PSCI 427: Ch. 11: Products Liability
The Restatement (Third) of Torts Rule
" A product is defective in design when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design... and the omission of the alternative design renders the product not reasonably safe."
Warranty
1. Any promise (or a presumed promise, called an implied warranty) that certain facts are true 2. In consumer law, any obligations imposed by law on a seller that benefit a buyer; for example, the warranty that goods are merchantable and the warranty that goods sold as fit for particular purpose are fit for that purpose
The ultimate user assumes the risk of being injured by a hazardous product in three ways
1. By discovering the defect but disregarding it and using the product anyway 2. By failing to properly maintain the product 3. By failing to follow instructions or heed warnings for safe product use
Types of Warranties
1. Express warranty 2. Implied warranty of merchantability 3. Implied warranty of fitness for a particular purpose
Unreasonably Dangerous Products
1. Fault in product design 2. Error in product manufacture or assembly 3. Improper product maintenance 4. Manufacturer/seller's failure to warn
There are five elements of products liability as defined by most state courts or statutes
1. The defect must render the product unreasonably dangerous to use 2. The seller or manufacturer must be in the business of selling products such as the flawed one(s) 3. The product cannot have been substantially changed between the time it left the seller's or manufacturer's hands and the time it reached the ultimate user. 4. The defect must have proximately caused the ultimate user's injuries 5. The ultimate user must have used the product properly, that is, in the way that the product was designed to be used.
In some jurisdictions, several additional elements are required:
1. The ultimate user must have been foreseeable 2. The seller or manufacturer must have been responsible for the condition in which the product was maintained 3. In a few states, a sale of the product must have occurred. This could be a sale between the manufacturer and a wholesale, or a wholesale to a retailer, or a retailer to a customer. Basically someone at some point had to buy the defective item
Implied Warranty of Merchantability
A promise implied but not expressed by law, that goods sold will be fit for their ordinary purpose
Express warranty
A statement that a particular promise or set of facts is true Uniform Commercial Code- a set of uniform model statutes concerning commercial transactions
Danger/Utility test
A theory in products liability design that makes a product unreasonably dangerous if the danger created by its design outweighs the benefits derived from its use
Contributory or Comparative Negligence is not a Defense
Contributory negligence is a defense to negligence and negligence has no place in strict liability cases
Faulty Product Design
Courts look to see whether the product is inherently dangerous because of a poor design but for which (that is, if such a defect did not exist) the product would have been safe to use Courts decide faulty design (which make products unreasonably dangerous) in terms of three tests: the consumer contemplation test, the danger/utility test, and the state-of-the-art discoverability test
Bad Faith
Dishonesty or other failure to deal fairly with another person
Products Liability Theory and History
Est. in Greenman v. Yuba Power Products, Inc., 59 Cal. 2d 57, 377 P.2d 897, 27 Cal. Rptr. 967 (1962)
Removal of Safety Devices
For injured parties, products liability cause of action will not be available, because the product was misused and altered
Substantially Unchanged Condition Requirement
For products liability to apply, the product must reach the ultimate user without any substantial changes in this condition from the time it left the manufacturer or seller. If something happened along the product distribution chain to alter the product (perhaps creating the unreasonably dangerous condition), then it would be unfair to hold manufacturers or sellers accountable for something they did not cause
Consumer contemplation test
If a reasonable person would not have anticipated the danger created by the fault in the product, then the product is unreasonably dangerous
State-of-the-art Discoverability test
If manufacturers could have discovered hazards created by defective product designs, using current, modern, state-of-the-art technologies
Restatement (Second) vs. Restatement (Third)
In Restatement (Third) strict liability standard is now applied to manufacturing defects of products, and a different test, a risk-utility standard, is limited to design defects. For design defects, the burden is placed back on the plaintiff in the Restatement (Third) There is no longer a "consumer expectation test"- one of many factors to consider but not sole criteria Plaintiff must show reasonable alternative design that would have been safer at a reasonable cost; this is considered more of a negligence standard than a strict liability standard
Historical Development of Products Liability
In early 19th century, English and American common law held that persons injured by defective products had to sue under contract law rather than tort law Appropriate cause of action was breach of contract or breach of warranty
Negligence is Irrelevant
It does not matter how much care the seller or manufacturer used in making or maintaining the product.
The Restatement (Second) of Torts
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 The rule stated in Subsection (1) applies though The seller as exercised all possible care in the preparation and sale of this product, and The user or consumer has not bought the product from or entered into any contractual relation with the seller
Public Policy Objectives behind Products Liability
Products liability is society's decision, through its courts and legislatures, that businesses manufacturing and selling defective products are in the best economic position to bear the expenses incurred when a faulty product injures an innocent user.
