Product LiabilityIntroductionSlide 33 Main Areas of Product LiabilityBrief HistoryCaveat EmptorGovernment Steps InMacPherson v. Buick Motor Co.Product Safety LawProduct Liability LawTort of NegligenceTort of Strict LiabilityContract Law of Sales or WarrantyDefenses to Product LiabilityFinancial LossPreventionOrganizationEducationNew-Product ReviewInitial Production ReviewControl of Warranties, Advertisements, Agreements, and the LikeWarning Labels and InstructionsComplaints and ClaimsRetention of Records and Document controlISO 9000 DocumentsProduct-Recall PlanSubrogation, Risk Criteria, Standards, Audit, Customer Service, and RedressTQM PrinciplesBreak TimeActivity TimeGood ExamplesMore ExamplesBad ExamplesDifferent LawsSlide 35Quiz TimeBenedi v. McNeil-P.P.C.ResultsLakin v. Senco Products, Inc.Slide 40Elsroth v. Johnson & JohnsonResultAny Questions?Product LiabilityProduct LiabilitySAI KRISHNA CHARY KUMBOJUSAI KRISHNA CHARY KUMBOJUSRIKANTH BANDARUSRIKANTH BANDARUDAVID DRISKODAVID DRISKOIntroductionIntroductionEstimated that 50 million product Estimated that 50 million product accidents occur annuallyaccidents occur annuallyCosts businesses and organizations Costs businesses and organizations $50 billion (U.S.)$50 billion (U.S.)Causes increase in insurance costsCauses increase in insurance costsLarge companies can pass the Large companies can pass the expenditure to the customersexpenditure to the customersSmall businesses often go bankruptSmall businesses often go bankruptProduct LiabilityProduct Liabilitythe responsibility of manufacturers, the responsibility of manufacturers, distributors and sellers of products to distributors and sellers of products to the public, to deliver products free of the public, to deliver products free of defects which harm an individual or defects which harm an individual or numerous persons and to make good numerous persons and to make good on that responsibility if their products on that responsibility if their products are defective are defective3 Main Areas of Product Liability3 Main Areas of Product LiabilityBehavior and knowledge of the userBehavior and knowledge of the userEnvironment where the product is Environment where the product is usedusedDesign flawsDesign flawsThe first two are difficult to mitigateThe first two are difficult to mitigateDesign flaws is the area that TQM Design flaws is the area that TQM has the greatest control overhas the greatest control overBrief HistoryBrief HistoryAncient TimesAncient TimesSample of grain covers whole harvestSample of grain covers whole harvest1414thth Century CenturyVery difficult to sue manufacturer, Very difficult to sue manufacturer, simple productssimple productsMid 1700’sMid 1700’sCaveat emptor was the prevailing legal Caveat emptor was the prevailing legal mindsetmindsetCaveat EmptorCaveat EmptorBuyer Beware – Buyer Beware – based on Smith’s based on Smith’s economy policieseconomy policiesPrivacy of contractPrivacy of contractAllowed lawsuits Allowed lawsuits only one step only one step Fostered Industrial Fostered Industrial Revolution by Revolution by limiting limiting manufacturers manufacturers liabilityliabilityStep of ProductsStep of ProductsManufacturerManufacturerWholesalerWholesalerRetailerRetailerCustomerCustomer““Customer” refers Customer” refers to the person who to the person who actually bought the actually bought the itemitemGovernment Steps InGovernment Steps InInherent or imminently dangerous Inherent or imminently dangerous products need regulationproducts need regulation1906 Congress passes Federal Food 1906 Congress passes Federal Food and Drug Actand Drug ActCreates government oversight of Creates government oversight of food and drugsfood and drugsAllows product liability lawsuits to be Allows product liability lawsuits to be brought against drug manufacturersbrought against drug manufacturersMacPherson v. Buick Motor Co.MacPherson v. Buick Motor Co.1916 Landmark case for products 1916 Landmark case for products liabilityliabilityMade manufacturer liable to final Made manufacturer liable to final customercustomerThis case is the reason tires are not This case is the reason tires are not covered under car warranteescovered under car warranteesProduct Safety LawProduct Safety LawConsumer Product Safety Act 1972Consumer Product Safety Act 1972Protects consumers from unreasonable riskProtects consumers from unreasonable riskEstablishes uniform safety standardsEstablishes uniform safety standardsResearch and investigation into cause and Research and investigation into cause and prevention of related deaths, injury, or illnessprevention of related deaths, injury, or illnessOnly covers products used in or around Only covers products used in or around household and schools and for recreationhousehold and schools and for recreationExemptionsExemptionsCars, boats, planes, food, drugs, tobacco, and Cars, boats, planes, food, drugs, tobacco, and poisonpoisonProduct Liability LawProduct Liability LawTort of negligenceTort of negligenceTort of strict liabilityTort of strict liabilityContract law of sales or warrantyContract law of sales or warrantyTort of NegligenceTort of NegligenceClassic theory of products liabilityClassic theory of products liabilityMust prove manufacturer was Must prove manufacturer was carelesscarelessFocuses on manufacturer’s conductFocuses on manufacturer’s conductVaries from state to stateVaries from state to stateMost states going away from allowing Most states going away from allowing product liability under negligenceproduct liability under negligenceTort of Strict LiabilityTort of Strict LiabilityOne who sells a product in a defective One who sells a product in a defective condition that is unreasonably dangerous condition that is unreasonably dangerous to a consumer is liable for harm caused to to a consumer is liable for harm caused to the user or the user’s propertythe user or the user’s propertyProduct Liability sued under this tort in Product Liability sued under this tort in many statesmany statesAllows the injured party to sue all the way Allows the injured party to sue all the way through the steps of productsthrough the steps of productsAllows user of product to sue not just Allows user of product to sue not just purchaser of productpurchaser of
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