Products Liability

Question 1

General Defintion

Answer 1

Products liability is the liability of a supplier of a product for physical harm to person or property caused by defective products. The three basic theories of recovery in products liability are negligence, warranty, and strict liability.

Question 2

Negligence

Answer 2

1. Liability based on foreseeability of harm
2. Duty of care: If a reasonable person would foresee risk of harm if the product is not carefully made or supplied, the manufacturer or supplier owes a duty of due care to all foreseeable users
   
   1. If the product is reasonably certain to place life and limb in peril when negligently made, it is a thing of danger.
3. If there is knowledge that the product will be used by persons other than the purchaser, the manufacturer is under a duty to make it carefully.
   
   1. The knowledge of a danger must be probable, and not merely possible.
   2. There must also be knowledge that in the usual course of events the danger will be shared by persons other than the buyer.
4. Privity of contract is not required
5. Damages
   
   1. P can recover for personal injury and property damage but not purely economic loss in most states
   2. Punitive damages may be recovered where recklessness is shown

Question 3

Warranty – RS §402B

Answer 3

One engaged in the business of selling chattels who, by advertising, labels, or otherwise, makes to the public a misrepresentation of a material fact concerning the character or quality of a chattel sold by him is subject to liability for physical harm to a consumer of the chattel caused by justifiable reliance upon the misrepresentation, even though it is not made negligently.

Question 4

Express warranty (Baxter v. Ford Motor Co.)

Answer 4

1. If a seller makes a representation about the product, an express warranty arises, and breach of the warranty gives rise to contract liability
2. Puffery (FN: Cipollone v. Liggett)
   
   1. The promise of safety must be a specific one in order to constitute a warranty
      
      1. Warranty is specific: “This car will stop in 200 feet after hitting the brakes”
      2. Puffery is general: “This car will save your life”
3. Reasonable reliance (FN: Smith v. Anheuser-Busch)
   
   1. Most courts hold that the plaintiff is required to demonstrate reliance upon the representation, either in making the purchase or in using the product

Question 5

Implied warranty

Answer 5

1. Fitness for particular purpose
   
   1. Where seller should know buyer is purchasing for a particular purpose and that buyer is relying on seller’s expertise to choose suitable goods, the product is warranted to be fit for that particular use
2. Merchantability
   
   1. Seller who deals in goods of that kind warrants that goods are generally fit for normal use
   2. When a manufacturer puts a new automobile in the stream of trade and promotes its purchase by the public, an implied warranty that it is reasonably suitable for use as such accompanies it
3. Disclaimers and public policy
   
   1. Implied warranty of merchantability still exists if there is a disclaimer
   2. Disclaimer cannot be against public policy
      
      1. A disclaimer which limits the manufacturer’s liability to replace defective parts is against public policy

Question 6

Warranty: Scope of liability

Answer 6

A seller is liable even though the product is not made fraudulently or negligently, and the consumer has not bought the chattel from or entered into any contract relation with the seller

Question 7

Warranty: Causation

Answer 7

1. D is not liable where, because of an independent superseding event, its breach is not the proximate cause of the damage
2. If the danger of the product is apparent to an ordinary purchaser, warranty liability will not lie

Question 8

Warranty: Damages

Answer 8

1. Damages for pain and suffering, medical expenses, loss of wages, property damages., etc., are recoverable
2. Recovery for purely economic loss is not generally allowed

Question 9

Strict Liability In Tort – RS §402A

Answer 9

One who sells any product in a defective condition unreasonably dangerous to the consumer or his property is subject to liability for physical harm thereby caused to the ultimate user or his property if (a) the seller is engaged in the business of selling such a product, and (b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold. The rule applies although the seller has exercised all possible care.