Foreseeable Misuse
Reasonably foreseeable uses, even though the product may not originally have been intended or designed for such functions are acceptable uses Using a chair as a ladder is not a misuse
Ultimate User's Misuse of Product
Saying that contributory or comparative negligence is not a defense is not to say however that the plaintiff (the ultimate user) can use a defective product irresponsibly or wantonly
Business Requirement
Section 402A of the Restatement (Second) of Torts, and most common law and statutory versions of products liability, insist that the manufacturer or seller be engaged in the business of selling products such as the defective item(s) that injured the ultimate user. Its purpose to exclude products liability for people who are not in the business of selling such goods
Seller or Manufacturer's Failure to Warn
Sometimes products are unreasonably dangerous by their nature. However, purchasers may not always spot the obvious dangers. Accordingly, manufacturers and sellers have an obligation to warn the ultimate user about inherent product dangers. Failure to warn could result in strict liability.
Proximate Cause
The defective product must have been the proximate cause of the plaintiff's injury if liability is to attach
Products Liability
The responsibility of manufacturers (and sometimes sellers) of goods to pay for harm to purchasers (and sometimes other users and even bystanders) caused by a defective product
No Privity of Contract Requirement
The ultimate user need not have purchased the merchandise directly from the seller or manufacturer, although some states require that a sale of the product must have occurred somewhere between the manufacturer and the ultimate user
Statute of Limitations for Products Liability Cases
Two years statute of limitations
Failure to Properly Maintain Product
Ultimate users cannot recover in products liability if they failed to properly maintain the product for safe users
Implied Warranties
Uniform Commercial Code (UCC) is a model (suggested) statute concerning the sale of goods that has been adopted by all states. Provision sec. 2-314 concerns implied warranties that all sellers of goods provide with their goods as to the goods being "merchantable" which means that all goods must be fair or average quality and fit for their ordinary purpose Provision sec. 2-315 provides that if the seller knows of a particular purpose for which the buyer is buying then the goods must be fit for that purpose
Proper Use Requirement
User must use the product for some function for which it was designed or intended to be used If foreseeable misuse; misuse can be anticipated, in most cases it will be considered proper use
Implied warranty of fitness for a particular purpose
When a buyer relies on a seller's expertise in recommending a particular product, there is an implied promise that the product will work as described by the seller
Imminent Danger Exception
a 19th and early 20th century exception to the privity of contract requirement in defective product cases MacPherson v. Buick Motor Co., 217 N.Y. 382, 111 N.E. 1050 (1916)
Privity of Contract
a legal relationship that exists between parties to a contract. In some cases privity must exist in order for an individual to make a claim against another. Winterbottom v. Wright, 10 Meeson & Welsby 109, 152 Eng. Rep. 402 (1842)
Restatement (Second) of Torts
a legal treatise adopted by all jurisdictions detailing the current state of tort law and trends. It is considered a highly respected secondary source of law published by the American Law Institute (ALI)
Restatement (Third) of Torts
a revision of section 402 A of the Restatement (Second) of Torts that focuses on products liability. Not all jurisdictions follow this edition
Assembly defect
a theory in products liability concerning whether a defective product is unreasonably dangerous. Errors in production, manufacture, or assembly may render a product unreasonably hazardous despite safe design
Maintenance defect
a theory in products liability concerning whether a defective product is unreasonably dangerous. If a seller fails to maintain a product properly, and the product later causes injury to the ultimate user, then the product was unreasonably dangerous
Merchantable
goods that are fit for their usual or customary purpose
Ultimate User
in products liability law, a person who is injured by a defective product. It must have been reasonably foreseeable that the injured party would use the defective product
Assumption of Risk
knowingly and willingly exposing yourself (or your property) to the possibility of harm. In most states, a person who assumes a risk of harm cannot win a negligence lawsuit against the person responsible for the harm.
Purchaser
one who acquires property through the purchase of said property
Retailer
one who makes retail sale of goods
Wholesaler
one who sells goods wholesale, rather than retail
Seller
one who sells property, either its own or through contract with the actual owner
Product manufacturer
the maker of a product that, if defective, gives rise to product liability
Deep Pocket
the one person (or organization), among many possible defendants, best able to pay a judgment; the one a plaintiff is most likely to one
Breach of warranty
the violation of either in an express of implied warranty