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