7. Products Liability

Question 1

Strict Liability Requirements

Answer 1

(CDCF)

♣ 1. D is a commercial supplier
• Supplier have a strict duty to supply
• Commercial supplier: one who routinely deals in the product sold, including any merchant in the stream of commerce.
o E.g. manufacturer, distributor, supplier
o Casual sellers, service providers are not suppliers.

♣ 2. Product is defective
• defect must make product unreasonably dangerous

♣ 3. Causation: Defective product was actual and proximate cause of P’s injury
• Product must not be substantially altered between leaving commercial supplier and reaching consumer.

♣ 4. P used the product in a foreseeable manner
• P’s misuse of the product can be foreseeable

♣ 5. Damages
• Physical injury or property damages (not solely for economic loss)

Question 2

Negligence Theory:

Answer 2

o Element:
♣ 1. Duty of care: each commercial supplier in the stream of commerce owes a duty to all foreseeable product users and bystanders.

♣ 2. Breach of duty: D’s negligence leads to the supplying of a defective product
• Retailers and wholesalers satisfy due care by a cursory inspection of the product (this makes it difficult to hold them negligent for product defects)

♣ 3. Causation: P must show actual and proximate cause

♣ 4. Damages: physical injury or property damage (economic loss alone is not recoverable)

DEFENSES: all negligence defenses available
o Products liability as battery:
If a commercial supplier places a product into the stream of commerce knowing that it may harm someone, this may give rise to a tort of batter

Question 3

3 types of product defects

Answer 3

1. Manufacturing defect
2. Design defect
3. Inadequate warning defect

Question 4

Manufacturing defect

Answer 4

♣ Product departs from the intended design, causing it to be more dangerous than designed.

♣ Requirement:
• Product failed to perform as safely as an ordinary consumer would expect.

Question 5

Design defect

Answer 5

♣ Product creates an unreasonable risk of danger due to its faulty design

♣ Requirement:
P must show that hypothetical alternative design exists that is safer but has comparable cost and purpose.

Question 6

Inadequate warning defect

Answer 6

♣ Manufacturer fails to adequately warn of a non-obvious risk associated with a product’s use

♣ Requirement:
• 1. Product has risk that cannot be eliminated by redesign, and
• 2. Consumers would not ordinarily notice

♣ D is not liable for risks that were unforeseeable at the time the product was marketed.

Question 7

Implied Warranties

Answer 7

♣ Merchantability
• Seller warrants that goods are of average acceptable quality (e.g. without defects) and generally fit for their ordinary purpose.

♣ Fitness for particular purpose
• If seller (1) knows or has reason to know the particular purpose for which buyer is purchasing, and (2) buyer relies on seller’s skills or judgment, seller implies that goods are fit for that purpose.

o Elements:
♣ 1. Warranty: existence of an implied warranty
♣ 2. Breach: product fails to live up to applicable warranty
♣ 3. Causation: actual and proximate
♣ 4. Damages: personal, property and economic are all recoverable
o Defenses: assumption of risk, contributory & comparative negligence

Question 8

Liabilities Based on Representation

Answer 8

o Express Warranty
♣ Statement of fact or promise regarding goods sold that becomes part of the basis of the bargain

♣ Requirement:
• 1. Express warranty: relied upon by the purchaser
• 2. Breach: product fails to live up to that warranty
• 3. Causation: actual and proximate
• 4. Damages: personal, property and economic loss

♣ Defenses: assumption of risk, contributory and comparative negligence
♣ Any consumer or bystander can sue for breach
• Bystanders need not have relied on the express warranty, as long as the original purchaser did

o Misrepresentation of Fact
♣ Seller will be liable for any misrepresentation made in the course of a sale if:
• 1. Seller made a misrepresentation regarding a material fact concerning the quality or use of the good
• 2. Seller intended to induce reliance by buyer; and
• 3. Misrepresentation induced justifiable reliance
♣ Defenses
• No assumption of risk; contributory negligence available if misrepresentation was negligent, not intentional