Chapter 4 Products Liability
Warranties of Quality
Negligence
Misrepresentation
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Definition
The liability of manufacturers, sellers,
and others for the injuries caused by
defective products.
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Warranties of Quality
Seller’s or lessor’s assurance to buyer or
lessee that the goods meet certain standards
of quality.
Warranties may be expressed or implied.
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Express Warranties
A warranty which is created when a seller
or lessor affirms that the goods he or she is
selling or leasing meet certain standards of
quality, description, performance, or
condition.
They may be either written, oral, or inferred
from the sellor’s conduct.
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Express Warranties (Continued)
Express Warranties are created when the
seller or lessor indicates that the goods
will conform to:
a. All affirmations of fact or promise made
about them
b. Any description of them
c. Any model or sample of them.
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Daughtrey V. Ashe
413 S.E.2d 336 (1992)
Supreme Court of Virginia
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1. In October 1985, W.Hayes Daughtrey
consulted Sidney Ashe, a jeweler, about the
purchase of a diamond bracelet ... Ashe
showed Daughtrey a diamond bracelet that
he had for sale for $15,000. When
Daughtrey decided to purchase the bracelet,
Ashe completed and signed an appraisal
form that stated that the diamonds were “H
color and v.v.s. quality. ”
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2.After being paid for the
bracelet, Ashe put the
bracelet and the appraisal
form in a box. Daughtrey
gave the bracelet to his
wife …. In 1987, when
another jeweler looked at the
bracelet, Daughtrey
discovered that the
diamonds were of
substantially lower grade
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than v.v.s.
3. Daughtrey filed a specific performance
suit against Ashe to compel him to replace
the bracelet with one mounted
(宝石等)镶嵌好的
with v.v.s. diamonds or pay appropriate
damages.
The trial court denied relief for breach of
warranty. He appealed.
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Was an express warranty made by Ashe
regarding the quality of the diamonds in the
bracelet?
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1. Any description of the
goods that is made a basis
of the bargain creates an
express warranty that the
goods shall conform to the
description.
…found that Ashe’s
description of the diamonds
created an express
warranty that became a part
of the basis of the bargain
between Ashe and
Daughtrey.
2. …noted that it was
not necessary for
Ashe to have used
the word warrant or
guarantee to create
an express warranty.
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The appellate court held that an express
warranty had been created. The trial
court’s decision was reversed and the
case was remanded (将案件)发还(下级法
院)复审： for determination of
appropriate damages to be awarded to
Daughtrey.
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Implied Warranty of
Merchantability
Unless properly disclosed, a warranty is
implied when sold or leased goods are fit
for the ordinary purpose for which they are
sold or leased, and other assurances.
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Implied Warranty of
Merchantability (Continued)
Implied that the goods:
a. fit for the ordinary purposes for which they are used.
b. adequately contained, packaged, and labeled.
c. be of an even kind, quality, and quantity within each
unit.
d. Conform to any promise or affirmation of fact made
on the container or label.
e. Pass without objection in trade.
f. Meet a fair average or middle range of quality.
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Implied Warranty of Fitness for
Human Consumption
A special warranty that applies to food or
drink consumed on or off the premises of
restaurants, grocery stores, fast-food outlets,
and vending machines
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Implied Warranty of Fitness for a
Particular Purpose
A warranty that arises when a seller or
lessor warrants that the goods will meet the
buyer’s or lessee’s expressed needs.
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Damages Recoverable for Breach of
Warranty
1. Compensatory damages补偿性赔偿金
2.Consequential damages间接损害赔偿金
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Compensatory Damages
Damages that are generally equal to the
difference between the difference between
the value of the goods as warranted and
actual value of the goods accepted at the
time and place of acceptance.
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Consequential Damages
Foreseeable damages that arise from
circumstances outside the contract. To be
liable for these damages, the breaching
party must know or have reason to know
that the breach will cause special damages
to the other party.
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Tort Liability Based on Fault
1.Negligence
2.Misrepresentation
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Negligence
Negligence refers to the neglect or
omission of reasonable precaution
or care. It is a more likely basis for
imposing liability.
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Negligence (Continued)
•
•
•
•
•
To prove negligence in a products case, the
injured party must prove:
the existence of a defect,
the defect was the result of the defendant’s
conduct,
the plaintiff suffered an injury,
the injury was caused by the defect, and
the defendant breached a duty of care to the
plaintiff.
