Business Law Ch. 7 Strict Liability and Product Liability

Strict Liability

"Liability without fault", certain activities so dangerous that even if person upheld duty of care they can be held liable

3 Types of Strict Product Liability Product Defects

1. Manufacturing Defects 2. Design Defects 3. Inadequate Warnings

Rylands v. Fletcher

Established Strict liability

Other applications of Product Strict Liability

Injured Bystanders, Suppliers of Component Parts

Based on Negligence

Must Use Due Care: 1. Design 2. Selecting Materials 3. Use of Appropriate Production Resources 4. Assemble and test the Product 5. Warnings of Dangers that aren't obvious 6. Inspecting and Testing Components of product Note: Privity of contract not required for Product Liability

Strict Product Liability

Occurs regardless of reasonable care, no contract necessary

Ownership of Animal

Wild = any harm Domestic = if owner should have known

Applications of Strict Liability

1. Abnormally Dangerous Activities 2. Owner of wild or domestic animal 3. Certain bailments (temporary transfer of goods) 4. Product Liability

2 Types Regular Product Liability

1. Based On Negligence 2. Based On Misrepresentation

6 Requirements for Strict Product Liability

1. Defective Product sold by Defendant 2. Defendant engaged normally in business of selling 3. Product is unreasonably dangerous to the user 4. Physical harm to self or property due to product 5. Casual Relationship 6. Goods don't change significantly from time bought

Assumption of Risk

1. Plaintiff new and appreciated risk 2. Plaintiff voluntarily assumed risk

Defenses to Product Liability

1. Preemption 2. Assumption of Risk 3. Product Misuse 4. Comparative Negligence (Fault) 5. Commonly Known Dangers 6. Knowledgeable User

Abnormally Dangerous requirements (3)

1. Serious harm potential 2. Cannot be made safe 3. Not commonly performed in the community

Manufacturing Defects

Departure from unit design that results in flaws

Design Defects

Design for units is faulty, must prove 1. Reasonable alternate design available 2. Failure to adopt alternative method made design unsafe

Comparative Negligence (Fault)

Doesn't completely eliminate liability but reduces the damages that have to be paid

Commonly Known Dangers

Don't need to warn about these

Based On misrepresentation

Just like Fraud, must prove causation

Inadequate Warnings

Liable if leave out instructions or warnings to help make product safer -Must include forseeable risks

Statues of Limitations and Repose

Limitations: 2-4 years in product liability (time tolled/suspended until injured party discovers the injury) Statues of repose: Outer time limits, lawsuit must happen within certain amount of years of the product being originally sold

Preemption

Not liable when government runs checks and regulation

Knowledgeable User

People should know risks of something they are familiar with. Ex: Person can't sue mcdonalds for being fat

Prima Facie

Presumed to be true

Product Misuse

Product used for unintended purpose (unforseeable) and person is hurt

Abnormally Dangerous Activities

Proximately caused by ultrahazardous or dangerous activities

To prove strict liability of Product

Show: -Defective when sold -Product unreasonably dangerous (reasonable person test, less dangerous alternative feasible but wasn't produced)

Market Share Liability

When plaintiff can't prove which manufacturer is guilty so they split up the damages based on % of market share

Product Liability

manufacturers held liable for injuries caused by products