Evolution of Legal Theories
Began with breach of contract
Expanded to include negligence
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Evolution of Legal Theories
Today – most product liability suits are based
upon one or more of the following counts
• Negligence
• Breach of Implied and Express Warranties
• Strict Liability
Manufacturer, wholesaler or retailer of a
product can be sued for injuries resulting from
dangerous and defective products
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Evolution of Legal Theories
Began at common law under doctrine
of privity
• Injured party must have a contractual
relationship with defendant
• Breach of contract
• No remedy in tort for injured party
Common law derived from judicial
rulings carried over from England to
the US
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Evolution of Legal Theories
 MacPherson v. Buick Motor Co., 217 N.Y. 382,
111 N.E. 1050 (N.Y 1916) decision
 Cause of action not limited to contract
 New concepts of “inherently” or “imminently”
dangerous products
 Lack of privity is not a defense if it is foreseeable
that the product, if negligently made, is likely to
cause injury to class of persons that includes the
plaintiff.
 Essentially test for negligence
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Evolution of Legal Theories
Greenman v. Yuba Power Products, Inc.,
59 Cal.2d 57, 27 Cal. Rptr. 697, 377 P.2d
897(1963)
• Manufacturer strictly liable in tort
• No inspection for defects
• Proves to have a defect that causes injury to a
person
• No negligence proof required
• No privity of contract required
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Products Liability Today
This case is foundation upon which strict
liability rules have been developed by
the courts
1965 – American Law Institute adopted the
concepts of Greenman into the Restatement
(Second) of Torts
Courts since have viewed strict liability
theory to serve as remedy for injured party
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Products Liability Today
Strict liability
• Not designed
developed to be
to create
a means of social
absolute
policy and public
liability
protection
Many federal /
state statutes
address the
issues of product
liability
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Federal Statutes and
Regulations
Consumers Products Safety Act 1972
US Dept of Commerce
Promulgated Model Uniform
Products Liability Act 1979
Voluntary use by states
Uniform Commercial Code
Article 2 - sales of
goods
Has been adopted by
most states
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Implied / express
warranties of
merchantability
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Products Liability
 Refers to the liability of any/all parties on
manufacturing chain
 This includes the manufacturer of component
parts, an assembling manufacturer, the
wholesaler, warehouseman and the retail
store
 Particularly vulnerable
 Children’s products
 Food
 Pharmaceuticals
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Summary
 Discuss quality control measures with insured
 Determine if insured uses oversight methods for
sub-manufacturers
 Review future operational changes
 Use of foreign manufacturers
 Distribution methods
 Territory of product distribution
 Disposal of product line
 Deductibles / Retentions
 Aggregate the self-funded exposure
 Review shipping methods and responsibilities
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