Chapter 7. BUSI Law Strict Liability and Product Liability

Strict Liability

Legal responsibility for harm regardless of fault.

Abnormally Dangerous Activity

An activity that creates a high risk of serious harm and cannot be made completely safe with reasonable care.

Example of Abnormally Dangerous Activity

Storing explosives.

Wild Animal Liability

A person may be strictly liable if a wild animal causes harm.

Strict Product Liability

Manufacturers and sellers may be responsible for injuries caused by defective products.

Product Liability

Legal responsibility when a product causes physical injury or property damage.

Four Product Liability Theories

Negligence, misrepresentation, strict liability, and warranties.

Negligence

Failure to use the level of care a reasonable person would use.

Due Care

Reasonable care used when designing, making, testing, inspecting, and warning about a product.

Privity of Contract

A direct legal relationship between parties to a contract.

Product Liability and Privity

An injured person does not have to be the person who purchased the product.

Cause in Fact

The injury would not have happened but for the defendant's action.

Proximate Cause

The defendant's conduct is legally connected closely enough to the injury to create liability.

Misrepresentation

A false statement about an important fact made knowingly or recklessly.

Misrepresentation Requirement

The seller must intend for the buyer to rely on the false statement, and the buyer must actually rely on it.

Example of Misrepresentation

Intentionally mislabeling packaged cosmetics.

Strict Product Liability

Liability for injuries from defective products without proving ordinary negligence.

Public Policy

The law supports strict product liability to protect consumers from unsafe products.

Reason for Strict Product Liability

Manufacturers and distributors are better able to handle and spread the costs of product injuries.

Six Requirements for Strict Product Liability

Defective product, seller in the business of selling it, unreasonably dangerous, physical injury or property damage, proximate cause, and no substantial change after sale.

Defective When Sold

The product must have been defective when it left the seller or lessor.

Unreasonably Dangerous Product

A product that is more dangerous than an ordinary consumer would expect.

Alternative Design

A safer and economically reasonable design that could have been used.

Three Types of Product Defects

Manufacturing defects, design defects, and inadequate warnings.

Manufacturing Defect

A product does not match its intended design because it was made, assembled, tested, or inspected incorrectly.

Design Defect

The product was made according to its design, but the design itself is unsafe.

Inadequate Warning

Instructions or warnings fail to properly explain foreseeable dangers.

Reasonable Alternative Design

A safer design that could reasonably have been used.

Risk-Utility Analysis

Compares the risks of a product's design with its usefulness.

Consumer-Expectation Test

A product is defective if it is less safe than an ordinary consumer would reasonably expect.

Warning Requirement

A warning must be connected to the injury to create liability.

Adequate Warning

A warning that reasonably informs consumers about a product's risks.

Warning Factors

Courts may consider the risk, clarity, strength of the warning, and characteristics of expected users.

Obvious Danger

Manufacturers generally do not have to warn about dangers that are obvious or commonly known.

Market-Share Liability

Liability divided among companies when the exact manufacturer of the harmful product cannot be identified.

Bystander Liability

Strict product liability can protect people injured by a defective product even if they did not buy or use it.

Component-Part Liability

A company that supplies a defective part may be liable for injuries caused by that part.

Product Liability Defense

An argument that the plaintiff failed to prove a required part of the claim.

Negligence Defense

The defendant may argue that the plaintiff failed to prove causation.

Strict Liability Defense

The defendant may argue that a required element of strict liability is missing.

Preemption

Federal laws or regulations may prevent certain state product liability lawsuits.

Federal Preemption

A state claim may be blocked when federal law already provides comprehensive regulation of the product.

Assumption of Risk

A defense where the plaintiff knew and understood the danger and voluntarily accepted the risk.

Two Requirements for Assumption of Risk

The plaintiff knew the danger and voluntarily accepted the risk.

Product Misuse

Using a product in a way the manufacturer did not intend.

Foreseeable Misuse

If misuse was reasonably foreseeable, the seller may still be liable unless reasonable steps were taken to prevent harm.

Comparative Negligence

A rule that considers both the plaintiff's and defendant's actions when deciding liability and damages.

Comparative Fault

The plaintiff's damages may be reduced if their own actions contributed to the injury.

Comparative Negligence Effect

It may reduce damages but does not always completely remove the defendant's liability.

Commonly Known Danger

A danger an ordinary person is expected to already understand.

Examples of Commonly Known Dangers

Matches and sharp knives.

Commonly Known Danger Defense

Manufacturers generally do not have to warn about obvious risks.

Knowledgeable User

A professional or experienced person expected to understand certain product dangers.

Knowledgeable User Defense

A manufacturer may not need to warn users about dangers they already know or should know.

Example of Knowledgeable User

An electrician is expected to understand the danger of electrical shock.

Statute of Limitations

The time period during which an injured person must file a lawsuit.

Product Liability Statute of Limitations

Often two to four years, depending on state law.

Tolling

Temporarily pausing the statute of limitations.

Statute of Repose

A final deadline for filing a claim, usually based on when the product was sold.

Statute of Limitations vs. Repose

Limitations usually focuses on when the injury is discovered; repose usually focuses on an earlier event such as when the product was sold.