CHAPTER 6 STRICT LIABILITY AND PRODUCT LIABILITY 2010

CHAPTER 6 STRICT LIABILITY AND PRODUCT LIABILITY © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 1

Product Liability The liability of manufacturers, sellers, and others for the injuries caused by defective products. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 2

Fault-Based Theories Negligence © 2010 Pearson Education, Inc. , publishing as Prentice-Hall Misrepresentation 3

Fault-Based Theories (continued) • Negligence – Defendant breached a duty of due care to the plaintiff that caused the plaintiff’s injuries. • E. g. , negligent product design, failure to assemble properly, failure to inspect, failure to warn. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 4

Fault-Based Theories (continued) • Misrepresentation – Seller or lessor fraudulently misrepresents the quality of a product or conceals a defect in it. – Recovery limited to persons who relied on the misrepresentation. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 5

Strict Liability • In Greenmun v. Yuba Power Products, Inc. , California adopted doctrine of strict liability in tort as a basis for product liability actions. • Most states now recognize this doctrine. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 6

Strict Liability (continued) • Liability Without Fault – Unlike negligence, strict liability does not require the injured person to prove that the defendant breached a duty of care. • May be liable even though exercised all possible care. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 7

Strict Liability Defendants • Sellers and lessors engaged in business of selling or leasing products. – All parties in the chain of distribution – All manufacturers, distributors, wholesalers, retailers, lessors, and subcomponent manufacturers – NOT for non-merchants • E. g. , selling to neighbor at garage sale © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 8

Strict Liability Plaintiffs • Any injured party. – Privity of contract not required. – Recovery possible even if the injured party had no contractual relations with the defendant. • E. g. , injured bystander © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 9

Strict Liability Damages • Damages for personal injuries available in all jurisdictions. – Property damage recoverable in most jurisdictions – Economic loss in few jurisdictions • Punitive damages generally allowed if defendant either: – Intentionally injured plaintiff, or – Acted with reckless disregard. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 10

Negligence, Strict Liability Compared Defendant Manufactur er (negligent) Defendant Distribut or Defendant Retailer Defendant Consum er Strict liability lawsuit Defective product Negligent party is liable Negligenc e lawsuit All in the chain of distribution are liable Defective product causes injury © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 11

Defective Product • To recover for strict liability, the injured party must first show that the product that caused the injury was somehow defective. • Plaintiff can allege multiple product defects in one lawsuit. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 12

Defective Product (continued) Design Manufacture Failure to Warn © 2010 Pearson Education, Inc. , publishing as Prentice-Hall The most common types of defects: Packaging 13

Defect in Manufacture • Defect that occurs when manufacturer fails to: – Properly assemble a product – Properly test a product, or – Adequately check the quality of a product. • E. g. , screw in ladder not inserted as usual, or mouse found in soft drink bottle. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 14

Defect in Design • • Defect that occurs when a product is improperly designed. E. g. , – – – Toys designed with removable parts that could be swallowed by children. Machines and appliances designed without proper safeguards. Trucks designed without a backup warning device. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 15

Defect in Design (continued) • In evaluating the adequacy of a product’s design, courts apply a risk-utility analysis – Gravity of the danger posed by the design – Likelihood that injury will occur – Availability and cost of producing a safer design – Social utility of the product © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 16

Crashworthiness Doctrine Automobile manufacturers have duty to design automobiles taking into account the possibility of harm from a person’s body striking something inside the automobile in case of a car accident. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 17

Failure to Warn • Defect that occurs when a manufacturer does not place a warning on the packaging of products that could cause injury if the danger is unknown. • Proper and conspicuous warning insulates all in chain of distribution. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 18

Defect in Packaging • Manufacturers owe a duty to design and provide safe packages for their products. −E. g. , make package sufficiently tamperproof. • Failure to meet this duty subjects all in chain of distribution of the product to strict liability. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 19

Other Product Defects • Failure to provide adequate instructions • Inadequate testing of products • Inadequate selection of component parts or materials • Improper certification of the safety of a product © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 20

Supervening Event Defenses to Product Liability Contributory & Comparative Negligence © 2010 Pearson Education, Inc. , publishing as Prentice-Hall Generally Known Dangers Assumption of the Risk Government Contractor Defense Misuse of the Product Statute of Limitations 21

Defenses to Product Liability (continued) • Generally Known Dangers – Certain products are inherently dangerous. • E. g. , guns, knives – Products known to the general population to be so. – Sellers are not strictly liable for failing to warn of generally known dangers. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 22

Defenses to Product Liability (continued) • Government Contractor Defense – Contractor who was provided specifications by the government is not liable for any defect in the product that occurs as a result of those specifications. – Product must conform to specifications. – Contractor must have warned of known defects or dangers. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 23

Defenses to Product Liability (continued) • Assumption of Risk – Defendant must prove that plaintiff knew and appreciated the risk, and – Plaintiff voluntarily assumed the risk. – Narrowly applied in strict liability cases. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 24

Defenses to Product Liability (continued) • Misuse of the Product – Relieves the seller of product liability if the user abnormally misused the product. • Unforeseeable misuse. – Products must be designed to protect against foreseeable misuse. • E. g. , toy manufacturers must foresee that babies will put small items in their mouths, which could cause choking. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 25

Defenses to Product Liability (continued) • Correction of a Product Defect – Manufacturer must notify purchasers and users, and offers to correct defect by repair or replacement. • Letters, notices in newspapers – If user ignores notice, manufacturer has defense against product liability. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 26

Defenses to Product Liability (continued) • Supervening Event – Alteration or modification of a product by a party that absolves seller from strict liability. – Modification must be made after it leaves seller’s possession. – Alteration must cause injury. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 27

Statute of Limitations • Plaintiff must bring action within a certain number of years from the time that he or she was injured by the defective product. • Limitation period set by each state. • Defendant relieved of liability if action not brought within limitation period. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 28

Statute of Repose • Limits the seller’s liability to a certain number of years from the date when the product was first sold. • Varies from state to state. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 29

Contributory Negligence • Plaintiff who contributed to own injuries cannot recover from the defendant in negligence • Typically not a bar to recovery in strict liability. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 30

Comparative Negligence • Plaintiff is partially responsible for own injuries. • Damages proportioned between plaintiff and defendant. • May apply in strict liability and negligence. © 2010 Pearson Education, Inc. , publishing as Prentice-Hall 31