Chapter 6
Strict Liability and Product
Liability
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman
Copyright © 2004 by Prentice-Hall. All rights reserved.
Products Liability
The liability of manufacturers,
sellers, and others for the injuries
caused by defective products.
© 2006 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman
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Negligence and Fault
Negligence
Intentional
Misrepresentation
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Chapter
R. Cheeseman
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3
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Negligence and Fault(continued)
• Negligence
– A person injured by a
defective product may sue.
– The plaintiff must prove that
the defendant breached a
duty of due care to the
plaintiff that caused the
plaintiff’s injuries.
– In a negligence lawsuit, only
a party who was actually
negligent is liable to the
plaintiff.
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Negligence and Fault(continued)
• Negligence (continued)
– Consumer can recover
damages from the
manufacturer of the product
even though he or she was
only in privity of contract with
the retailer
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Tort Liability Based on Fault (continued)
• Negligence (continued)
Failure to exercise due care
includes:
– Failing to assemble the
product carefully.
– Negligent product design.
– Negligent inspection or
testing of the product.
– Negligent packaging.
– Failure to warn of the
dangerous propensities of
the product.
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Tort Liability Based on Fault (continued)
• Misrepresentation
– Seller or lessor fraudulently
misrepresents the quality of a
product, or conceals a
defect in it
– Recovery limited to persons
injured because they relied
on the misrepresentation.
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Strict Liability
• In Greenmun v. Yuba
Power Products, Inc., the
California Supreme Court
adopted the doctrine of
strict liability in tort as a
basis for product liability
actions.
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Strict Liability (continued)
• Liability Without Fault
– Unlike negligence, strict
liability does not require the
injured person to prove that
the defendant breached a
duty of care.
– Strict liability is imposed on
manufacturers, sellers, and
lessors who make and
distribute defective products
that cause injury to users and
others.
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Strict Liability (continued)
• Chain of Distribution
– All parties in the chain of
distribution of a defective
product are strictly liable for
the injuries caused by that
product.
– All manufacturers, distributors,
wholesalers, retailers, lessors,
and subcomponent
manufacturers may be sued
under doctrine of strict liability
in tort
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Strict Liability (continued)
• Privity of contract is not
required for a plaintiff to
sue for strict liability.
• The doctrine applies even
if the injured party had no
contractual relations with
the defendant.
• The damages recoverable
in a strict liability action
vary by jurisdiction.
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Strict Liability (continued)
• Damages recoverable for
personal injuries
– May be dollar limited
• Property damage recoverable
• Economic loss rarely granted
• Punitive damages are often
awarded if the plaintiff proves
that the defendant either:
– Intentionally injured him or her; or
– Acted with reckless disregard for
his or her safety.
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Doctrines of Negligence and Strict Liability Compared
Defendant
Manufacturer
(negligent)
Defendant
Defective product
Negligent
party is
liable
Distributor
Defendant
Retailer
Defendant
Negligence
lawsuit
Consumer
All in the chain of
distribution are
liable
Strict liability
lawsuit
Defective product causes injury
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Defective Product
• To recover for strict liability,
the injured party must first
show that the product that
caused the injury was
somehow defective.
• Plaintiffs can allege
multiple product defects in
one lawsuit.
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Defective Product(continued)
Design
Manufacture
Failure to Warn
The most
common types
of defects:
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Packaging
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Defect in Manufacture
•
Defect that occurs when
the manufacturer fails to:
1.
Properly assemble a
product
2.
Properly test a product, or
3.
Adequately check the
quality of a product
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Defect in Design
•
Defect that occurs when a
product is improperly
designed.
Design defects include:
1. Toys designed with
removable parts that could
be swallowed by children.
2. Machines and appliances
designed without proper
safeguards.
3. Trucks designed without a
backup warning device.
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Defect in Design(continued)
• In evaluating the
adequacy of a product’s
design, the courts apply a
risk-utility analysis
– Gravity of the danger posed by
the design
– Likelihood that injury will occur
– Availability and cost of
producing a safer design
– Social utility of the product
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Crashworthiness Doctrine
The courts have held that automobile
manufacturers are under a duty to design
automobiles so they take into account the
possibility of harm from a person’s body
striking something inside the automobile in
the case of a car accident.
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Failure to Warn
• Defect that occurs when a
manufacturer does not place a
warning on the packaging of
products that could cause
injury if the danger is unknown.
• Proper and conspicuous
warning insulates all in chain of
distribution
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Defect in Packaging
• Defect that occurs when a
product has been placed
in packaging that is
insufficiently tamperproof.
– Manufacturers owe a duty to
design and provide safe
packages for their products.
– Failure to meet this duty
subjects the manufacturer
and others in the chain of
distribution of the product to
strict liability.
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Other Product Defects
• Failure to provide
adequate instructions
• Inadequate testing of
products
• Inadequate selection of
component parts or
materials
• Improper certification of
the safety of a product
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Supervening
Event
Defenses to
Product
Liability
Generally
Known Dangers
Assumption of
the Risk
Contributory &
Comparative
Negligence
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Government
Contractor
Defense
Misuse of the
Product
Statute of
Limitations
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Defenses to Product Liability (continued)
• Generally Known Dangers
– Certain products are
inherently dangerous
– Products are known to the
general population to be so
– Sellers are not strictly liable
for failing to warn of
generally known dangers.
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Defenses to Product Liability (continued)
• Government Contractor
Defense
– Contractor who was provided
specifications by the government
is not liable for any defect in the
product that occurs as a result of
those specifications
– Product must conform to
specifications
– Contractor must have warned of
known defects or dangers
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Defenses to Product Liability (continued)
•
Assumption of Risk
–
Defendant must prove that
the plaintiff knew and
appreciated the risk
–
the plaintiff voluntarily
assumed the risk
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Defenses to Product Liability (continued)
• Misuse of the Product
– Relieves the seller of product
liability if the user abnormally
misused the product.
– Products must be designed
to protect against
foreseeable misuse.
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Defenses to Product Liability (continued)
• Correction of a Product
Defect
– Manufacturer must notify
purchasers and users
– Must correct defect
– Usually achieved through
recall and repair or
replacement
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Defenses to Product Liability (continued)
• Supervening Event
– Alteration or modification of
a product by a party that
absolves seller from strict
liability
– Modification must be made
after it leaves seller’s
possession
– Alteration must cause injury
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Statute of Limitations
• Statute that requires an injured
person to bring an action within
a certain number of years from
the time that he or she was
injured by the defective
product
• Limitation period set by each
state
• Defendant relieved of liability if
action not brought within
limitation period
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Statute of Repose
• Limits the seller’s liability to
a certain number of years
from the date when the
product was first sold
• Varies from state to state
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Contributory Negligence
• Person who is injured by a
defective product
• Injured party has been
negligent
– contributed to his or her own
injuries
• Cannot recover from the
defendant.
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Comparative Negligence
• Plaintiff is contributorily
negligent for his or her
injuries
• Responsible for a
proportional share of the
damages
• Damages proportioned
between plaintiff and
defendant
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