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52 Cards in this Set

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Products Liability Overview
The law of product liability focuses on the liability of a supplier of a product for the physical harm to person or property caused by defects in the product. If the product simply does not perform as well as expected, causing purely economic loss to the buyer, this is primarily a “sales” problem, and is usually addressed through breach of contrary or warranty.
Strict Product Liability
In recent years, most courts have entirely bypassed warranty and negligence concepts, and have held manufacturers and suppliers of defective products strictly liable in tort to consumers and users for injuries caused by the defect.
The rule is that “a manufacturer is strictly liable in tort when an article he places on the market, knowing that it is be used without inspection for defects, proves to have a defect that causes injury to a human being.” Greenman v. Yuba Power Products.
Rationale for Strict Liability
Courts have articulated several policy reasons for imposing strict liability on manufacturers for injuries caused by their products. First, a defendant manufacturer is usually better able to distribute (or insure against) the risk of loss than is the innocent consumer. Second, negligence is often too difficult to prove in product cases to be an adequate remedy. Finally, imposing strict liability may increase the incentive for the manufacture and supply of safer products.
Strict Product Liability Not Absolute
Strict liability doctrine requires the plaintiff to prove both a defect in the product that is attributable to the manufacturer or supplier, and that the defect caused the injury. Hence, although liability is strict, it is not absolute.
3 Kinds of Product Defects
A product may be defective in manufacture, in design, or in the sufficiency of the warnings accompanying it.
Manufacturing Defect
A product contains a manufacturing defect when the product does not meet the manufacturer's own specifications for the product, even if all possible care was exercised in the production and marketing of the product.
Design Defect
A product can also be defective if its design makes it unnecessarily dangerous to the user. The question is: how does one distinguish acceptable designs from those that are unacceptably dangerous?
Consumer Expectations Test
The consumer expectations test provides that a product is "unreasonably dangerous" if it did not perform as safely as an ordinary consumer would have expected.
Risk/Utility Test
The risk/utility tests states that a product is defective as designed only where the magnitude of the hazards outweighs the individual utility or broader social benefits of the product. The risk/utility test posits, in effect, that only reasonably safe products should be marketed, and defines reasonably safe products as those whose utility outweighs the inherent risk, “provided that risk has been reduced to the greatest extent possible consistent with the products continued utility.”
The Barker Test
Under the test put forth in Barker v. Lull Engineering, a product is defective in design: (1) if the plaintiff demonstrates that the product failed to perform as safely as an ordinary consumer would expect when used in an intended and reasonably foreseeable manner; or (2) if the plaintiff proved that the defective product proximately caused his injuries and the DEFENDANT fails to prove that, on balance, the benefits of the challenged design outweigh the risks inherent in such a design.
Factors to Consider in Risk/Utility Analysis
(a) The gravity of the danger posed by the challenged design; (b) the likelihood that such danger would occur; (c) the mechanical feasibility of a safer alternative design; (d) the financial cost of an improved design; and (e) the adverse consequences to the product and to the consumer that would result from an alternative design.
Limitation-- Dangerous Product
A product, such as a handgun or knife, that functions as intended and is dangerous in its ordinary use, has no defect and cannot give rise to liability based on the defect.
Dangers not Foreseeable at Time of Marketing
The overwhelming view denies strict liability where the danger was something the manufacturer could not have guarded against “by the application of reasonably developed human skill or foresight.”
Warning Defects
In addition to the product itself, defects may arise from packaging and inadequate warnings, labels, etc. Inadequate warnings may make a product defective when the dangers are not apparent to ordinary consumers.
The Adequacy of Warnings
A warning may be inadequate if, for example, it does not specify the risk the product presents, it is inconsistent with how the product is to be used, or it does not give the reason for the warning. A warning must clearly alert the user to the risk and how to avoid it.
Parties Liable—Commercial Suppliers
Any party who causes the product to “enter the stream of commerce” or “passes it on” in the stream of commerce, i.e. all participants in the marketing of the product—may be held liable.
Liability—Assemblers of Component Parts
As in negligence cases, the manufacturer is responsible for the safety of all component parts. Hence, although the manufacturer only assembles those parts into a finished product, she can be held strictly liable for defective component parts supplied by others. The seller of a defective part, of course, may also be held liable.
