11. Product Liability Flashcards
What is required for product liability?
1) Defect
2) Existed when product left D’s control
- Inferred from product’s movement through normal channels of distribution
2) D’s liability
- Negligence
- Strict tort
- Intent (NOT common)
- Express/Implied warranty
- Misrepresentation of fact
What type of defects are there?
Manufacturing defect
- Product is different from + more dangerous beyond ordinary customer’s expectation/foreseeable misuse
Design defect
- Product is in same line with dangerous propensities
- Feasible alternative approach: Product could be replaced with alternative design if there is either; (a) less dangerous modification; (b) economically feasible alternative
Inadequate warnings (Design defect)
- Manufacturer failed to give clear warnings about risks ‘NOT apparent’ to users
- Learned intermediary rule: Warning re prescription drug/medical device NOT given to physician (NO need to be given to patient)
What exceptions deny existence of defects?
Compliance with government safety standards
- NOT conclusive evidence of non-defect
- Fed law NOT preempt State product warning law
Scientifically unknowable risk
- NOT foreseeable danger (at time of marketing)
What is required for intent liability?
(NOT common)
1) D intended/knew consequences would be substantially certain to occur
2) ANY injured P can sue
- NO privity required
=> Most likely seen as Battery
What is required for negligence liability?
1) Duty of care
- D must be commercial supplier (manufacturer/wholesaler/retailer/NOT repair)
- P must be foreseeable (user/consumer/bystander) (NO privity required)
2) Breach (D’s negligent conduct led to supplying defective product)
- Manufacturing defect (Manufacturer): Res ipsa loquitor
- Design defect (Manufacturer): D knew/should have known of defect (UNLESS NOT apparent until defect reached public)
- Manufacturing/Design defect (Retailer/Wholesaler): Cursory inspection required only
3) Causation
- If NO Intermediary => Manufacturer is liable (actual + proximate causation)
- If Intermediary failed to discover defect but NOT beyond ordinary foreseeable negligence => Manufacturer is liable (actual causation) + Intermediary is liable (proximate causation)
- If Intermediary failed to discover defect + beyond ordinary foreseeable negligence => Intermediary is liable (actual + proximate causation) (superseding cause)
4) Damages
- Personal injury + Property
- If claim is SOLELY for economic loss (requires repairs/not work as well as expected) => Must bring warranty claim
What is required for strict tort liability?
1) Commercial supplier
- Manufacturer (of that defective component)/Retailer/Wholesaler
- Lessor
- Seller of used products
2) Produce/Sell defective product
- Dangerous beyond customer’s ordinary expectation
- NOT service (BUT could be liable for negligence)
3) Causation (actual)
- Defect existed when product left D’s control (NOT altered by substantial change)
- Even if defect difficult to trace => P may rely on inference that failure ordinarily ‘would occur’ due to defect
- Presumption that adequate warning would have been read and understood
4) Causation (proximate)
- If NO Intermediary => Manufacturer is liable (actual + proximate causation)
- If Intermediary failed to discover defect but NOT beyond ordinary foreseeable negligence => Manufacturer is liable (actual causation) + Intermediary is liable (proximate causation)
- If Intermediary failed to discover defect + beyond ordinary foreseeable negligence => Intermediary is liable (actual + proximate causation) (superseding cause)
4) Damages
- Economic damages (Personal injury + Property)
- NOT economic damages
What is the difference between negligence and strict tort liability?
Negligence
- Fault (failure to discover defect UNLESS no reasonable opportunity to inspect)
- NO economic loss
Strict tort
- NO fault (NO failure to discover defect, no reasonable opportunity to inspect NOT relevant)
- NO economic loss
What defences can prevent intentional/negligence/strict tort liability/misrepresentation of fact?
Contributory negligence
- NOT P’s mere failure to discover/guard vs defect
- NOT P’s reasonably foreseeable misuse
- NOT intentional torts
Comparative negligence
Assumption of risk
What is required for breach of implied warranty (UCC)?
1) Product
- Sale of goods
- Leases
2) Plaintiffs
- Horizontal privity required (Buyer’s family/household/guests)
- NO vertical privity required (Buyer can sue Manufacturer)
3) Breach of implied warranty (NO fault required)
- Product failed to live up to standards imposed by implied warranty
- NOT merchantable ((1) Goods are NOT of average acceptable quality + (2) Goods are generally NOT fit for ordinary purpose)
- NOT fitness for particular purpose ((1) S knew/should have known goods’ particular purpose + (2) S knew/should have known B’s reliance on Seller’s judgment or skill in selecting goods)
4) Causation (actual + proximate)
5) Damages
- Personal + property
- Economic (unlike strict tort/negligence)
What is the difference between express and implied warranties?
Express warranty
- Seller makes affirmation of fact/promise (warranty) to Buyer relating to goods; that warranty become part of ‘basis of the bargain’
- NO horizontal/vertical privity required (BUT someone must have relied on Seller’s representation so that it became ‘basis of the bargain’)
Implied warranty
- Seller implies warranties that goods are merchantable of fit for its particular purpose
- Horizontal privity required (NOT vertical privity)
What is required for breach of express warranty (UCC)?
1) Product
- Sale of goods
- Leases
2) Plaintiffs
- NO horizontal/vertical privity required (BUT original Buyer must have ‘relied’ on Seller’s representation so that it became ‘basis of bargain’ => Remote person can sue, even w/o knowledge of representation)
3) Breach of express warranty (NO fault required)
- Product failed to live up to standards imposed by express warranty
4) Causation (actual + proximate)
5) Damages
- Personal + property
- Economic (unlike strict tort/negligence)
What defences can prevent breach of warranty?
Contributory negligence
Assumption of risk
Failure to give notice of breach within reasonable time (UCC)
Disclaimer
- Express warranties (disclaimer to be read consistently with warranties => disclaimer almost impossible)
- Implied warranties (economic damages only)
What is required for misrepresentation of fact?
1) Statement of material fact
- Regarding goods’ quality/usage
- NOT mere puffery
2) Seller’s state of mind
- Strict liability: False statement (NO fault)
- Negligence: Negligent re false statement
- Intentional: Knowledge/Reckless re false statement
3) Seller’s intent to induce Buyer’s reliance in particular transaction
4) Buyer’s reliance
- Actual (even substantial reliance is justifiable)
- Proximate
5) Plaintiffs
- NO horizontal/vertical privity required (BUT original Buyer must have ‘relied’ on Seller’s representation so that it became ‘basis of bargain’ => Remote person can sue, even w/o knowledge of representation)
6) Causation (Actual + Proximate)
How can multiple suppliers (not identifiable) be found liable?
Negligence
- Alternative causes approach (Summers v Tice)
- Burden of proof => Each supplier to prove they are not liable
NOT strict tort
How can the defendant prevent himself from being ultimately liable?
Claim indemnity from supplier above supply chain
