Anglo-American
Contract and Torts
Prof. Mark P. Gergen
15. Products Liability
Implied warranty of
merchantability: good must
be fit for the ordinary
purposes for which it is
used, be of “fair average
quality,” etc . . . UCC
2-314.
Consumer
expectation: product
is defective if it has
unexpected harmful
characteristics
Negligence:
Manufacturer must
take reasonable care
to avoid physical
harm.
Risk-utility: product is
defective if risk
justifies cost of
redesign or warning to
reduce risk
Implied warranty of
Negligence:
merchantability: good must
Manufacturer must
be fit for the ordinary
take reasonable care
purposes for which it is
to avoid physical
used, be of “fair average
harm.
quality,” etc . . . UCC
2-314.
P opens and drinks a soft drink in a can only to find a dead
bug at the bottom of can. Does P have a stronger claim for
breach of warranty or negligence?
P chokes on a small bone in a meaty fish stew. Does P have a
strong claim for either breach of warranty or negligence?
Do you need more facts?
Back to the bug in the bottle. The manufacturer establishes
that 1 in 100,000 bottles will end up with a bug no matter
how much care it takes, and that its incidence level is no
more than 1 in 100,000.
Is the manufacturer subject to negligence liability?
Why impose strict liability for unavoidable manufacturing
defects?
•Evidentiary rationale
•Loss spreading
•Creates incentive for manufacturers to do research to
reduce bugs
•Creates incentive to adjust activity level for unavoidable
risks
Restatement Second Torts Section 402A (Text 106 top)
“One who sells any product in a defective condition
unreasonably dangerous to the user or consumer to his
property is subject to liability for physical harm thereby
caused . . . if the seller is engaged in business of selling
such a product . . .”
The focus of the claim is on the condition of the
product. Is the product defective?
The bug in the bottle is a “manufacturing defect.”
This is a product that does not conform to
specifications.
A product can also be defective because of its design
or failure to warn. In the US the standard generally is
“risk-utility.”
Restatement Second Torts Section 402A
“One who sells any product in a defective condition
unreasonably dangerous to the user or consumer to his
property is subject to liability for physical harm thereby
caused . . . if the seller is engaged in business of selling
such a product . . .”
An innocent distributor and retailer are held liable so
the plaintiff may proceed against a local actor. The
expectation is the loss will be passed up the chain to
the manufacturer.
Restatement Second Torts Section 402A
“One who sells any product in a defective condition
unreasonably dangerous to the user or consumer to his
property is subject to liability for physical harm thereby
caused . . . if the seller is engaged in business of selling
such a product . . .”
Liability is limited to physical harm.
Under genuine absolute liability a manufacturer (or
distributor or retailer) would be liable for any harm
caused by a product. Worker’s compensation is close to
this . . . an employer is strictly liable for any workrelated accidents, though only for economic damages.