1. A manufacturer is strictly liable in tort when an article he places on the market, knowing that it is to be used without inspection for defects, proves to have a defect that causes injury to a human being (Greenman v. Yuba Power Products)

Question 10

Rationale for strict liability

Answer 10

1. D is better able to insure against loss
2. Increased safety incentives
3. Difficulty in proving negligence

Question 11

Products defects – RS (Third) §2

Answer 11

A product is defective when, at the time of sale or distribution, it contains a manufacturing defect, is defective in design, or is defective because of inadequate instructions or warnings

Question 12

Manufacturing defect

Answer 12

1. A product contains a manufacturing defect when the product departs from its intended design even though all possible care was exercised in the preparation and marketing of the product
   
   1. Plaintiff must prove that the product deviated from the seller’s design or from the seller’s other products of the same design
2. A manufacturer cannot be held strictly liable for the danger caused by one of its products if it does not cause the defect in the product
3. If a product has a material defect in construction that causes a personal injury to the user, strict liability usually will be imposed

Question 13

Design defect

Answer 13

1. A product is defective in design when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design, and the omission of the alternative design renders the product not reasonably safe
2. Result reached by a negligence analysis, because the undue risk should have been discovered and prevented by due care

Question 14

Tests to determine whether a design is defective: Risk Utility Analysis

Answer 14

1. If risk of harm outweighs the utility of a design, the manufacturer exposed the consumer to greater risk of danger than he should have
2. Factors:
   
   1. Usefulness and desirability of a product
   2. Safety aspects of the product
   3. Availability of a substitute product which would meet the same need and not be unsafe
   4. Manufacturer’s ability to eliminate the unsafe character of the product without impairing its usefulness
   5. User’s ability to avoid danger by exercise of case in the use of the product
   6. User’s anticipated awareness of the dangers inherent in the product and their avoidability
   7. Feasibility of spreading the loss on the part of the manufacturer

Question 15

Tests to determine whether a design is defective: Consumer expectation test

Answer 15

P must prove that the product did not perform as safely as an ordinary consumer would have expected

Question 16

test to determine whether a design is defective: Combined approach

Answer 16

Risk-utility test is combined with consumer expectations test

Question 17

test to determine whether a design is defective: time of trial

Answer 17

Compares the risk and utility of the product at the time of trial

Question 18

Design defect: Feasible alternative design

Answer 18

1. A product is defective in design when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design
2. Whether D could have removed the danger without serious adverse impact on the product’s utility and price

Question 19

Design defect: State of the art

Answer 19

1. Requirement that the best scientific and medical technology that is practically and economically feasible at the time the product was made or marketed is utilized by the manufacturer
2. When a scientifically unknowable risk becomes discoverable, the manufacturer or supplier becomes liable

Question 20

Design defect: Open and obvious danger

Answer 20

Open and obvious danger is considered as a defense to a design defect case

Question 21

Design defect: Allergic reactions

Answer 21

Failure to warn issue – manufacturer only has a duty to warn of possible adverse reactions if it knew or should have known of the risks

Question 22

Inadequate warnings: definition and elements

Answer 22

1. A product is defective because of inadequate instructions or warnings when the foreseeable risks of harm posed by the product could have been reduced or avoided by the provision of reasonable instructions or warnings by the seller, and the omission of the instructions or warnings renders the product not reasonably safe
   
   1. Uses a negligence analysis
2. Unexpected danger
   
   1. The danger must be something that a reasonable user would have no reason to expect or anticipate in the product
3. Unavoidably unsafe products
   
   1. Many useful products are unavoidably unsafe, but this does not render them defective, because there is no safer way to make them
      
      1. No duty to warn of obvious dangers or of risks that are generally known (FN: Flittenberg v. Doughboy)
   2. To create liability for failure to warn of such danger, the danger must be not reasonably apparent

Question 23

Testing adequacy of warning

Answer 23

A warning may be inadequate if it is incomplete, is inconsistent with how the product is used, or does not give the reason for the warning

Question 24

Testing who must receiving warning

Answer 24

1. Usually the warning must reach the person at risk from the danger
2. Learned intermediary exception (FN: Mazur v. Merck)
   
   1. Most courts hold that as to pharmaceuticals, an adequate warning need reach only the prescribing physician
   2. Manufacturers can rely on the learned intermediary to pass on warnings
   3. Does not apply when the product is marketed directly to consumers
   4. Become less practical in recent society

Question 25

Inadequate warnings: state of the art as a defense

Answer 25

Manufacturers are not able to warn about something if they do not know the product is dangerous