Liability—Noncommercial Suppliers:
Strict liability applies only to persons engaged in the business of manufacturing, selling, or leasing the product in question. Thus, persons who make only an occasional sale would not be liable on this theory.
Parties Who May Invoke Liability
Purchasers, ultimate users, and bystanders may invoke the doctrine of strict liability. In short, virtually all states hold that any person injured by a defective product can invoke strict tort liability.
Liability Extends Only to Products
Strict tort liability applies only where the injuries or damages have resulted from a defective product. Strict product liability does not apply to the rendition of services, any more than does warranty liability.
Liability Extends only to “Defective” Products
The greatest difficulty is determining what makes a product “defective” for purposes of imposing strict liability. The first step in this is to determine the type of defect at issue (i.e., manufacturing, design, or warning); the second step is to determine the standard to be used to determine the defect.
California Approach (Defect Alone)
Under the California approach, an action can lie for an injury resulting from a defect even if the defect was not foreseeably dangerous. For example, when the racks in the back of a bakery truck came loose in a crash, hurling the driver through the windshield, the driver needed only to prove that defective metal clamps caused the dislodging in order to establish the required defect. He did not need to show that it was foreseeable that such clamps posed a risk of personal injury. Cronin v. JBE Olson.
Misuse
Regardless of what kind of “defect” is claimed, it must have arisen during the normal or foreseeable use of the product. A manufacturer is not to be held liable for all possible harms caused by its product, but only for harms caused through its intended or foreseeable use. For example, a car manufacturer is not strictly liable for a car goes out of control at 115 mph, because driving that fast was neither an intended nor foreseeable use of the car.
“Normal” Use
Normal use has a broader meaning than “intended use.” A product may involve no risk of harm when used as intended, but a serious risk when used for other purposes (e.g., laundry products may be safe when used for cleaning purposes, but may contain chemicals that could be fatal if swallowed by children). A manufacturer must foresee a certain amount of misuse or carelessness by customers, and thus must warn them of any dangers that could be created by such use, or must build into the product appropriate safety devices. To the extent unintended uses are reasonably foreseeable, the product may be adjudged “defective” if adequate warnings are not given or if feasible safety measures are not taken (e.g., the use of a child-proof top).
Abnormal Reactions
Highly unusual reactions to a product do not render it defective. However, this refers only to situations where a plaintiff’s reaction is so bizarre or unexpected that a it could not reasonably have been anticipated or guarded against.
Distinguish—Not Highly Unusual Reaction
If an adverse reaction is shared by a significant number of potential users—even a small percentage—the manufacturer must guard against the risk by changing the product, warning of the danger, or suggesting methods by which users can safely determine their own reactions (e.g., patch tests).
Proof Required
The burden is on the plaintiff to prove that: (i) the product was in fact defective when it left the defendant’s control; and (ii) a causal relationship to the plaintiff’s injury. Often, expert witnesses are required.
Cause-in-Fact
The plaintiff must show that the injuries were caused by some defect in the product that existed at the time that it was marketed by the defendant. It is sufficient that the defect was a substantial factor in causing the injury.
Cause-in-Fact: Warning Defects
In warning cases, the plaintiff must show that an adequate warning would have caused the plaintiff to either use the product in a safer manner, or refrain from using the product altogether. This can be quite difficult.
Lack of Safety Features
A defendant manufacturer may be liable where it failed to provide safety features that decreased the severity of injuries from inevitable accidents—even where the product did not cause the accident. For example, a lawnmower manufacturer may be held strictly liable where a riding lawnmower lacks a “deadman device” that would have lessened the severity of plaintiff’s injuries when mower tipped over.
Proximate Cause
If other causes are proved, their effect on causation is determined by the same proximate cause tests applicable in negligence cases.
Damages: Personal Injury (or Death)
Pain and suffering caused by injury from the defective product are recoverable, together with all damages consequential thereto—medical expenses, loss of income, etc. And if the injury results in death, a wrongful death action will lie.
Damages: Property Damage
Physical damage to other property is recoverable in almost all states.
