Product Liability
LPP 255
Pat Cihon
Syracuse University -- SoM -- LPP
1
Overview
 Sellers’
or Manufacturers’ Liability for
products made or sold by them
 Politically Controversial
 Concern over “Litigation Explosion” -McDonald’s Coffee Suit
2
Agenda
 Contract-Based
and Tort-Based Theories
 Requirements and Details of Theories
 Damages Available under Each Theory
3
CONTRACT-BASED
THEORIES
 Express
Warranty
 Implied Warranty of Merchantability
 Implied Warranty of Fitness of Purpose
4
EXPRESS WARRANTY
 Art.
2-313 of Uniform Commercial Code
 Requirements:
Any Affirmation of Fact or Description of
Product;
Providing Model or Sample of Product
“Basis of the Bargain”
 Becomes
Promise or Warranty that Product
meets Description, Model or Sample
5
IMPLIED WARRANTY OF
MERCHANTABILITY
 Article
2-314 of Uniform Commercial Code
 Requirements:
 Merchant: Ordinary Business of Selling
Products
Product Sold in Course of Business
 Promise
Implied by Law that Product Will
Meet Normal Consumer Expectations or
Pass Under Trade Description
6
IMPLIED WARRANTY OF
FITNESS OF PURPOSE
 Article
2-315 of Uniform Commercial Code
 Requirements:
 Consumer Makes Retailer Aware of Purpose
For Seeking Product
Retailer Recommends Product For Purpose
 Consumer Relies on Recommendation to
Purchase Product
 Promise
Implied by Law that Product Will
Be Fit For Purpose of Consumer
7
TORT-BASED THEORIES
 Negligence
 Strict
Liability
8
NEGLIGENCE
 Requirements:
 Duty of Care Owed by Seller / Manufacturer
 Seller / Manufacturer Breaches Std. of Care
Injury or Damages Suffered
 Breach of Std. of Care was Proximate Cause
 Seller
or Manufacturer at Fault for Failing
to Exercise Reasonable Care In Making /
Selling Product
9
STRICT LIABILITY
 Section
402A of Restatement of Torts
 Requirements:
Product Sold in Ordinary Course of Business
 Product Has Condition that Poses
Unreasonable Danger to Consumer
 Condition Existed When Product Left
Manufacturer
Condition Causes Injury or Damage
 Seller
and Manufacturer Liable for Injuries
Caused by Product -- No Fault Liability
10
TYPES OF DAMAGES
 Economic
Damages - Contract Theories
 Direct Economic Damages - Basis of Bargain
Indirect Economic Damages - Lost Profits
 Personal
Injury Damages-Tort & Contract
Medical Injuries
Property Damage
 Punitive
Damages - Tort Theories Only
11
Disclaimers and
Remedy Limitations
 Disclaimer
-- Attempt to Avoid Liability
Under Particular Theory
Must Be Reasonable -- Allow Consumer Some
Remedy
Only Implied Warranties Disclaimed in
Consumer Setting
 Remedy
Limitation -- Attempt to Limit
Liability for Types of Damages
Only if Reasonable
Consumer Clearly Aware of Limitation
12