Question 26

Inadequate warnings: Fault-based standard

Answer 26

D will not be held liable under an implied warranty of merchantability for failure to warn of risks that were not reasonably foreseeable at the time of sale or could not have been discovered by way of reasonable testing

Question 27

Inadequate warnings: Post-sale duty to warn/recall

Answer 27

1. Many courts impose a duty on the manufacturer to provide post-sale warnings about risks discovered after the sale
   
   1. Balancing test (obviousness of danger, burden, likelihood of harm)
2. Product recall, however, is a function of federal administrative agencies

Question 28

Proof

Answer 28

1. P is required to prove:
   
   1. The product was manufactured and sold by the defendant
   2. The product was defective
   3. The defect existed at the time the product left the factory
   4. The defect was the direct and proximate cause of the accident and injuries
2. Circumstantial evidence
   
   1. A defect may be proven by circumstantial evidence, where a preponderance of that evidence establishes that the accident was caused by a defect and not other possibilities
   2. Difficult to prove a defective product if the product is damaged or destroyed
3. Establishing proof is more difficult than establishing the legal theory
4. Evidence of subsequent improvements
   
   1. Most states do not permit the evidence of subsequent improvements to prove negligence
   2. This would discourage manufacturers from improving their products

Question 29

Defenses – Plaintiff’s Conduct: Comparative negligence

Answer 29

1. Comparing P’s negligence against D’s negligence and calculate the percent of fault
2. P’s recovery is reduced to reflect his own carelessness
3. Available as a defense for strict liability in tort
   
   1. A more equitable remedy than contributory negligence

Question 30

Defenses - Plaintiff’s Conduct: Contributory negligence

Answer 30

1. An absolute defense – if P is found to be negligent at all, D has no liability
2. The product is not defective when the injury is caused by an unreasonable misuse of the product
3. Not available as a defense for strict liability in tort

Question 31

Defenses - Plaintiff’s Conduct: Assumption of risk

Answer 31

1. When P voluntarily confronts a known hazard
2. Can be a valid defense
3. Most courts hold if a dangerous situation confronts a person who unreasonably chooses to encounter it, the defense is not assumption of risk, but comparative fault

Question 32

Defenses - Plaintiff’s Conduct: Foreseeability

Answer 32

1. The manufacturer is not liable for injuries resulting from abnormal or unintended use of his product if such use was not reasonably foreseeable
   
   1. The issue is one of foreseeability and misuse may be foreseeable
2. Obligates manufacturers to consider all possible uses of the product besides its intended use

Question 33

Defendants Other Than Principal Manufacturers

Other suppliers of chattels

Answer 33

1. Retailers of new products can also be strictly liable, as well as everybody in the product distribution chain
   
   1. They are engaged in the business of distributing goods to the public
   2. Each is a link in the chain of getting goods from the manufacturer to the ultimate user or consumer
2. The liability of a retailer arises from his integral role in the overall producing and marketing enterprise and afford an additional incentive to safety
3. Imposing liability on a retailer enables them to exert pressure on the manufacturer to enhance the safety of the product
4. Used products (Peterson v. Idaho First Nat’l Bank)
   
   1. Many courts may decline to impose strict liable on sellers of used products
   2. Second hand dealers can only be liable for negligence
   3. Occasional sellers are not subject to strict liability
5. The maker of a component part is subject to strict liability if there is a defect in that part or material
6. Successor liability
   
   1. The successor corporation is liable only if it agreed to assume liability, the transfer was a fraudulent one, the two corporations merged, or the successor is essentially a continuation of the original company

Question 34

Defendants Other Than Principal Manufacturers

Services

Answer 34

1. A provider of services, compared to a seller of a product, is not subject to strict liability for a defective product provided to the patient during the course of his or her treatment
   
   1. They are not “engaged in the business of selling” and cannot be held liable for defects in the products they are using during the course of their service
   2. The product is incidental to the service
2. Just because somebody is a supplier of a product does not necessarily mean they are a seller of the product
3. In a service transaction, there is no mass production and distribution, and hence no real ability to spread the risk of loss to consumers
4. Transactions with both a sale and a service
   
   1. Balancing test to determine which is more predominant
   2. If the prime function is a service, no strict liability
   3. If the prime function is the sale of a product, they may be subject to strict liability