Study 7 Flashcards
What is products liability?
PRODUCTS LIABILITY is not a distinct branch of law—it’s based on NEGLIGENCE and CONTRACT LAW concepts.
What basic laws are applied in products liability?
PRODUCTS LIABILITY relies on the basic concepts of NEGLIGENCE and CONTRACT LAW.
What does the study focus on regarding products liability?
The study explores how liability can arise and how INSURANCE professionals should manage it.
What’s the history behind PRODUCTS LIABILITY?
It’s about how the idea of PRIVITY OF CONTRACT has eroded, allowing consumers to sue even without a direct contract with the manufacturer.
Who can be held LIABLE in a PRODUCTS LIABILITY case?
Manufacturers, wholesalers, jobbers, repairers, installers, and retailers. Basically, anyone in the supply chain can be responsible for a defective product.
What does the LADDER OF SUPPLY illustrate?
It shows how a product moves from the manufacturer to the consumer. If a defect happens at any step, liability could fall on anyone in the supply chain.
How might an INSTALLER be held LIABLE?
If they install a product incorrectly and cause harm, they could be held responsible.
For example, if an installer wires a chandelier wrong and it causes a fire, they could be sued.
What are some examples of landmark PRODUCTS LIABILITY cases?
- MacPherson v. Buick Motor Co. (1916): A car wheel collapsed, and liability extended to the manufacturer.
- Buckley v. Mott (1919): Powdered glass in an ice cream bar led to liability for the manufacturer.
- Donoghue v. Stevenson (1932): A decomposed snail in a soft drink bottle expanded the manufacturer’s duty of care to third parties.
What’s the evolution of PRODUCTS LIABILITY?
It shifted from contract theory (only suing the seller you bought from) to TORT THEORY, which allows consumers to sue for negligence even if there’s no contract.
What’s the standard of care a manufacturer must meet?
The manufacturer must ensure their product is SAFE, with a higher standard for products used by the general public, especially for things that could harm children.
Can a breach of statute help prove NEGLIGENCE in a PRODUCTS LIABILITY case?
Yes, although it doesn’t automatically allow for a lawsuit, it can serve as evidence that the manufacturer was negligent.
How do CLASS ACTIONS affect PRODUCTS LIABILITY?
They allow multiple plaintiffs to sue together for common issues, which is useful for mass-merchandised products, leading to more lawsuits and easier access to justice.
What is the role of a LOSS PREVENTION INSPECTOR in PRODUCTS LIABILITY?
They help prevent harm by ensuring products are safe before they reach consumers, including inspecting manufacturing processes and ensuring products are free of defects.
How do manufacturers handle imported products safely?
They ensure the product’s design, testing, packaging, and labeling are safe, especially important when manufacturing is outsourced to other countries.
What’s the burden of proof in PRODUCTS LIABILITY cases?
The plaintiff must prove the manufacturer was negligent, which is tough since many hands touch a product before it reaches the consumer.
What is RES IPSA LOQUITUR?
It’s a rule that helps plaintiffs shift the burden of proof to the manufacturer, holding them liable without proof of negligence if the product must have been defective when it left the manufacturer.
Can STRICT LIABILITY be applied in PRODUCTS LIABILITY cases?
Yes, for certain dangerous products, like food and medicines, where manufacturers can be held liable even if they took reasonable care.
How does the CONTRACT THEORY of PRODUCTS LIABILITY work?
Products liability claims can arise from a breach of contract or warranty, but the PRIVITY OF CONTRACT rule means only the buyer and seller are typically bound by the contract terms.
What does provincial legislation do for PRODUCTS LIABILITY?
It provides consumers with warranties that products must meet certain standards, like being FIT for their intended use and of MERCHANTABLE QUALITY.
What does the seller need to do for a WARRANTY to apply?
The seller must rely on their SKILL and JUDGMENT to provide a suitable product.
If the seller DESCRIBES the product and gives GUIDANCE, and the buyer has a reason for purchasing, warranty applies.
What happens if the product is not fit for the purpose?
If the product’s not fit, the buyer can sue under BREACH OF CONTRACT (no need to prove NEGLIGENCE). Just show the product wasn’t up to snuff!
