Chapter 20 Product Liability Law of product liability the body of legal rules governing civil lawsuits for losses and harms resulting form a defendant s furnishing of defective goods The Evolution of Product Liability Law 19th Century Caveat emptor let the buyer beware rules governing suits for defective goods were to manufacturers and sellers advantages In contract cases involving defective goods there usually was no liability unless the seller had made an express promise to the buyer and the goods did not conform to that promise 20th and 21st Centuries Caveat venditor let the seller beware To protect consumers modern courts and legislatures effectively intervene in private contracts for the sale of goods and sometimes impose liability regardless of fault o As a result sellers and manufacturers face greater liability and higher damage assessments for defects Theories of Product Liability Recovery Theories are contractual and some are tort based Contract theories involve a product warranty an express or implied promise about the nature of the product sold o In warranty cases plaintiffs claim that the product failed to live up to the seller s promise In tort cases on the other hand plaintiffs usually argue that the defendant was negligent or that a strict liability should apply Express Warranty Creation of an Express Warranty ways UCC section 2 313 1 stats than an express warranty may be created in any of 3 o If an affirmation of fact or promise regarding the goods becomes part of the basis of the bargain there is an express warranty that the goods will conform to the affirmation or promise o Any description of the goods that becomes part of the basis of the bargain creates an express warranty that the goods will conform to that description Descriptions include Goods are of a certain brand type or model Adjectives that characterize the product ex shatterproof glass Drawings blueprints and technical specifications o Assuming it becomes part of the basis of the bargain a sample or model of goods to be sold creates an express warranty that the goods will conform to the sample or model Sample an object drawn from an actual collection of goods to be sold Model a replica offered for buyer s inspection when to goods Value Opinion and Sales Talk themselves are unavailable Statements of value this chair will bring you 2000 at an auction or opinion I think this chair might be an antique do not create an express warranty Same is true of statements that amount to sales talk or puffery I think this chair is a good buy The relative knowledge possessed by the seller and buyer also matter The Bases of the Bargain Requirement Required though ambiguously that the affirmation promise description sample or model have become part of the basis of the bargain in order for an express warranty to be created Statements made in advertisements catalogs or brochures may be express Advertisements warranties Multiple Express Warranties If a seller gives two or more warranties and they arguable conflict o UCC section 2 317 says that such warranties should be read as consistent with each other and as cumulative if this is reasonable If not the parties intention controls In determining that intention Exact or technical specifications defeat a sample a model or general descriptive language and A sample defeats general descriptive language Implied Warranty of Merchantability Implied warranty a warranty created by operation of law rather than the seller s express statements UCC section 2 314 1 creates the Code s implied warrant of merchantability as so o A warranty that the goods shall be merchantable is implied in the contract for their sale if the seller is merchant with respect to goods of that kind UCC section 2 314 2 states that to be merchantable goods must at least o Pass without objection in the trade o Be fit for the ordinary purpose for which such goods are used o Be of even kind quality and quantity within each unit case package or carton label o Be adequately contained packaged and labeled o Conform to any promises or statements of fact made on the container or o And in the case of fungible goods be of fair average quality Implied Warranty of Fitness where UCC section 2 315 implied warranty of fitness for a particular purpose arises o The seller has reason to know a particular purpose for which the buyer requires the goods o The seller has reason to know that the buyer is relying on the seller s skill or judgment for the selection of suitable goods and o The buyer actually relies on the seller s skill or judgment in purchasing the goods If these tests are met there is an implied warranty that the goods will be fit for the buyer s particular purpose Any seller merchant or nonmerchant may make this implied warranty whose breach will give rise to liability for damages With an implied warranty of fitness sellers warrant that the goods are fit for the buyer s particular purposes not the ordinary purposes for which such goods are used Negligence Product liability lawsuits brought on the negligence theory usually allege that the seller or manufacturer breached a duty to the plaintiff by failing to eliminate a reasonably foreseeable risk of harm associated with the product Such cases involve one or more of these claims o Negligent manufacture of goods including improper materials and packaging Hard to prove evidence need to prove breach of duty is under the defendant s control Modern discovery rules and the doctrine of res ipsa loquitur may help plaintiffs o Negligent inspection help plaintiffs Modern discovery rules and the doctrine of res ipsa loquitur may Middlemen not liable for failing to inspect goods sold in the manufacturer s original packages or containers Sellers that prepare install or repair the goods they sell have a duty to inspect goods products Ex restaurants automobile dealers installers of household o Negligent failure to provide adequate warnings Duty to give an appropriate warning when products pose a reasonably foreseeable risk of harm Reasonable foreseeability of the risk magnitude or severity of the likely harm ease or difficulty of proving and appropriate warning the likely effectiveness of a warning No duty to warn if the risk is open and obvious o Negligent design Three other factors Industry practices at the time the product was manufactured The state of the art state of existing scientific and technical knowledge at that time The products compliance or noncompliance with government
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