheld; given evidence re: olive pit industry, the statement is merely descriptive; not intended as a guarantee that lives are entirely free of pits o COMPARE: Lane case, pg. 95 n.2 § "all luscious meat, no bones, no waste" / "boned chicken product" - HELD: the label plus the newspaper ad constituted an express warranty that the product contained no bones whatsoever
MacPherson v. Buick Motor Co., 111 N.E. 1050 (N.Y. 1916).
o P purchased new Buick f/ local dealer in 1910; in 1911, P was driving when the rear wheel detached. Car hit pole and overturned, causing injuries. o Imperial had supplied 500k wheels to Buick and this was the first defective one o Wheels arrived at Buick painted, as was industry custom o COA: negligence - Buick's negligent act: failure to inspect, test, and in selection of component part supplier (Imperial Wheel Co.) - P didn't sue Imperial, likely b/c must allege there was a better design and this wheel was the industry standard - Also don't sue all Ds for same negligent act unless they all did the same thing (i.e. Buick's negligent act prob different than Imperial's) o Problem: P had no privity w/ Buick. How Cardozo handles this: - Starts w/ main rule: no privity, no action; privity required unless an exception applies - CL precedent re: imminently dangerous products (Winchester - poison; Statler - coffee urn) - Says things are imminently dangerous when they are negligently made · Takes the exception, flips it on its head, and makes it the rule o Rule: didn't overrule privity requirement in negligence actions, but that was the effect it had
Winterbottom v. Wright (1842)
o P sued mfr and repairer of stagecoach for negligence o D had K's w/ someone else though (the mail company for whom P worked) o Defense asserted: privity! o Held: "Unless we confine the operation of such K's as this to the parties who entered into them, the most absurd and outrageous consequences, to which I can see no limit, would ensue."
Historical Development of Products Liability COAs:
o Pre-MacPherson - emphasis on privity, regardless of COA o Post-MacPherson (1916-1963) - emphasis on negligence as primary COA, along with warranty o Greenman Era (strict liability) (1963-present) - NO FAULT replaces negligence - Rest. 2d § 402A - different versions in every state
what are representations
oral or written assertions concerning the product; the seller providing pictures or descriptions of the product can also be considered representations
what is the plaintiff alleging in a design defect case?
plaintiff admits that the product was manufactured as intended but the design itself was defective
Puffing or fraud? Our cola is better than their coal
puffing... What's the criteria for better?
Puffing or fraud? This is the "best" car that money can buy
puffing... there's a million cars out there; it's a general comparison
the implied warranty [blank] with the product
runs; the warranty attaches unless it is specifically disclaimed or limited
a typical affirmation that arises
saying a product is new when it has been slightly been used
what do the misrepresentation elements suggest?
seem to require that the representation was of sufficient importance in the eye of both the seller and the plaintiff that the plaintiff felt the representation was an importance part of the reason to to purchase and use the product (however.... not basis of the bargain like warranty)
implied warranty of merchantability is similar to what?
strict liability
sealed container doctrine does not apply to what kind of claims
strict liabity
duty to warn only exists when there is a [blank] of persons known to have this risk OR where an [blank] class of users is known (or should have been known) to exist
substantial; indentifiable
learned intermediate rule
the drug manufacturer will meet its duty to warn by providing the warning to the prescribing physician; only applies to warning defects
how is the defendant's liability to determined in a warning defenct?
the information that existed at the time
risk-utility test
the jury is instructed that they are only to measure the risks created by the product defect and compare those risks to the utility of the product
knowledgeable manufacturer test
the jury is instructed to ASSUME the manufacturer had knowledge of the risks associated with the product, and then decide whether a reasonable manufacturer would have put the product on the market... even without the knowledge, the seller will be placed in the position oof the jury assuming that knowledge was there and then asking whether a reasonable manufacturer would place the product on the market
the duty of the manufacturer
the manufacture and sale of a product is held to create a duty to the purchasers, users, and those who may be ultimately injured by the product
Purpose of Res Ipsa
the plaintiff does not have to prove breach of. duty, but there is an inference created that the breach of duty probably occurred
proximate cause test.
the product must have been the natural and probable cause of the injury .... i.e. when an appliance catches on fire, the destruction of the rest of the house seems to flow naturally from that defect
standard for "without substantial change"
the product must have had the defect when it left the hands of the defendant; if the defect was added to the product after it left the hands of the defendant, then the defendant is not liable for the harm
what must the plaintiff prove for fraudulent misrepresentation?
the seller knew the statement was false, made the statement without belief in the truth, or made the statement in reckless disregard for the truth.
what must the plaintiff prove for strict liability misrepresentation?
the seller may be liable for the false statement even if it was an. innocent falsehood
Res Ipsa Loquitur
the thing speaks for itself
what must the plaintiff prove for negligent misrepresentaion?
the. seller know failed to use reasonable care to discover the truth before making the misrepresentation
describe the duty of the manufacturer
to use care and skill of a reasonable person of ordinary prudence under similar circumstances
test for justifiable reliance
type of reliance in which reasonable people would engage; if the plaintiff claims to have relied on outrageous opinions or sales puffing, the court would not allow the misrepresentation action
state of the art in warnings mean
what did you know and when did you know it
when is res ipsa ineffective
when there is no duty because res ipsa only proves breach of duty- it does not create a duty
General Rule of Misrepresentation
where the seller makes false representations about a product, a failure of product to perform can lead to liability
consumer expectation test
whether the product performed in a manner as expected by the ordinarily prudent consumer
why is difficult to prove wholesalers and retailers are negligent?
wholesalers and retailers merely sell products that have already been prepared; about the only duty that a plaintiff can allege is some duty to inspect the products for defects
Does 2-315 require privity?
yes