blaw products liability

Products liability law

body of legal rules governing civil lawsuits for losses and harms from defendant’s furnishing of defective goods

caveat emptor(Buyer beaware)

prior rule to products liability

caveat venditor (let seller beware)

shifted over to this over past century since sellers are better able than consumers to bear costs of defective products

theories of product liability recovery

• product liability law is partly grounded in contract law and partly grounded in tort law

• contract theories are based on an express or implied warranty

• tort theories based on arguments of negligence or strict liability

express warranty can be created in any of the three way under UCC

• if seller makes a specific statement or promise about the product and that statement is part of why the buyer decides to purchase ex: 12 hr of battery life

• seller describes the product and that description influences the buyer's decision ex: 100% cotton

• If the seller shows a sample or model of the product it creates a warranty that the actual product delivered will be the same as the sample

implied warranties

created by operation of law rather than seller’s express statements

2 types of implied warranties

• warranty of merchantability

• warranty of fitness for a particular purpose

warranty of merchantability

Sellers must be professionals in selling this type of product, and the product must be good enough to do what it’s normally supposed to do.

warranty of fitness for a particular purpose

1. Seller has reason to know a particular purpose for which buyer requires goods

2. seller has reason to know buyer is relying on sellers’s skills for selection of suitable goods

3. buyer actually relies on seller’s skill/judgement in puchasing

product liability: negligence claims

• negligent manufacture of goods(include improper materials and packaging)

• negligent inspection

• negligent failure to provide adequate warnings

• negligent design

negligence design factors

• magnitude or severity of harm

• industry practices

• state of art (existing technical knowledge)

• risk-utility test (also used in strict liability design defect claims)

strict product liability published 1998

• does not require product to be unreasonably dangerous to get a strict liability claim through

• covers manufacturers and sellers down supply chain

• includes manufacturing defects, inadequate instructions/warning design defect and risk-utility test

2 primary test for design defect

• consumer expectations- if a product is unreasonably dangerous because it didn’t work as safely as an average consumer would expect. It doesn’t apply to complex products

• risk utility- whether the product’s benefits are worth the risks. The plaintiff must show that the risks of the design outweigh its advantages.

4 standards modes of recovery

1. express warranty contract

2. implied warranty contract

3. negligence tort law

4. strict liability tort law

Other theories of recovery

• Federal magnuson-moss warranty act

• industrywide liability

federal magnusos-moss warranty act

• applies to sales of consumer products more than $10 per item

• if seller makes limited warranty, they are bound to that promise

• full warranty promise to..

  1. remedy any defects in product

  2. replace product or refund purchase price if, after reasonable number of attempts, it cannot be repaired

industrywide liability

plaintiff is harmed by a product made by multiple companies within the industry and it’s impossible to know the specifics so they all share responsibility and law can hold them all accountable

Damages in product liability

1. basis of the bargain damages

2. consequential damages

basis of the bargain damages in product liability

If you buy a product, but it’s defective and doesn’t work as it was supposed to, you’ve lost part of the value you paid for.(almost never awarded in tort cases) This loss is calculated by comparing:

• What the product was supposed to be worth (as promised)

• What it’s actually worth in its defective state (as received)

consequential damages

extra losses suffered from what you bought or contracted for such as, personal injury, property damage, indirect economic loss and nonecoonomic loss

punitive damages

intended to punish defendants who have acted in an especially outrageous fashion, and to deter them and others from acting so in the future

Vertical privity

connection up and down the supply chain

horizontal privity

who else is affected by the product outside of the buyer-seller relationship

product liability disclaimer

clause where sellers try to limit their responsibility if a product causes issues. For implied warranty disclaimers, sellers must use the word "merchantability" and make the disclaimer clear and noticeable.

limitation of remedies

where the seller sets limits on what the buyer can do if something goes wrong with the product. Instead of allowing full compensation for damages, the seller might specify certain remedies; very likely to be unconscionable when plaintiff suffered personal injury

3 main defenses in product liability lawsuit

• product misuse

• assumption of risk

• comparative negligence

CONLAW intersection

federal law overrides state law when the two conflict