Products Liability

Question 1

Definition

Answer 1

Persons who manufacture, sell or otherwise place in the stream of commerce products which are dangerous or defective may be held liable for personal injury or property damage resulting from the use of such products.

Question 2

Possible Theories of Liability

Answer 2

Determine from the facts which theories require discussion. Compartmentalize your answer into theories and apply the elements for each theory. Intentional tort, negligence, express warranties, implied warranties and strict liability

Question 3

Intentional Tort

Answer 3

Treat as a battery

Question 4

Negligence - Elements

Answer 4

Duty, breach, actual cause, proximate cause and damages

Question 5

Negligence - Duty

Answer 5

Duty is owed to those who may foreseeably come into contact with the product. Includes purchasers, users, bystanders, etc. The duty is owed by everyone in the chain of distribution.

Question 6

Negligence - Breach

Answer 6

Did the defendant market the product in a reasonable manner? Analyze what defendant did relative to the marketing of the product which could be construed as unreasonable. For example, it is difficult to hold the wholesaler or retailer liable unless facts clearly disclose that the faulty product was due, in part, to their conduct (goods purchased from an unreliable source, complaints are received from customers, situations where the dealer would normally inspect the product). If you have difficulty establishing breach, look to res ipsa Loquitur.

a. Design.
b. Manufacture.
c. Warnings.
d. Unreasonable or improper inspection.

Question 7

Negligence - Actual cause, proximate cause, damages

Answer 7

Actual Cause.

Proximate Cause (dealer’s failure to inspect is not superseding but if dealer knows of danger, defendant manufacturer can argue dealer’s conduct is intervening).

Damages – personal injury and property damages are recoverable but not loss of profits due to the faulty product.

Question 8

Negligence - Defenses

Answer 8

Same as for common law negligence

Question 9

Breach of express warranty - definition

Answer 9

Promise stated in words or a substitute for words about the product. If the warranty is breached causing damage or injury to the purchaser who relies on the promise, that purchaser has a direct action against the seller

Question 10

Breach of express warranty - elements

Answer 10

1. Express warranty made by any seller which is breached.
2. Must be a misrepresentation of a material fact justifiably relied upon.
3. Three alternatives as to who may be a plaintiff:
   a. Family or guests of the immediate buyer who are personally injured;
   b. Any natural person who may be reasonably expected to use, consume or be affected by the goods and who suffers personal injury;
   c. Any person who may be reasonably expected to use, consume or be affected by the goods and who is injured.
4. Actual cause.
5. Proximate cause.
6. Damages.

Question 11

Breach of express warranty - defense

Answer 11

1. Contributory negligence – is not a valid defense.
2. Comparative fault - probably (state by state analysis).
3. Assumption of the risk – is a valid defense.
4. Disclaimers – may be a valid defense unless the disclaimer is unconscionable. For example, disclaimers relating to personal injury arising from use of consumer goods are unconscionable.
5. Notice requirement – is a valid defense.
6. Misuse i.e., improper and unforeseeable misuse of the product – is a valid defense.

Question 12

Implied warranty of merchantability

Answer 12

If a merchant deals in a type of goods there is a warranty that those goods are fit for ordinary use

Question 13

Implied warranty of fitness for a particular purpose

Answer 13

Where the seller knows or has reason to know that the buyer is purchasing goods for a particular purpose and the buyer is relying on the seller’s skill or knowledge, there is an implied warranty that the goods are fit for that purpose.

Question 14

Breach of implied warranty - elements

Answer 14

1. Sale of goods by dealers.
2. Implied promise of the defendant that the goods are merchantable or fit for a particular purpose and that promise is untrue. This is a form of strict liability. If the product is defective and the warranty is breached, defendant is liable whether or not he acted reasonably.
3. Three alternatives as to who may be a plaintiff:
   a. Family or guests of the immediate buyer who are personally injured;
   b. Any natural person who may be reasonably expected to use, consume or be affected by the goods and who suffers personal injury;
   c. Any person who may be reasonably expected to use, consume or be affected by the goods and who is injured.
4. Actual cause.
5. Proximate cause.
6. Damages.

