Chapter 10
Strict Liability and
Product Liability
Chapter Objectives
1. Explain what is meant by strict
liability.
2. Describe the types of warranties that
may arise in a sales or lease
transaction.
3. Discuss how negligence and
misrepresentation can provide a basis
for a product liability action.
4. List the requirements for an action in
strict liability.
5. Summarize the defenses that can be
raised against product liability claims.
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Product Liability
The legal liability of manufacturers,
sellers, and lessors of goods to
consumers, users, and bystanders for
injuries or damages that are caused by
the goods.
Product liability claims are most often
based on:




Warranty Law
Negligence
Misrepresentation
Strict Liability
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Warranty Law
Under the Uniform Commercial
Code, certain warranties can arise
in a contract for sale of goods.
Consumers and others can recover
from any seller for losses resulting
from a breach of:
 Express warranties: those made by oral or
written representations concerning the
goods
 Implied warranties
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Implied Warranties
Warranty of
Merchantability:
A merchant warrants
goods are “reasonably
fit for the ordinary
purposes for which
such goods are used.”
Applies only to
merchants!
Warranty of Fitness
for a Particular
Purpose:
Arises when any seller
knows of the
particular purpose for
which a buyer will use
the goods and knows
the buyer is relying on
the seller to select
suitable goods.
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Negligence
In order to prevent claims of
negligence, due care must be
used by the manufacturer in:
 Designing the product
 Selecting materials
 Using the appropriate production
process
 Assembling and testing the product
 Placing adequate warnings on the label
or product
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Sometimes, “Puffery” Becomes
the “Basis of the Bargain”
Michael and Carla Weng bought a used car that the
salesperson claimed was “in good condition,” was
“a good reliable car,” was “mechanically sound,”
and had “no problems.” The Wengs believed his
words constituted an expressed warranty, so when
the car gave them trouble, the Wengs sued the
dealer for breach of warranty. At trial, the Wengs
lost because the statements were mere puffery.
However, on appeal they won because the
statements were “part of the basis of the bargain.”
In reading the court’s words, is there really a clear
line between language considered to be mere
puffing and language considered to create an
express warranty?
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Privity of Contract
Privity of contract is not required. A
manufacturer is liable for failure to
exercise due care to any person who
sustains an injury proximately caused
by a negligently made (defective)
product.
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Misrepresentation
Fraudulent misrepresentation
of a product may result in
product liability based on the
tort of fraud.
Examples include:
 Intentional mislabeling of packaged
cosmetics
 Intentional concealment of a
product’s defects
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Strict Liability
Under the doctrine of strict liability,
people may be liable for the results
of their acts regardless of their
intentions or their exercise of
reasonable care.
If a child is injured by a toy, should the
manufacturer be held liable regardless
of the circumstances?
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MacPherson v. Buick Motor Co. (1916)
Donald MacPherson was thrown from a Buick
automobile after one of its wheels collapsed. He
suffered injuries and brought suit against Buick
Motor Co. The court held that Buick had a duty to
inspect the wheels, even though it didn’t
manufacture them, and held them responsible for
the injury.
What doctrine (just discussed) did Buick try to argue
in its defense?
To what extent, if any, have technological
developments contributed to the courts placing less
emphasis on the doctrine of caveat emptor (“let the
buyer beware”) and more emphasis on caveat
venditor (“let the seller beware”)?
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Requirements of Strict Product
Liability—Summarized
The defendant must sell the product in a defective condition.
The defendant must normally be engaged in the business of selling that product.
The product must be unreasonably dangerous to the user or consumer because of
its defective condition (in most states). A court may consider a product so
defective as to be unreasonably dangerous if either (a) the product was
dangerous beyond the expectation of the ordinary consumer or (b) a less
dangerous alternative was economically feasible for the manufacturer, but the
manufacturer failed to produce it.
The plaintiff must incur physical harm to self or property by use or consumption
of the product.
The defective condition must be the proximate cause of the injury or damage.
The goods must not have been substantially changed from the time the product
was sold to the time the injury was sustained.
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Case 10.1 Greenman v.
Yuba Power Products, Inc.
When Greenman was injured by a defect in
the design of a “Shopsmith” woodworking
tool, he sued claiming breach of warranty
and negligence. The court instead held the
manufacturer strictly liable.
What rationale did the court use to support
its decision?
What UCC rule did the manufacturer refer
to when it argued that the plaintiff had
“waited too long” to give notice of the
breach of warranty? What ethical doctrine
underlies this rule?
