CHAPTER 20 Product Liability a set of rules that applies to civil lawsuits that are filed when people are injured as a result of defendants providing defective products Evolution of Product Liability Law Shift from caveat emptor let the buyer beware caveat venditor let the seller beware 19th Century Governing suits for defective goods manufacturers and other sellers advantage Era of caveat emptor let the buyer beware Contract cases usually no liability unless seller made an express promise to buyer and goods didn t conform to that promise Negligence cases no liability without faults principle was widely accepted o Plaintiffs often had difficulty proving negligence as evidence was under defendants control Both contract negligence some call for tort reform advocates propose procedural limits on the ability to file claims capping the awards of damages 20th Century Situations changed to Caveat Venditor let the seller beware manufacturers and distributors should bear the loss of defective products o Socialization of risks spread amongst the widest group of people possible Theories of Product Liability Recovery Contract theories product warranty expressed or implied promise about the nature of the product sold Warranty cases Plaintiffs claim product failed to live up to the sellers promise Tort cases plaintiffs contend defendant was negligent and strict liability should apply Express Warranty created in three ways 1 Affirmation of fact or promise about good becomes part of the basis of the bargain 2 Description of goods that becomes part of the basis of bargain creates an express warranty that the goods will conform to the description 3 Sample or model of goods to be sold creates an express warranty that goods will conform to sample Advertising create an expressed warranty or sales talk What if there are multiple expressed warranties and they conflict Two rules 1 Technical specifications for a product trump any contrary or conflicting expressed warranty that is created by the sample or model or general descriptive language 2 Samples and models trump general descriptive language Felley Case Basic issue whether the defendants statement breach expressed warranty Implied Warranty of Merchantability seller must be a merchant in the goods of the kind sold If the goods are fit for the ordinary purpose for which such goods are used the goods meet the reasonable expectations of the average consumer most important for tests Goods that fail to function properly or have harmful side effects that impact significant number of people are not merchantable Drugs are not merchantable with respect to drugs if it was reasonably foreseeable that large numbers of consumers would suffer harmful side effects Crow Case merchantability Hong Case o Basic Issue whether or not CarMax breached the implied warranty of o Holding granted in favor of CarMax plaintiff s could not prove that the car was defective when it was purchased you need to be able to show that o Basic Issue were the reasonable expectations of the consumer met o Holding court denies motion for summary judgment by Roy Rogers need to have a trial to decide whether a reasonable consumer would find Implied Warranty of Fitness warranty of fitness for a particular purpose seller must know the specific purposes of the goods o seller has reason to know a particular purpose for which buyer requires the goods o seller has reason to know that buyer is relying on sellers skill or judgment for the selection of suitable goods o buyer actually relies on sellers judgment in purchasing the good o The first one only applies to merchants the second one applies whether the seller Two important differences is a merchant or not o The first one applies to the ordinary purpose for which goods are sold the second one applies to the particular purpose for which the goods were sold Three factors that would prevent the buyer from winning o You the buyer inspect the goods before you use them o If you are more expert than seller with regard to the product you re buying o If you the buyer insist on being sold a particular brand and the brand cannot meet the specific need you are trying to meet Tort Based Theory Negligence negligence theory plaintiff argues defendant breached warranty by creating a product that had foreseeable risk o negligent manufacture of goods help plaintiffs modern discovery rules res ipsa loquitar o negligent inspection duty to inspect product for defect that create a reasonably foreseeable risk of harm if those inspections are practicable o negligent failure to provide adequate warnings magnitude or severity ease or difficulty of providing an appropriate warning likely effectiveness of a warning no duty to warn if risk is open and obvious o negligent design industry practices time manufactured state of the art compliance or non with gov t safety regulations risk utility test availability and effectiveness of alternative deigns cost of safer designs designs social utility Croskey Case o Basic Issue if there was negligence under theory of design should he have been allowed to introduce these prior examples of similar injuries o Holding evidence of similar incidence may be introduced to show design defect if the prior defects are substantially similar appeals court reversed and case was remanded for new trial Tort Based Theory Strict Liability Section 402a A seller engaged in the business of selling a product is liable for the physical harm or property damage suffered by the ultimate user or consumer of the product if the product was in a defective condition unforeseeably dangerous to the user o Does not require plaintiff s to prove a breach of duty Applies to everybody in the chain distribution three conditions for a defendant to be strictly liable under Section 402a for the defective product o Seller must be engaged in business of selling the product that harmed the plaintiff binds only parties resemble UCC merch as they regularly sell product o Product must be defective when it is sold and it must be unreasonably dangerous as a result of the defect o Avoid 402A where product was substantially modified If you are buyer you buy the product and then you modify the product in some way and that modification causes the harm then the defendant is off the hook restatement second tort strict liability makes it easier to prove breach of duty so sellers pass on these costs through higher prices stimulates manufactures to take more care in designing and creating
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