Question 15

Breach of implied warranty - defenses

Answer 15

1. Contributory negligence – is not a valid defense.
2. Comparative fault - probably (state by state analysis)
3. Assumption of the risk – yes
4. Disclaimers – may be a valid defense unless the disclaimer is unconscionable. For example, disclaimers relating to personal injuries arising from consumer goods are unconscionable.
5. Notice requirement – is a valid defense.
6. Misuse i.e., improper and unforeseeable misuse of the product – is a valid defense.

Question 16

Strict products liability - definition

Answer 16

Liability imposed without fault against manufacturers and suppliers of defective products for injuries cause by the defect. Strict products liability differs from strict liability because with strict products liability plaintiff still has to prove that the product was defective and the defect caused the injury. Differs from negligence because with strict products liability plaintiff does not have to prove the defendant acted unreasonably (breach). All you have to prove is that the product was defective and the defect caused the injury. Differs from warranty because privity is not required and disclaimers do not apply. Liability without fault is a matter of public policy due to the grave risk of harm of placing dangerous products into the stream of commerce.

Question 17

Strict products liability - elements

Answer 17

Absolute duty, parties who may bring the action, must be a product, product was defective and defect existed when it left defendants control, actual cause, proximate cause and damages

Question 18

Strict products liability - Absolute duty

Answer 18

Absolute duty owed by a commercial supplier (all participants in the marketing chain are potential defendants) to provide a product free of any unreasonably dangerous defect if the product reaches the plaintiff without substantial alteration and is not misused. But liability is not absolute. Plaintiff must still prove the product is defective and the defect was the actual and proximate cause of his injury.

a. According to the Restatement unreasonable danger is required. b. In California (strong minority) the plaintiff must prove the defect and cure of the defect are not cost prohibitive.

Question 19

Strict products liability - parties who may bring the action

Answer 19

anyone who could foreseeably come into contact with the product.

Question 20

Strict products liability - must be a product

Answer 20

may apply to products in their natural state (foods) but does not apply to services. Be careful with situations involving both a product and service

Question 21

Strict products liability - Product was defective

Answer 21

Product was defective and defect existed when it left defendants control – a reasonable person would not have placed the product in the stream of commerce if the defect was known to exist. This means that knowledge of the defect is presumed at the time the product is offered for salea.

a. Manufacture – defect with one or some products rather than the entire product line.
b. Design defect – feasible alternatives; consumer expectations; purpose of the product. Design defect is generally treated as a negligence (unreasonable conduct claim).
(1) Feasible alternatives – whether the defendant could have removed the danger without serious adverse impact on the product’s utility and price.
(2) Consumer expectation – product did not perform as safely as an ordinary consumer would have expected.
c. Warnings – inadequate or not present. Generally treated as a negligence (unreasonable conduct claim).
d. Unreasonable inspection.
e. Problem areas:
(1) Foreseeable misuse.
(2) Abnormal reactions (highly unusual reaction vs. reaction as a known risk of harm).
(3) Change in what is knowable. Duty to warn about safety hazards discovered after the sale.
(4) Unavoidably unsafe product.

Question 22

Strict products liability - Actual cause, proximate cause, damages

Answer 22

5. Actual cause.
6. Proximate cause.
   a. Would warning have made a difference?
   b. Physicians or pharmacist may be an intervening force between drug manufacturer and user.
7. Damages – damage to person and property are recoverable but not economic loss.

Question 23

Strict products liability - defenses

Answer 23

1. Contributory negligence – is not a valid defense except for unforeseeable misuse.
2. Assumption of the risk – is a valid defense.
3. Comparative fault – may be a valid defense (state by state).
4. Disclaimer – is not a valid defense because generally against public policy.
5. Unreasonable and unforeseeable misuse – is a valid defense (Ford v. Matthews).
6. Notice requirement – is not a valid defense.