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Rule of caveat emptor - Is it still in place today?

"Let the buyer beware," - Requires that the buyer examine, judge and test [the product] for himself. This rule has since been eliminated.

The strict liability doctrine holds manufacturers liable to consumers injured by defective products regardless of...

...whether the manufacturer exercised all reasonable care or not.

Ultrahazardous activity

An activity that cannot be performed safely even if performed with reasonable care; if harm results, the performer may be held strictly liable.

Failure to warn

Applies when a manufacturer knows of a danger caused by the product's use that cannot be prevented entirely, but which users could be warned about.

Bulk-supplier doctrine

When a supplier sells a product to an intermediary in bulk, the supplier can discharge its duty to warn the ultimate users if it provides adequate instructions to the distributor next in line, or determines that the intermediary party is adequately trained in the use of the product.

Implied warranty

When the law inserts quality standards into the relationship regardless of the actual contract terms.

Express warranty

When the manufacturer contractually provides performance

Product misuse

When the product was not being used for its intended purpose or was being used in a dangerous manner; it is a defense to a products liability claim so long as the misuse was not foreseeable.

Joint and several liability

Where multiple tortfeasors exist and the injury cannot be divided and attributed individually, a plaintiff may choose to sue one, several, or all tortfeasors and may collect the entire judgment from one, several, or all tortfeasors.

Misrepresentation

The basis for strict liability in tort; relates to manufacturer's advertising and its truthfulness.

Dram shop liability

The establishment that serves the alcohol can be responsible for the harm inflicted on a third party.

Product liability

The liability that a producer or seller of goods have to those injured by their products.

Risk-utility balancing

Some products cannot be made completely safe.

Design defect

Such cases focus on the determination of whether an injury to users could have been prevented by designing the product differently.

To recover under a theory of tortious interference with business relations, a plaintiff must show [that the] defendant:

1) Acted improperly and without privilege, 2) acted purposely and with malice with the intent to injure, 3) induced a third party or parties not to enter into or continue a business relationship with the plaintiff, and 4) caused [the] plaintiff financial injury.

The United Kingdoms' House of Lords expressed that a false representation has been made if:

1) It was made knowingly, or 2) Without belief in its truth or 3) Recklessly, careless whether it be true or false.

Elements (steps) of strict liability or product defect law

1) The product was defective, 2) The defect created an unreasonably dangerous product, 3) The defect was the proximate cause of or a substantial factor in bringing about the injury, 4) The injury caused damages.

The following key elements generally have been agreed upon to establish fraud/intentional misrepresentation:

1) There was a misstatement of an important or material fact; that is, false information was presented as fact. 2) There must be scienter or intent to defraud; that is, the party wanted to mislead the other party and intentional deceived him. 3) The seller must know, or have reason to know, that a statement she is making is false. 4) The recipient of the false information must justifiably rely on that information in making the decision to go ahead with the deal. 5) There must be privity between the parties; that is, the parties must have bene in a relationship that created a legal obligation. A third party observing fraud cannot sue. 6) Causation: a logical link existed between reliance on the misstatement and the losses that were then suffered by the plaintiff - proximate cause. 7) There must be damages that were caused by the fraud.

The Restatement's strict liability in tort rule is found in Section 402A:

1. One who sells any product in a defective conditional unreasonable 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 b. the user or consumer has not bought the product from or entered into any contractual relation with the seller.

Restatement (Third) of Torts on Products Liability: Categories of Product Defect

A product is defective when, at the time of sale or distribution, it contains a manufacturing defect, is defective in design or is defective because of inadequate instructions or warnings. A product: a. 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. b. is defective in design when the foreseeable risks or harm posed by the product could have been reduced or avoided by the adoption of of a reasonable alternative design by the seller or other distributor, c. is defective because of inadequate instructions or warnings when the foreseeable risk of harm posed by the product could have been reduced or avoided...

Intentional misrepresentation

A tort in which a seller or lessor fraudulently misrepresents the quality of the product and a buyer is injured thereby.

Interference with prospective advantage

A tort where there is an intentional and unjustified intervention with a relationship that a party had been developing with others in an effort to obtain new business or more business.

Warranty

A warranty is a manufacturer's assurance that a product will meet certain quality and performance standards.

Unknown hazards

Dangers that were not known or were not fully appreciated at the time the product was manufactured.

Fraud - The 2 types of tort that fraud may be categorized in.

Deliberate deception for unfair or unlawful gain - a broad concept, and may be held to be an INTENTIONAL tort or to be a tort based on NEGLIGENCE.

Assumption of risk

Doctrine under which a person cannot recover for injuries received from a dangerous activity to which she voluntarily exposed herself.

A manufacturer is required to exercise ______ care under the circumstances in the production of its product.

Reasonable care.

Sophisticated user

In tort law, a defense that when a manufacturer sells a product to a sophisticated buyer, such as another manufacturer, the purchaser is responsible for instructing its employees about the dangers in using the product.

Interference with contractual relations

Intentionally causing one of the parties to a contract not to perform the contract. The elements include: 1) The existence of a contractual relationship between the injured business and another party, 2) that was known to the wrongdoer, who, 3) intentionally interfered with that relationship.

Scienter

Intents to defraud

EASY POINTS: Manufacturers are generally (not liable/liable) if the consumer has engaged in improper activity that increases the risk of injury.

NOT LIABLE.

Each year, about _____ lawsuits involving tort claims are filed in our nation's court systems, most in state courts.

One-half million!

Distribution of Tort Litigation Costs: 21% plaintiffs' legal fees, 16% defendants' legal fees, 10% value of defendants' time, 7% court costs, claims processing and value of plaintiffs' time, and the remaining 46% of the cost is?

Payments to plaintiffs: Includes economic loss and awards for pain and suffering.

Elements of Strict Liability or Product Defect Law

The product was defective --> The defect created an unreasonably dangerous product --> The defect was the proximate cause of or a substantial factor in bringing about the injury --> The injury caused damages

Privity of contract

The relationship that exists between contracting parties. It is essential to a contract case that privity, a legal relationship, exist between the parties.

Section 402A

The section on strict liability on tort rule placed in the American Law Institute's The Restatement (Second) of Torts. This section is later refined in The Restatement (Third) of Torts under section 2, regarding product liability.