Study 7 - Products Liability and Its Effects

Question 1

Define Privity of Contract

Answer 1

A RELATIONSHIP that exists between two parties or more by virtue of having entered into a contract

Question 2

Describe Ladder of Supply

Answer 2

Ladder of Supply describes the legal entitities between and including the Manufacturer and the Purchaser. 
Manufacturer and their agent
Manufacturer's agent
Distributer or Jobber
Wholesaler
Retailer
Installer, Inspector, or repairer
Purchaser, consumer, or user

Any entity may be held liable for damages resulting from a claim

Question 3

MacPherson v. Buick Motor Co. (1916), 217 NY 382 is a landmark case associated with what?

Answer 3

Breach of Contract - Tort.
Products liability
Dangerous thing
The car tire was a thing of danger if negligently made.
MacPherson wasn’t in contract directly with the manufacturer
The manufacturer knew that the purchaser (the dealership) was not going to be the user of the thing, and the thing was going to be used without new tests,
then irrespective of the contract the manufacturer had A DUTY to make it carefully

Question 4

Buckley v. Mott (1919), 50 DLR 408 (NSSC)

Answer 4

Same as MacPherson v. Buick Motor Co.

• Powdered Glass in an ice cream bar
• Defendant argued that there was no contract between them and the plaintiff as the contract was between the manufacturer and the retailer.
• Court says no, there is a duty of care toward the purchaser and a duty not to sell a dangerous food product

Question 5

Donoghue v. Stevenson.

Answer 5

A manufacturer owes a duty of care to ANY THIRD PARTY who might reasonably be affected by a prduct even though no contract is made between them.

The decisions of Donoghue, Buckley. v. Mowatt, and Macpherson v. Buick extended the duty of care
from the manufacturer to the purchaser and then
from the manufacturer to anyone - provided it was reasonably forseeable that such a person could suffer damages from the defect in the product

Question 6

What is Burden of Proof for products claims?

Answer 6

Burden of Proof means that the person bringing the action has the burden to prove that the defendant was negligent.

Burden of proof can be difficult for an injured consumer to establish when there are so many people on the ladder of supply between them (the purchaser) and the manufacturer. The defective product may have passed between a manufacturer to a wholesaler, distributor, retilaer ot the service, repair or maintenance entity.

Question 7

What is res ipsa loquitur?

Answer 7

Basically means that the burden of proof shifts from the injured consumer to the manufacturer to show that it was not negligent.

Holds that the accident could not have occurred without the negligence of the manufacturer. If a product is sealed in packaging when leaving the manufacturer floor then there is no other way the product could have become defective until the consumer purchased it.

This is a type of strict liability.

Question 8

Explain the importance of Lambert v. Lastoplex Chemicals Co.

Answer 8

PRODUCT LABELING

• The product’s packaging contained general warnings abou the danger of exposing the product to open flames
• Was about labelling on a can of laquer
• Used to seal flooring
• Pilot light ignited the laquer on the floor
• Caused property damage and bodily injury when the laquer ignited and the can exploded
• Manufacturer did not adequately explain the risk of having open flames around the product.
• Manufacturer only explained the product was “flammable”

Question 9

Explain Ruegger v. Shell Oil Company of Canada Ltd. and Farrow, 1963 CanLII 307 ONC SC)

Answer 9

Manufacturer of weed killer

• Found liable because warning on label warning to keep away from flowers is inadequate
• When sprayed on crops on windless day the product nonetheless damaged the plaintiffs tomato crop one quarter of a mile away

Question 10

Conforming to industry norms is NOT A DEFENCE.

Answer 10

Warning labels, the more dangerous the possible outcome the higher the onus on the manufacturer to provide a warning that will eliminate the danger.

Question 11

A DEFENSE FOR WARNING LABELS and the manufacturer of a dangerous thing is

Answer 11

when the consumer or user does not use the product in accordance with the instructions or warning accompanying it. They may be found to have CONTIBUTORY NEGLIGENCE

Question 12

Explain Discovery of Defect

Answer 12

When a manufacturer discovers there has been a defect in the product, it is the responsibility of the manufacturer to warn its customers.
- This is usually accomplished by the manufacturer using a variety of media to get the message out.