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Section 402A of the
Restatement (Second) of Torts
1. One who sells any product in a
defective condition unreasonably
dangerous to the user or consumer or
to his property is subject to liability
for physical harm thereby caused to
the ultimate user or consumer or to
his property, if
a. the seller is engaged in the business of
selling such a product, and
b. it is expected to and does reach the user
or consumer without substantial change in
the condition in which it is sold.
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Section 402A of the
Restatement (Second) of Torts
2.The rule stated in Subsection
(1) applies although
a. the seller has exercised all possible
care in the preparation and sale of
his product, and
b. the user or consumer has not
bought the product from or entered
into any contractual relation with
the seller.
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Market-Share Liability
In cases in which plaintiffs cannot prove
which of many distributors of a harmful
product supplied the particular product
that caused the plaintiffs’ injuries, some
courts have applied market-share
liability.
All firms that manufactured and
distributed the harmful product during
the period in question are then held liable
for the plaintiffs’ injuries in proportion to
the firms’ respective shares of the
market, as directed by the court.
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Product Defect and Strict
Liability Claims
Claims that a product is so
defective as to be unreasonably
dangerous generally allege that the
product is unreasonably dangerous
for one of the following reasons:
 Because of a flaw in the manufacturing
process
 Because of a design defect
 Because the manufacturer failed to warn
adequately of harms associated with the
product’s use
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Case 10.2 Rogers v.
Ingersoll-Rand Co.
In the maintenace manual that accompanies
the milling machine made by Ingersoll-Rand,
there are warnings that users should stay 10
feet away from the rear of the machine when it
is operating, verify the alarm is working, and
check the area for the presence of others.
Terrill Wilson, while operating the machine, ran
over Cosandra Rogers when the back-up alarm
did not sound. She was maimed and filed a suit
against Ingersoll-Rand alleging design defect.
She was awarded $10.2 million in
compensatory damages and $6.5 million in
punitive damages.
What other safety features might a
manufacturer use in these circumstances?
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Inadequate Warnings
At what point does the manufacturer’s
responsibility for consumer safety end
and the consumer’s responsibility for
his or her own safety begin?
Courts generally try to balance the
policy of protecting consumers with the
policy that manufacturers cannot be
the absolute insurers of the safety of all
products on the market.
Should consumers be warned that hot
coffee can cause severe burns?
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Other Applications of
Strict Liability
Bystanders:
Manufacturers and
other sellers are
liable for harms
suffered by injured
bystanders due to
defective products.
Suppliers of
Components:
Suppliers of
component parts
are strictly liable
for defective parts
which, when
incorporated into a
product, cause
injuries to users.
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Defenses to Product Liability
There are several defenses that
manufacturers, sellers, or lessors
can raise to avoid liability for
harms caused by their products.
Assumption of Risk
Product Misuse
Comparative Negligence
Commonly Known Dangers
Other Defenses
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Defenses to Product Liability
Assumption of Risk
 The user or consumer knew of the
risk of harm and voluntarily assumed
it.
Product Misuse
 The user or consumer misused the
product in a way unforeseeable by
the manufacturer.
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Defenses to Product Liability
Comparative Negligence
 Liability may be distributed between
plaintiff and defendant under the doctrine of
comparative negligence.
Commonly Known Dangers
 If a defendant succeeds in convincing the
court that a plaintiff’s injury resulted from a
commonly known danger, such as the
danger associated with using a sharp knife,
the defendant will not be liable.
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Case 10.3 Travelers Ins. Co. v.
Federal Pacific Electric Co.
After RCA employees switched a circuit breaker
on without testing for short circuits (causing an
explosive fire), RCA’s insurer brought suit
alleging that FPC was negligent in failing to
provide adequate warnings.
The court held there was “no necessity to warn a
customer already aware—through common
knowledge or learning—of a specific hazard.”
What might have been the result in this case if
the training, experience, and expertise of the
employees dispatched to check the circuit
breakers had been with a different, out-of-date
technology?
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Other Defenses
Lack of Required Elements
 A defendant can also defend against
a products liability claim by showing
that there is no basis for the
plaintiff’s claim (that the plaintiff has
not met the requirements for an
action in negligence or strict liability).
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For Review
1. How does the doctrine of strict liability differ
from the tort doctrines discussed in Chapter 9?
2. What factors determine whether a seller’s or
lessor’s statement constitutes an express
warranty or merely “puffing”?
3. Discuss whether a manufacturer can be held
liable to any person who suffers an injury
proximately caused by the manufacturer’s
negligently made product.
4. What are the elements of a cause of action in
strict product liability?
5. What defenses to liability can be raised in a
product liability lawsuit?
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