What’s an example of STRICT LIABILITY?
If a sofa bed collapses and injures the buyer, the buyer can sue the seller for the breach of warranty—no need to prove NEGLIGENCE.
Why does contract theory sometimes fail in product liability?
Because injured consumers can’t always sue everyone in the supply CHAIN (retailer, manufacturer, wholesaler) — it’s unfair, right?
What do special provisions in the bill of sale do?
They can LIMIT LIABILITY or change the terms of the WARRANTY (like, “we’ll fix it, but not cover injuries”… yikes!).
What does the WARRANTY of FITNESS ensure?
It ensures the product is FIT for its PURPOSE and matches the seller’s DESCRIPTION or GUIDANCE. If not, breach time!
How’s product liability different in the U.S. vs. Canada?
In the U.S., manufacturers face STRICT LIABILITY, meaning no proof of NEGLIGENCE needed. Canada’s got some strict liability too, but not as much.
What does a manufacturer do when they find a DEFECT?
They need to WARN customers and possibly issue a RECALL.
What happened with the Takata airbag recall?
Takata airbags were DEFECTIVE, leading to a massive RECALL affecting millions of vehicles.
What’s the term “SISTERSHIP” in aviation?
It’s when an airplane with a defect gets GROUNDED, and all other planes of the same model too.
What does Health Canada’s Consumer Product Safety division do?
They make sure consumer products follow SAFETY RULES.
How does cannabis affect product liability?
With legalization, cannabis manufacturers have to be extra careful—BAD product quality or misleading labels can lead to LIABILITY.
What risks do cannabis manufacturers face under the Cannabis Act?
They gotta make sure the product is GOOD QUALITY and warn consumers of any risks.
What happens if a manufacturer doesn’t warn about a product defect?
They could be LIABLE for any damages or losses.
What should manufacturers do when they find a defect in their product?
They MUST alert customers, issue a RECALL, and fix the problem.
Can a manufacturer be held responsible even if they didn’t cause the defect?
Yup! If the product’s defective, they’re still on the hook for INJURIES or damages.
Why is the concept of STRICT LIABILITY important in product lawsuits?
It means the buyer doesn’t have to prove NEGLIGENCE—just show the product was defective and caused harm.
Can a consumer sue for injuries caused by contaminated meat?
Yes, but only the buyer can sue the retailer, not their family.
Why do PRODUCT WARNINGS matter in liability claims?
They let consumers decide if they want to take the RISK.
What’s the manufacturer’s BIG DUTY with dangerous products?
To WARN consumers! The more DANGEROUS the product, the more specific the warnings must be.
Can vague warnings get the manufacturer in TROUBLE?
Yep! A general ‘keep away from flames’ is not enough for HIGHLY FLAMMABLE products.
What does “adequate warning” actually mean?
It means telling consumers exactly what the DANGER is.
What happens if a warning doesn’t cover all the dangers?
The manufacturer could be HELD LIABLE.
Can manufacturers avoid blame if the product is misused?
Maybe! If someone ignores the warning, they might be “CONTRIBUTORILY NEGLIGENT.”
What if a product causes an allergic reaction? Does that make it DEFECTIVE?
Not always! But if it’s a common issue, the manufacturer better WARN people.
Should manufacturers warn us about allergies or rare reactions?
Yep! A cream might be fine for most, but if 1 in 10,000 people break out in a rash, the maker needs to give a WARNING.
What’s CONTRIBUTORY NEGLIGENCE in a product liability case?
It’s when you mess with a product KNOWING it’s faulty.
Can someone be at fault for using a product WRONG?
Yep! If you don’t follow instructions or skip safety checks, you can be part of the problem.
What’s ABNORMAL USE?
It’s when you use a product in a totally UNEXPECTED way.
What’s the VOLUNTARY ASSUMPTION OF RISK?
If you KNOW the risks and choose to keep using the product, you can’t SUE.
What’s INTERMEDIATE EXAMINATION?
It’s when someone else checks out the product before it gets to you.
How does INTERVENING CAUSE affect product liability?
