Products Liability

Products Liability

The umbrella term in tort for when one in the chain of distribution sells a product and it is defective and the defect makes it unreasonably dangerous to the user or his property, making the seller liable for harm caused

1. Negligence

2. Warranty Theory

3. Strict Products Liability

Warranty Theory

A seller/manufacturer is liable for harm due to breach of warranty. A warranty is an express or implied contractual promise at the time of sale that the product being sold will perform as represented

Essay Shell:

1. Whether x is in privity with z

   1. Seller/manufacturer: define/analyze to conclude seller is a seller/manufacturer

   2. Privity

      1. Vertical privity = the relationship between the parties in the chain of distribution of goods

      2. Horizontal privity = the relationship between the parties outside the chain of distribution

   3. Conclude

2. What kind of warranty

   1. (EW, IWM, IWFPP) pick one and analyze

   2. Conclude

Express Warranty

A promise about the character of an item made by a seller used in negotiations

Implied Warranty of Merchantability

Assumption that the product sold is reasonably fit for the general purpose for which it is manufactured and sold

Implied Warranty of Fitness for a Particular Purpose

Arises when buyer, expressly or impliedly, makes known to seller/manufacturer the particular purpose for which the product is required and it appears that the buyer relied on the seller’s skills and judgement

Strict Products Liability

Under the 402A rule, strict product liability makes the seller subject to liability for selling a product in a defective condition unreasonably dangerous to the user or consumer, even though he has exercised all possible care in the preparation and sale of the product.

The plaintiff must prove that (B-DURI):

1. seller in the business of selling or manufacturing the product placed the product into the market,

2. the product was in a defective condition,

3. the product was unreasonably dangerous,

4. the product expected to and does reach the user or consumer without substantial change, and

5. the product caused injury (actual + proximate cause)

Seller/Manufacturer

A S/M is anyone in the chain of distribution of selling the product, including the manufacturer, wholesaler and retail dealer.

Product

Any tangible property distributed commercially for consumption or use.

Defective Condition

A defective condition is when a product fails to meet the standard. There are three types of defective conditions: manufacturing defects, design defects, and warnings defects.

Manufacturing Defect

A manufacturing defect is when the product departs from its intended design even though all possible care was exercised in the preparation and marketing of the product

Design Defect

A design defect is when foreseeable risks of harm could have been reduced or avoided by using a reasonable alternative design by the seller or someone in the chain of commercial distribution

Whether or not a product is defective in design can be ascertained by analyzing the risk-utility factors (UPSEAASC):

1. Usefulness/desirability of the product,

2. probability/magnitude of potential injury,

3. availability of substitutes,

4. manufacturer's ability to eliminate the unsafe character,

5. the user's ability to avoid the danger,

6. user's probable awareness of the danger,

7. manufacturer's ability to spread the loss, and

8. the consumer expectation test in some jurisdictions

Failure to Warn Defect

A failure to warn defect is when foreseeable risks of harm or injury could have been avoided or reduced through the adoption of a reasonable warning

If its design defect AND warning: do 7+1 for design and do learned hand balancing for warning

• Whether or not a product has a warning defect can be ascertained by using the Learned Hand formula N=B<PxL

Whether or not a product is defective in design can be ascertained by analyzing the risk-utility factors (UPSEAASC):

1. Usefulness/desirability of the product,

2. probability/magnitude of potential injury,

3. availability of substitutes,

4. manufacturer's ability to eliminate the unsafe character,

5. the user's ability to avoid the danger,

6. user's probable awareness of the danger,

7. manufacturer's ability to spread the loss, and

8. the consumer expectation test in some jurisdictions