Damages: Economic Losses
Most courts, however, do not allow recovery in tort for purely economic losses (e.g., product does not perform well, and purchaser is deprived of profits she expected to make through its use or is forced to incur additional expenses to make it work, etc.). The purchaser’s right to recover such losses is more of a sales problem than a torts problem, and she usually is limited to a contract action against the person who sold her the product (or, if there are warranties running from the manufacturer, against the manufacturer as well).
Misrepresentation
If the product has been advertised or represented to perform according to certain specifications, there may be a possibility of recovery in tort for misrepresentation.
Economic Loss as Part of Other Action
If the plaintiff suffers personal injury or property loss, all states permit economic loss to be recovered in tort with the other damages under strict liability.
Defenses to Strict Liability-- Comparative Fault
Most comparative negligence states reduce the plaintiff’s recovery in strict liability cases by some amount to reflect the fact that the injury was caused in part by the plaintiff’s own carelessness.
Defenses to Strict Liability-- Assumption of Risk
One who knows of the danger or risk involved, and unreasonably continues to use the product, may be held to have assumed the risk.
Assumption of Risk-- Adequacy of Warning
The crucial issue, of course, is the adequacy of the warning given. Courts tends to be demanding in judging this factor, holding the warning inadequate if it was either incomplete (as where the manufacturer disclosed some, but not all, of the risks), or was “watered down” by the user’s own sales promotion, which had the effect of persuading users to disregard the warning.
Limitation—Voluntary and Knowing Assumption of the Risk Required
The injured party must actually have known of the particular danger involved and decided to face it. If the injured party had no option but to use the risky product, there was no assumption of risk.
****BREACH OF WARRANTY****
Rather than relying on negligence or strict liability as the basis for liability, courts may impose liability for breach of warranty in a contract action. A warranty may be either express or implied.
Express Warranty
Whatever a seller represents to a purchaser about the product involved (by advertising or whatever) may be an express warranty, i.e. a part of the contract. And if the warranty is breached (the product is not as represented), causing damage or injury to the purchaser relying on the representation, that purchaser has a direct action against the seller on the contract.
Implied Warranty
However, most warranty actions are based on implied warranties—the assurance (implied in law) from the seller to the buyer that the product purchased will do no harm in normal use.
Implied Warranty- Fitness for a Particular Purpose
If the seller knows, or has reason to know, that the buyer is purchasing the goods for a particular purpose, there is an implied warranty that the goods sold are in fact fit for that purpose.
Implied Warranty-- Merchantability
If goods are supplied by one who deals in goods of that kind, a warranty is implied that they are of at least “fair average” quality, i.e. fit for ordinary purposes.
Breach of Warranty-- Transaction Covered
The UCC applies only to the sale of goods (i.e., personal property). Warranties will not be implied in contracts for services. Any liability for injuries sustained as the result of improper services rendered must
Breach of Warranty-- Blood
Almost all states have legislation barring warranty suits by persons who have received infected blood in a transfusion.
Breach of Warranty-- Defendants Must be "Dealers"
Liability for implied warranties generally is imposed only on those who “deal” regularly in the product. Thus, for example, it generally does not apply to a person who sells his car or stereo system to a neighbor.
Effect of Breach of Warranty
Liability for breach of warranty is really a form of strict liability. If the product is defective, the warranty is breached and the manufacturer is automatically liable—whether or not due care was exercised in its manufacture, or the manufacturer was otherwise “at fault.”
Breach of Warranty: Requirement of “Privity of Contract”:
The traditional problem with basing liability on breach of warranty is that it is a contract action, so that “privity of contract between the injured party and the party sought to be held liable for injuries must normally be shown. Today, however, many courts have expanded this to hold that implied warranties arising from the sale of a dangerous product extend not only to the purchaser or user of such products, but also to all persons within the foreseeable scope of use. A few states have even gone further to abolish this requirement of privity.
Defenses to Warranty Actions-- Comparative Negligence
Most courts have developed a defense of comparative negligence for warranty actions.
Defenses to Warranty Actions-- Assumption of Risk
If the plaintiff actually discovers a defect and unreasonably uses the product in its defective condition, assumption of the risk is a complete defense in warranty actions.