CH 7 NEGLIGENCE STRICT LIABILITY Statutory strict liability ex workers comp act Tort reform tendency towards strict liability increases in size frequency of awards have made insurance companies increase premiums refuse coverage legislation 1 limits defendants tort liability limits plaintiffs recovery CH 20 PRODUCT LIABILITY Previously caveat emptor buyers beware now caveat venditor sellers beware some product liability contractual express implied warranty some tort based EXPRESS WARRANTY If basis of bargain created by 1 affirmation of fact promise 2 description of good 3 sample model of good includes ads brochures excludes sales talk opinion IMPLIED WARRANTY created by op of law of MERCHANTIBILITY goods must 1 pass w o objection in the trade 2 be fit for ordinary purposes in 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 avg quality of FITNESS 1 seller has reason to know particular purpose for which buyer requires 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 goods Foreign Natural Test food defendant liable if substance is foreign to product but not if its natural NEGLIGENCE negligent manufacture negligent inspection negligent failure to warn negligent design should avoid foreseeable risks of harm defendant must prove breach of duty STRICT LIABILITY Sect 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 product meet reasonable expectations of avg consumer 3 defendants may avoid liability if product was substantially modified by another party after the sale this contributed to plaintiff s injury Comment K unavoidably safe products neither defective or unreasonably dangerous if properly prepared accompanied by proper directions proper warning Restatement 3rd doesn t require that product must be unreasonably dangerous 1 manufacturing defects 2 inadequate instructions warnings 3 design defects Magnuson Moss Act consumer products 10 item if seller gives written warranty must either be full remedy replace refund or limited Misrepresentation must involve a material fact about the product that would matter to a reasonable buyer Industrywide Liability several firms manufacture product plaintiff may bypass proving which firm injured her Time limitations statute 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 1 Basis of bargain buyer incurs direct economic loss privity of contract btwn plaintiff defendant necessary 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 consider if damages 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 does for warranty UCC Sect 2 318 Remedy Limitation clause attempting to block recovery of certain damages UCC 2 719 allows limitation of consequential damages in express implied warranty cases unless limitation of remedy fails of its essential purpose or is unconscionable consumer goods personal injury DISCLAIMER seller attempts to eliminate liability it might otherwise have had sales contract Implied Warranty Disclaimers 1 exclude merchantability use word merchantability make conspicuous 2 exclude fitness writing conspicuous 3 use terms as is etc 4 buyer s inspection of goods refusal to inspect 5 previous dealing 6 usage of trade 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 DEFENSES Traditional offer complete defense product misuse if not foreseeable assumption of risk contributory negligence Modern comparative principles apportionment of damages on the basis of relative fault CH 9 CONTRACTS Standardized Form Contracts preprinted by one party presented to the other party for signing nonnegotiable ELEMENTS 1 Voluntary agreement offer acceptance 2 Consideration 3 Capacity 4 Legality TYPES Bilateral both parties exchange promises v Unilateral one party makes promise Valid meets legal requirements binding enforceable v Unenforceable meets legal requirements not enforceable b c of some other rule v Voideable 1 parties have right to cancel contract v Void no legal obligation Express parties directly stated terms v Implied surrounding facts indicated agreement Executed all parties fully performed duties v 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 to a higher standard sale of goods less personal QUASI CONTRACT 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 exists PROMISSORY ESTOPPEL 1 promise made 2 that the promisor should foresee is likely to induce reliance 3 reliance on the promise by the promisee 4 injustice as a result of reliance CH 10 OFFER Offerors determine terms conditions gives offeree the power to bind her to the contract simply by accepting offerees bound only by terms of which they had actual reasonable notice ELEMENTS 1 Present intent to contract offeror must indicate the intent to enter the contract upon acceptance objective standard reasonable person test 2 Definiteness of terms shows an intent to contract Common Law unlikely to be enforced if important terms left open UCC gap filling allows courts to fill in terms focuses on underlying intent 3 Communication to offeree Advertisements treated as invitations to offer unless highly specific Rewards treated as unilateral contracts Auctions sellers make invitations to offer can accept
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