Chapter 6 Strict Liability and Product Liability 2004
Chapter 6 Strict Liability and Product Liability © 2004 West Legal Studies in Business A Division of Thomson Learning 1
§ 1: Strict Liability üTheory of strict liability started with Rylands v. Fletcher (1868 England). üDefendant’s liability for strict liability is without regard to: Fault, Foreseeability, Standard of Care or Causation. üLiability is based on abnormally dangerous activities. © 2004 West Legal Studies in Business A Division of Thomson Learning 2
Abnormally Dangerous Activities Defendant is strictly liable for an “abnormally dangerous activity” if: § Activity involves serious potential harm; § Activity involves high degree of risk that cannot be made safe; and § Activity is not commonly performed in the community or area. © 2004 West Legal Studies in Business A Division of Thomson Learning 3
Wild Animals üPersons who keep wild animals are strictly liable for injuries caused by the beast. üPersons who keep domestic animals are liable if the owner knew or should have known that animal was dangerous. © 2004 West Legal Studies in Business A Division of Thomson Learning 4
§ 2: Product Liability üProduct Liability is not a new tort. üLiability can be based on: § § Negligence; Misrepresentation; or Strict Liability; Warranty Theory. © 2004 West Legal Studies in Business A Division of Thomson Learning 5
Product Liability (Negligence) ü Negligence-based product liability is based on a manufacturer’s breach of the reasonable standard of care and failing to make a product safe. üCase 6. 1: Jarvis v. Ford Motor Co. (2002) © 2004 West Legal Studies in Business A Division of Thomson Learning 6
Product Liability (Negligence) üManufacturer must exercise “due care” in: § § Designing products; Manufacturing and Assembling Products; Inspecting and Testing Products; and Placing adequate warning labels. © 2004 West Legal Studies in Business A Division of Thomson Learning 7
Product Liability (Negligence) üManufacturers who violate state or federal law in the manufacture or labeling of a product, may be negligent per se. üNo privity of contract required between Plaintiff and Manufacturer. Liability extends to any person’s injuries caused by a negligently made (defective) product. © 2004 West Legal Studies in Business A Division of Thomson Learning 8
Product Liability (Misrepresentation) üOccurs when fraud committed against consumer or user of product. üFraud must have been made knowingly or with reckless disregard for safety. üPlaintiff does not have to show product was defective. © 2004 West Legal Studies in Business A Division of Thomson Learning 9
§ 3: Strict Product Liability üManufacturers liable without regard to fault based on public policy: § Consumers must be protected from unsafe products; § Manufacturers should be liable to any user of the product; § Manufacturers, sellers and distributors can bear the costs of injuries. © 2004 West Legal Studies in Business A Division of Thomson Learning 10
Strict Product Liability üRequirements for strict liability: § Product is unreasonably dangerous when sold Defendant sells the product; § Plaintiff injured by use or consumption of product and defective condition is the proximate cause of injury. üCase 6. 2: Greenman v. Yuba Power Products (1962). © 2004 West Legal Studies in Business A Division of Thomson Learning 11
Requirements for Strict Product Liability Plaintiff must show product was so “defective” it was “unreasonably dangerous”: § § § Product must be in defective condition when sold. Defendant is in the business of selling the product. Product must be unreasonably dangerous. Plaintiff must be physically harmed Defective condition must be proximate cause of injury. § Goods are in substantially same condition. © 2004 West Legal Studies in Business A Division of Thomson Learning 12
Market Share Liability üTheory of liability when multiple Defendants contributed to manufacture of defective product. üLiability of each Defendant is proportionate to the share of the market held by each respective Defendant. © 2004 West Legal Studies in Business A Division of Thomson Learning 13
Product Defects üThree types of product defects: § Manufacturing defects. § Design defects. § Warning Defects © 2004 West Legal Studies in Business A Division of Thomson Learning 14
Strict Liability: Manufacturing Defects üOccurs when a product “departs from its intended design even though all possible care was exercised in the preparation and marketing of the product. ” © 2004 West Legal Studies in Business A Division of Thomson Learning 15
Strict Liability: Design Defects üOccurs when the “foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative. . . and the omission of the alternative design renders the product not reasonably safe. ” © 2004 West Legal Studies in Business A Division of Thomson Learning 16
Strict Liability: Warning Defects üA product may be defective because of inadequate warnings or instructions. üLiability based on foreseeability that proper instructions/labels would have made the product safe to use. üCase 6. 3: Liriano v. Hobart Co. (1999). © 2004 West Legal Studies in Business A Division of Thomson Learning 17
Warning Defects üThere is no duty to warn about obvious or commonly known risks. üSeller must also warn about injury due to product misuse. Key is whether misuse was foreseeable. © 2004 West Legal Studies in Business A Division of Thomson Learning 18
§ 4: Defenses to Product Liability üAssumption of Risk. üProduct Misuse (Plaintiff does not know the product is dangerous for a particular use). üContributory/Comparative Negligence. § Case 6. 4: Smith v. Ingersoll-Rand Co (2000). üCommonly known dangers. üStatutes of Limitation. © 2004 West Legal Studies in Business A Division of Thomson Learning 19
Law on the Web üAmerican Law Institute. üHorvitz and Levy. üTobacco Product Liability. üLegal Research Exercises on the Web. © 2004 West Legal Studies in Business A Division of Thomson Learning 20
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