Products Liability

Question 1

Products Liability:

Strict Liability

Answer 1

Elements:

1. D is a merchant
   
   • ​​Merchants have a strict duty to supply safe goods
   • Merchant - one who reoutinely deals in the product sold, including any merchant in the stream of commerce
     
     • eg. manufacturer, distributor, supplier
     • Casual sellers, service providers are not merchants
2. Product is defective

• ​Defect must make the product unreasonably dangerous
  
  3. Product is unaltered since leaving D’s control

** **4. P used the product in a foreseeable manner

• P’s misuse of the product can be foreseeable

Who can sue - foreseeable users or bystanders

• ie. buyers, as well as their guests, employees, family, etc

Damages

• P can recover for physical injury or property damage, but not solely for economic losses

Question 2

Products Liability:

Types of Product Defects

Answer 2

Manufacturing defect - when a product departs from its intended design, causing it to be more dangerous than designed.

• P must show that the product failed to perform as safely as an ordinary consumer would expect

Design defect - when a product creates an unreasonable risk of danger due to its faulty design

• P must show that a hypothetical alternative design exists that is safer but has a comparable cost and purpose

Inadequate warning - when a manufacturer fails to adequately warn of a non-obvious risk associated with a product’s use

• The manufacturer also has a duty to warn of foreseeable dangers from misuse of the product
• P must show that the product has risks that:

1. ​Cannot be eliminated by redesign, and
2. Consumers would not ordinarily be aware of

• Unavoidably unsafe products - if products cannot be made safe for their ordinary use (chainsaws, firearms) a manufacturer must give:

1. Proper instructions for use, and
2. Adequate warnings of known dangers

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

Question 3

Products Liability:

Negligence Theory

Answer 3

P may establish liability for a product defect under standard negligence theory

• Note - a product defect is almost always easier to establish under a strict liability theory

Elements:

1. Duty of care - each merchant in the stream of commerce owes a duty to all foreseeable product users and bystandards
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
• Note - an intermediary’s negligent failure to discover a defect does not absolve an upstream merchant of liability
  
  4. Damages - P must show physical injury or property damage
• Economic loss alone is not recoverable

**Defenses ** - Call standard negligence defenses are available

Question 4

Products Liabilty:

Implied Warranties:

Merchantability & Fitness for a Particular Purpose

Answer 4

Implied in every sale of goods is a warranty of merchantability and warranty of fitness for a particular purpose (if applicable)

Implied warranties

• Merchantability - Seller warrants that goods are of average acceptable quality (ie without defects) and generally fit for their ordinary purpose
• Fitness for particular purpose - if seller knows or has reason to know the particular purpose for which the buyer is purchasing, and buyer relies on seller’s skills or judgment, seller implies that goods are fit for that purpose
  
  • ie. a shoe stor salesperson helping a buyer find ideal running shoes for running on trails

Who can sue - all reasonably foreseeable users can sue for personal injuries arising from a breach of an implied warranty

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

Defenses - assumption of risk, contributory negligence

Question 5

Products Liability:

Liability based on representation

Answer 5

D may be liable if a product falls short of an affirmative representation made about it to buyer, either by express warranty or misrepresentation of fact

Express warranty - a statement of fact or promise regarding goods sold that becomes part of the basis of the bargain

• Any consumer or bystander can sue for breach
  
  • Bystanders need not have relied on the express warranty, as long as the original purchaser did
• Elements - same as for implied warranties:

1. Express warranty - relied upon by purchaser
2. Breach - products fails to live up to the warranty
3. Causation - actual and proximate
4. ** Damages** - personal, property, and economic losses are recoverable

• Defenses - assuption of risk, contributory negligence

Misrepresentation of fact - seller will be liable for any misrepresentation made in the course of the sale if:

1. Seller made a misrepresentation regarding a material fact concerning the quality or use of the goods
2. Seller intended to induce reliance by buyer
3. The misrepresentation induced justifiable reliance

• Defenses - no assumption of risk; contributory negligence is available unless D’s misrepresentation was intentional