RSM225 Lecture 6

Products liability

• Liability of manufacturers for injury or losses arising from defects in products

• Manufacturer have a duty of care to all those who use the product and are injured.

Burden of Proof

• All X has to prove is that the product caused the harm. 

• Then the manufacturer will have to show: 

  • The cause of the defect is not something for which it should be liable 

  • The manufacturer took all reasonable precautions to prevent the defective product from reaching X

Duty to Warn - Manufactuers

• Even if the product is not inherently defective, if there are dangers, the manufacturer must warn of them 

• The duty to warn is continuous – once product placed in market, if manufacturer learns of potential defect, it must issue appropriate warnings 

• Sometimes duty can be discharged by issuing the warning to a learned intermediary

Occupier’s Liability

• Duty of owner or occupier of land to visitors

• Owner or occupier must not be negligent concerning dangers on the property

• As for trespassers, the duty is generally not to deliberately harm the trespassers.

  • Duty of “common humanity”

• Public Nuisance

• Interference with lawful use of public amenities (e.g. blocking a public road)

Private Nuisance

• Interference with an occupier’s use and enjoyment of his/her land 

• Occupiers have right to enjoy land free from interference (e.g. noxious fumes, excessive noise, contaminants in soil or water) 

• Occupier right is not absolute – Courts consider degree of interference vs. and how economically useful the interfering activity is 

Defamation

• Making an untrue statement that injures the reputation of a person

• Libel (written) and slander (spoken) 

• Absolute defense = TRUTH

3 Economic Torts

• Intentional interference with contractual relations, inducing breach of contract 

  • A induces B to breach a contract with C, such an inducing B to come and work for A

• Product defamation 

  • Making false or damaging statements about the products of another 

• Passing off 

  • Representing your goods as the goods of another 

  • Can also use trademark law to protect your goods through registering distinguishing marks

Remedies in Tort

• Normal remedy is damages for losses 

  • Damages are calculated to put the injured party in the same position that party would have been in had the tort not occurred 

  • In general, no attempt to punish by awarding damages, but punitive or exemplary damages may be awarded for especially egregious conduct

Kinds of Damages

• Special damages 

  • Damages to compensate for quantifiable losses, such as lost wages or specific expenses 

• General damages 

  • Damages at large, for losses or injury caused by the harm that cannot strictly be quantified

Duty of Professionals

• 3 bases for duties owed by professionals: 

  • Contract 

  • Fiduciary Duty 

  • Tort (negligence or other)

Fiduciary Duty

• Duty owed by virtue of special relationship of trust

• Fiduciary has some scope to exercise discretion or power that can be exercised to affect the beneficiary’s legal or practical interests

• Beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary

Duty & Standard of Professionals

• Standard = “reasonable professional”

• Can look to codes of ethics and professional conduct standards to help determine what is reasonable

• The duty to take reasonable care includes the duty not to omit essential steps in providing services and not to omit essential information