Chapter 14

PRODUCTS LIABILITY

“Products liability” refers to the liability of a seller of a chattel which, because of a defect, causes injury (usually personal) to its purchaser, user, or sometimes, a bystander. The term is used here to include both situations where P purchased the item directly from D and those where there was no contractual relationship between P and D.

• Importance:  Products liability is the fastest-growing, and probably now the most economically significant, branch of tort law.
• Three theories:  There are three main theories under which a seller of a chattel can be liable to one who is injured: (1) negligence; (2) warranty; and (3) strict liability.
• Negligence:  The general rules of negligence apply to one who sells a product. Most commonly, negligence theory is used to make a manufacturer liable where he failed to use reasonable care in designing, manufacturing or labeling the product.
  • Privity:  A negligent manufacturer is liable to a “remote” purchaser (one who bought from some intermediary in the distribution channel), or to a “user” or “bystander.” In other words, “privity” is not required. The only requirement is that P have been in some sense a “foreseeable” victim, a requirement that is usually satisfied.
• Warranty:  There are two main ways in which a seller of goods may be liable under a warranty theory when the item causes injuries:
  • Express warranties:  A seller may expressly warrant that her goods have certain qualities. If the goods turn out not to have these qualities, the purchaser (or, possibly, other affected persons) may sue for this breach of warranty. Most commonly, a seller breaches an express warranty by making a false claim about the product’s attributes in advertising or on the label.
  • Implied warranty:  Alternatively, an implied warranty about the quality of the goods can come into existence from the mere fact that the seller has offered the good for sale.
    • Merchantability:  Most importantly, a merchant in goods of a particular type is held to automatically warrant that they are “merchantable” (i.e., “fit for the ordinary purposes for which such goods are used”).
    • Fitness for particular purpose:  Also, a seller may be found to implicitly warrant that the goods are “fit for a particular purpose” – this warranty arises where the seller knows that the buyer wants the goods for a particular purpose, and the buyer relies on the seller’s recommendation of a suitable product.
• Strict liability:  Virtually all states apply the doctrine of “strict product liability.” Under that doctrine, a seller of a product is liable without fault for personal injuries (or other physical harm) caused by the product if the product is sold: (1) in a defective condition that is (2) unreasonably dangerous to the user or consumer.