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C13 Insurance Against Liability > Chapter 7 - Products Liability and its Effects > Flashcards

Chapter 7 - Products Liability and its Effects Flashcards

1
Q

Outline the typical ladder of supply from top to bottom

A 
Manufacturer and manufacturer's agent
Manufacturer's agent
Distributor or jobber
Wholesaler
Retailer
Installer, inspector or repairer
Purchaser, consumer or user
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2
Q

When may a installer, inspector or repairer be found liable?

A

If they fail to warn of a dangerous hazard. If the information becomes available at some later date, they must act on it to warn those in danger of injury.

They could all perform their duty negligently.

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3
Q

Who is exempt from liability on the ladder of supply?

A

No one

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4
Q

What are two ways a product liability claim may arise?

A

Breach of Contract

Tort

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5
Q

What happened in McPherson v. Buick Motor Co?

A

Part of a wheel of an automobile was defective

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6
Q

What happened in Buckley v. Mott?

A

A person buys an ice cream bar which contained powdered glass

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7
Q

What happened in Donoghue v. Stevenson?

A

A soft drink bottle contained a decomposed snail

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8
Q

What has been one of the biggest consequences of mass merchandising?

A

Large number of claims - class actions

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9
Q

Who does the burden of proof lie with for product claims?

A

The plaintiff; they must prove the defendant acted negligently

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10
Q

Define res ipsa loquitur

A

It allows the burden of proof to shift to the manufacturer to show that it was not negligent. The accident only could of occurred due to the manufacturer’s negligence.

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11
Q

How does the burden of proof change for dangerous items?

A

The burden shifts to the liability. However, it is a form of strict liability and thus liability cannot be escaped.

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12
Q

Define privity of contract

A

The relationship between the contracting parties and the boundaries it sets for those who can sue upon the terms of the contract - only the parties to a contract have the right to sue one another.

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13
Q

What does the warranty of fitness guarantee to the buyer?

A
  • It must be reasonably fit for their intended use

- Be of merchantable quality

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14
Q

What conditions must be met for the sale to qualify under warranty?

A

The buyer must rely on the skill and judgment of the seller to provide suitable goods:

  • Did the seller describe the product to the buyer?
  • Did the seller provide guidance to the buyer in selecting and purchasing the product?
  • Did the buyer indicate why he or she was buying the product?
  • The decision to buy the product may be an indication that the buyer relied on the seller’s judgment.

The goods sold must fit within the seller’s scope of business:
- When the seller makes a decision to sell the goods, this is usually sufficient to establish this parameter even if it was the first time the seller sold them.

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15
Q

What is an express warranty?

A

It may describe the condition of an item and the acceptability to the receiver; in which they would agree upon receiving it that way.

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16
Q

What is the relevance of advertising and marketing?

A

Representations made through advertising and marketing are implied warranties.

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17
Q

Which case established the tort theory allowing an injured party to sue the manufacturer?

A

McPherson v. Buick Motor Co.

car wheel collapsed

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18
Q

Which Canadian case supported the tort theory?

A

Buckley v. Mott

powdered glass in ice cream bar

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19
Q

How is Donoghue v. Stevenson relevant to tort theory?

A

It established that a claim could be made without an actual contract being in place.

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20
Q

What is meant by extended duty of care?

A

It extends duty of care to anyone who could have found it reasonable to foresee damages occurring.

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21
Q

What places the heavy onus on the manufacturer?

A

Government regulation and case law (Donoghue v. Stevenson)

22
Q

What practical purpose does a recall serve?

A

Proof that the product is defective and that the manufacturer is attempting to remedy it, thus not being negligent

23
Q

What does breach of statute provide?

A

Evidence of negligence

24
Q

Would a warning or label mitigate the required to make a safe product?

A

No

25
Q

What two things must be included in a product warning?

A
  • Instructions how to use the product

- Instructions on how to deal with an accidental injury should it occur

26
Q

What changes in regards to the manufacturing of inherently dangerous items?