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MACPHERSON v.
BUICK MOTOR
CO.
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1. MacPherson purchased a new Buick car
with wooden wheels from a Buick Motor
Company dealer. He was injured when the
car ran into a ditch. The accident was caused
by the collapse of one of the car’s wheels
because the spokes were made from
defective wood. The wheel had been made
by another manufacturer.
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2. MacPherson sued Buick Motor Company
directly. He proved that Buick could have
discovered the defects by reasonable inspection,
and that such an inspection had not been
conducted. After the trial court found in favor of
MacPherson, Buick appealed. Buick argued that
MacPherson could not sue Buick because there
was no contract between Buick and MacPherson.
The sale contract was between the dealer and
MacPherson.
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Can a consumer who
purchases a product from a
retailer sue the
manufacturer for negligent
manufacture of the product?
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The New York Court of Appeals held that Buick
could be held liable for negligence. As a
manufacturer, it owed a duty to any person who
could foreseeably be injured as a result of a
defect in an automobile it manufactured. Since
the action was one in tort for negligence, no
contract between the plaintiff and the defendant
was required.
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Landmark Law
This case established the rule, still applicable
today, that a manufacturer can be liable for
failure to exercise reasonable care in the
manufacture of a product where such failure
involves an unreasonable risk of bodily harm to
users of the product. This rule is embodied in
section 395 of the Restatement (Second) of
Torts in United States.
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Misrepresentation
Intentional misrepresentation occurs where
a seller or lessor either
(1) affirmatively misrepresents the quality
of a product or
(2) conceals a defect in it.
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Benedi V. McNeil-P.P.C.,
Incorporated（McNeil）
United States Court of
Appeals, Fourth Circuit
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1.Antonio Benedi consumed three to four glasses of
wine a night during the week and sometimes more on
the weekend. On February 5, 1993, Benedi began taking
extra-Strength Tylenol加强型泰诺in normal doses for
flu-like aches. On February 10, 1993, Benedi was
admitted to the hospital in a coma and near death due to
liver and kidney failure . On the night of February 12,
1993, Benedi underwent an emergency liver transplant.
Because of the transplant, Benedi will have to undergo
kidney dialysis in the future.
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2. Blood tests performed shortly after Benedi’s
admission to the hospital revealed that the suffered from
acetaminophen (Tylenol) toxicity, which is caused by a
combination of Tylenol and too much alcohol. The
bottle from which Benedi took the Tylenol did not
contain a warning of the dangers of the combination of
Tylenol and excessive alcohol consumption. Benedi
sued McNeil, the manufacturer of Tylenol, for negligent
failure to warn. The jury found McNeil negligent and
awarded Benedi $7,850,000 in compensatory damages.
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McNeil appealed.
Is McNeil liable for
negligent failure to
warn?
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1. At trial, Benedi called two liver disease
specialists… testified that a warning of the possible
danger to heavy drinkers from combining alcohol
and acetaminophen扑热息痛（一种替代阿司匹林的解
热镇痛药，常见品牌有泰诺（Tylenol）… placed on
the Tylenol label since the mid-1980s. These
experts described exactly how the alcoholacetaminophen mixture can become a toxin毒素in
the liver. The cited numerous treatises and articles
published in medical journals prior to 1993 that
describe the increased risk of liver injury when
acetaminophen is combined with alcohol.
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2. One of the plaintiff’s experts referred to 60
reports that McNeil had received by the end
of 1992 documenting cases of liver injury
associated with combining therapeutic治疗的
doses剂量of Tylenol with alcohol. The court of
appeals stated it was the jury’s role to assess
the weight and credibility of the evidence,
and the jury found that Benedi proved
causation因果关系. The court …ample
evidence existed from which a reasonable
jury could find for Benedi.
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The court of appeals affirmed the jury’s verdict
awarding plaintiff Benedi $7,850,000 against
McNeil for negligent failure to warn.
Note: In the summer of 1993 (after Benedi’s
injury), McNeil included a warning on Tyleol
that persons who regularly consume three or
more alcoholic drinks a day should consult a
physician before using Tylenol.
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What elements are necessary to prove
negligence?
Do you think that McNeil was negligent in
this case?
Do you think jurors are sophisticated
enough to evaluate and judge scientific
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evidence?
Contemporary
Business
What will be the implication of this case to
manufacturers of pain-killing drugs?
Will consumers be better off because of
this decision?
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