Ch 7 Statutory strict liability ex workers compensation act Tort reform Tendency towards strict liability increases in frequency size of damage awards etc have made insurance companies increase premiums refuse coverage etc Legislation follows strategies 1 limit defendants tort liability 2 limit damages plaintiffs can recover Ch 20 Previously caveat emptor let the buyer beware now caveat venditor let the seller beware Some product liability contractual express implied warranty about nature of product sold some tort based Express warranty may be created by 1 affirmation of fact promise 2 description of the good or 3 sample model of the good IF it becomes part of the basis for the bargain Statements of value opinion or sales talk doesn t create express warranty but includes statements made in ads catalogs brochures Implied warranty created by operation of law rather than seller s express statements Implied warrant of merchantability to be merchantable goods must 1 pass without objection in the trade 2 be fit for ordinary purposes for which goods are used 3 be of even kind quality quantity within each unit 4 be adequately contained packaged labeled 5 conform to promises statements of fact made on label 6 be of fair average quality Foreign natural test food defendant is liable if object substance is foreign to product but not if its natural Implied warranty of fitness arises when 1 seller has reason to know a particular purpose for which the buyer requires the goods 2 seller has reason to know that buyer is relying on seller s skill judgment for selection of suitable goods 3 buyer actually relies on seller s skill judgment in purchasing the goods Negligence negligent manufacture defendant must prove breach of duty negligent inspection duty to inspect products for defects that create a reasonably foreseeable risk of harm negligent failure to warn duty to give appropriate warning when products pose reasonably foreseeable risk of harm negligent design design should avoid reasonably foreseeable risks of harm Strict liability Section 402A requirements 1 seller must be engaged in the business of selling the product that harmed the plaintiff 2 product must be in defective condition when sold must be unreasonably dangerous b c of that condition does the product meet the reasonable expectations of the avg consumer 3 defendants may avoid liability if product was substantially modified by another party after the sale this contributed to the plaintiff s injury Comment k unavoidably unsafe products neither defective nor unreasonably dangerous if properly prepared accompanied by proper directions a proper warning Restatement 3rd doesn t require that the product must be unreasonably dangerous Rules 1 manufacturing defects product doesn t conform to intended design 2 inadequate instructions warnings could have reduced product s foreseeable risk of harm but seller didn t provide them 3 design defects risk could have been reduced by reasonable alternative design at time of sale Magnuson Moss Act consumer products costing more than 10 item if seller gives written warranty must be either full must remedy defect or replace refund or limited Misrepresentation must involve a material fact about the product that would matter to a reasonable buyer Industry wide liability several firms manufacture product plaintiff may bypass proving which firm injured her Time limitations statue of limitations for express implied warranty is 4 years after sale additional with 1 product liability involving death injury 2 delayed manifestation injuries 3 useful safe life defenses 4 statutes of repose Damages in product liability cases 1 Basis of the bargain buyer incurs direct economic loss privity of contract btwn plaintiff defendant 2 Consequential personal injury property damage indirect economic loss noneconomic loss recover if damage proximately resulted from breach or loss was reasonably foreseeable 3 Punitive tort cases rarely warranty cases No Privity defense tort cases use test of reasonable foreseeability warranty cases use UCC 2 318 UCC 2 318 reasonably foreseeable status of plaintiff consumers natural people fare better type of damages personal property basis of bargain indirect economic loss Privity doesn t matter for torts but does for warranty Disclaimer seller attempts to eliminate liability it might otherwise have had in sales contract Remedy limitation clause attempting to block recovery of certain damages UCC 2 719 allows limitation of consequential damages in express implied warranty cases unless the limitation of remedy fails of its essential purpose or is unconscionable sale or consumer goods plaintiff suffered personal injury Implied warranty disclaimers exclude merchantability use word merch make conspicuous exclude fitness writing conspicuous using terms as is etc buyer s inspection of goods refusal to inspect previous dealing usage of trade etc Express warranty disclaimers very difficult warranty disclaimer should be consistent Disclaimers of tort liability enforced when both parties are business entities that 1 dealt in a commercial setting 2 had relatively equal bargaining power 3 bargained over product s specifications 4 negotiated risk of loss Limitation of remedies usual target is consequential damages Defenses Traditional offer complete defense product misuse if not foreseeable assumption of risk contributory negligence Comparative principles apportionment of damages on the basis of relative fault Ch 9 Standardized form contracts preprinted by one party and presented to the other party for signing nonnegotiable Elements of Contract 1 Voluntary agreement offer acceptance 2 Consideration 3 Capacity 4 Legality Bilateral both parties exchange promises Unilateral one party makes promise Valid meets legal requirements binding enforceable Unenforceable meets legal requirements not enforceable b c of some other rule Voidable 1 parties have right to cancel contract Void create no legal obligation Express parties directly stated terms Implied surrounded facts indicated agreement Executed all parties fully performed duties Executory duties haven t been fully performed UCC only applies to goods tangible moveable personal property not real estate stocks bonds service contracts holds merchants at higher standard Quasi Contract imposed when 1 one party confers a benefit on another 2 who knowingly accepts enjoys it 3 unjust to do so without paying for it unjust enrichment not available when valid contract
View Full Document
Unlocking...