A

The manufacturer is held to a higher standard of care

27
Q

Which case helped establish the need for specific instructions on warning labels?

A

Lambert v. Lastoplex Chemicals Co.

28
Q

Explain the relevance of Lambert v. Lastoplex Chemicals Co.

A

A label had advised to keep a product away from open flames but did not outright say the product was high flammable. As a result, a pilot light in the next room caused an ignition. The case was ruled against the manufacturer due to an insufficient warning label.

29
Q

What happened in Ruegger v. Shell Oil Co.?

A

A weed killer had a warning on a label to be kept away from flowers, however tomatoes that were a quarter mile away were damaged. The warning was deemed inadequate and ruled against the manufacturer.

30
Q

What addition must be made to general warning labels?

A

They must be specific in regards to what could happen and certain precautions.

31
Q

How does misuse of product affect a lawsuit?

A

It may be used for the manufacturer to defend themselves.

32
Q

What possible consequence is there to not reading the label as a consumer?

A

You may be found contributorily negligent. This defence can be used by the manufacturer.

33
Q

What exists at the discovery of a defect?

A

An onus to warn the customer

34
Q

Define sistership

A

It is used typically for product recalls. It suggests that when something was mass-manufactured, if there is a defect with one item it may apply to all.

35
Q

What industry did sistership originate from?

A

The aircraft industry

36
Q

Which organization establishes and enforces safety standards for consumer products?

A

The Consumer Product Safety division of Health Canada

37
Q

What is the Hazardous Products Act?

A

Certain regulations have been set up for any product that is likely to be a danger to the health and safety of the public.

38
Q

What act are commodities such as cosmetics subject to?

A

The Food and Drugs Act regarding their composition, safety, labeling and advertising.

39
Q

What act are non-food consumer products subject to?

A

The Consumer Packaging and Labeling Act regarding bilingual labeling and deceptive packaging.

40
Q

How does an allergic reaction affect products?

A

It does not make the liable manufacturer or make the product itself defective.

41
Q

How does liability arise from drug products?

A

Many drugs due to their benefit often outweighing a potential risk, are still sold. The manufacturer must provide adequate warning where eligible.

42
Q

Which case was the basis of contributory negligence?

A

Smith v. Inglis Ltd.

removed third prong of electrical plug

43
Q

What are threemajor defences for the manufacturer under contributory negligence?

A
  • Product is altered and used in a way that is not intended
  • Consumer continues use of product after knowledge of defect
  • Abnormal use
44
Q

Explain the relevance of Rae v. T. Eaton Co. (Martimes) Ltd.

A

A can of artificial snow was banged on the concrete, damaging a child’s eye. Liability was not found against the retailer.

45
Q

Explain the relevance of Yachetti v. John Duff and Sons

A

A plaintiff contracted trichinosis after eating raw pork. It was dismissed as it is reasonable to assume pork must be cooked thoroughly.

46
Q

Which two cases outline abnormal use for contributory negligence?

A

Rae v. T. Eaton Co. (Maritimes) Ltd.

Yachetti v. John Duff and Sons

47
Q

What is meant by volenti non fit injuria?

A

The voluntary assumption of risk

48
Q

Explain voluntarily assumption of risk

A

A plaintiff waives their right to sue as they have voluntarily assumed risk after adequate warning.

49
Q

How can an intermediate examination protect the manufacturer?

A

If it was reasonable to assume that someone handling the goods should have identified a defect, the manufacturer may use this as a defence.

50
Q

What is the learned intermediary rule?

A

Application of the principle of intermediate examination and intervening cause.

If an intermediary uses the product, they should be able to identify an error. This is someone who may need less information about the product than the general public.

51
Q

Why is it often difficult to provide proof that the defendant was negligent?

A

Negligence of the manufacturer is difficult to prove for the plaintiff as close examination of the process is not available

52
Q

Which principle was established by Rivtow Marine Ltd. v. Washington Iron Works?

A

The responsibility to advise consumers of any sort of defects and the consequences of the failure to do so.

C13 Insurance Against Liability (10 decks)

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