If someone ELSE messed with the product after it left the manufacturer, the manufacturer might share the blame.
What’s the LEARNED INTERMEDIARY RULE?
If a product is for experts, they’re the ones who need to know the risks, not YOU.
Can a LEARNED INTERMEDIARY be liable for failing to warn?
Nope! If the expert didn’t get the proper info, they can’t warn you properly.
How does CONTRIBUTORY NEGLIGENCE apply if you ignore warnings?
If you see a warning and STILL ignore it, you could be held responsible!
Can ABNORMAL USE be used as a defence in ANY situation?
No! If you’re doing something totally weird with a product, the manufacturer’s off the hook.
What’s an example of VOLUNTARY ASSUMPTION OF RISK in real life?
Eating a cake that looks like it might be expired but eating it anyway… and getting sick.
What does INTERMEDIATE EXAMINATION mean in the context of product liability?
If someone along the chain messed with the product before it got to you, and that’s what caused the issue, you might not be able to blame the manufacturer.
If a product is for experts, like a SURGEON, do they get to make the final call?
Yup! Surgeons, vets, or other experts get the information about a product, not the regular customer.
If a LEARNED INTERMEDIARY doesn’t do their job right, who’s at fault?
The manufacturer is! If the expert doesn’t get the necessary info about a product, it’s on the manufacturer.
Can someone sue if they didn’t read the WARNINGS but still got hurt?
It depends! If it’s an obvious danger, you might not need a warning.
What happens when a product is MISHANDLED during delivery?
If someone tampered with the product, and it caused the defect, you could have a claim against them instead of the manufacturer.
What happens when products pass through many hands?
Anyone in the supply chain might be responsible for defects that reach the consumer.
Under CONTRACT THEORY, who can sue for defects in products?
Only the purchaser! Others in the supply chain? They’re off the hook.
What’s the difference between CONTRACT THEORY and TORT THEORY in product liability?
Contract theory limits claims to the buyer. Tort theory? Anyone in the supply chain could be liable for defects.
What’s the manufacturer’s responsibility if a defect is discovered?
They’ve got to notify consumers, fix the issue, or recall the product.
Why are warnings on packaging important?
If the warnings are too vague or general, the manufacturer could be liable for accidents.
Is sensitivity to a product a reason to sue?
No, unless a large portion of the population is affected.
How does CONTRIBUTORY NEGLIGENCE come into play?
If the consumer misused the product or ignored clear warnings, they might share the blame.
What is the LEARNED INTERMEDIARY RULE?
If a product requires special knowledge, the intermediary is the one who should understand the risks and pass that info to the consumer.
Can a defence change depending on the case?
Yes! Sometimes it’s partial.
How does CONTRIBUTORY NEGLIGENCE come into play?
If the consumer misused the product or ignored clear warnings, they might share the blame. It’s not always just the manufacturer’s fault!
What is the LEARNED INTERMEDIARY RULE?
If a product requires special knowledge (like medicine), the intermediary (like a doctor or vet) is the one who should understand the risks and pass that info to the consumer. The manufacturer just has to give them the facts.
Can a defence change depending on the case?
Yes! Sometimes it’s partial, like contributory negligence. Other times it’s total, like denying the claim altogether. It all depends on the facts!
What should you do if you’re accused of a tort as a manufacturer?
You’ll need to figure out what defence works! Was it a mistake on the consumer’s part or something you missed?
Is the manufacturer always responsible for a product defect?
False. Sometimes other players in the supply chain are responsible too.
What does strict liability mean?
The manufacturer must prove the product isn’t defective. If not, they’re on the hook.
Is contributory negligence a total or partial defence?
Partial defence. The consumer’s actions might reduce the manufacturer’s liability.
If a product is safe for most, does a manufacturer have to recall it due to one allergic reaction?
False. Only if many people are affected or the reaction is severe.
Can you defend against a claim if someone misused your product?
True. If the consumer didn’t follow instructions, that can help your case.
Does the learned intermediary rule apply to all products?
False. It mostly applies to products requiring special knowledge (e.g., pharmaceuticals).
