Chapter 7 Strict Liability and Product Liability PowerPoint Slides to accompany The Legal Environment of Business and Online Commerce 5E, by Henry R. Cheeseman Chapter 7 Strict Liability and Product Liability Prentice Hall © 2007

Product Liability The liability of manufacturers, sellers, and others for the injuries caused by defective products Prentice Hall © 2007

Negligence and Fault Negligence Misrepresentation A tort related to defective products where the defendant has breached a duty of due care and caused harm to the plaintiff Misrepresentation When a seller or lessor fraudulently misrepresents the quality of a product and a buyer is injured by the product Prentice Hall © 2007

Strict Liability Strict liability is imposed without regard to fault. All parties in the chain of distribution of a defective product are strictly liable for injuries caused by that product. Applies to goods, not services Privity of contract between plaintiff and defendant is not required. Prentice Hall © 2007

Comparing Negligence and Strict Liability Negligent party is liable. Consumer injured by defective product Manufacturer Distributor Retailer All in the chain of distribution are liable. Prentice Hall © 2007

Defective Product In order to recover under strict liability, the injured party must show that the product causing the injury was defective. A product can be found to be defective in many ways. Prentice Hall © 2007

Common of Product Defects Manufacture Design Failure to warn Packaging Failure to provide adequate instructions Prentice Hall © 2007

Defects in Manufacture Manufacturer fails to properly assemble a product. Manufacturer fails to properly test a product. Manufacturer fails to adequately check the quality of a product. Prentice Hall © 2007

Defects in Design Defects that occur when a product is improperly designed Risk-utility analysis may be applied Prentice Hall © 2007

Crashworthiness Doctrine Automobile manufacturers are under a duty to design automobiles so they take into account the possibility of harm from a person’s body striking something inside the automobile in the case of a car accident. Prentice Hall © 2007

Failure to Warn A defect that occurs when a manufacturer does not place a warning on the packaging of products that could cause injury if the danger is unknown There is no duty to warn of generally known dangers. Prentice Hall © 2007

Defect in Packaging Occurs when a product has been placed in packaging that is insufficiently tamperproof Prentice Hall © 2007

Failure to Provide Adequate Instructions Sellers must provide adequate instructions for the safe assembly and use of the products they sell. Prentice Hall © 2007

Defenses to Product Liability Generally known danger Government contractor defense Assumption of the risk Misuse of the product Prentice Hall © 2007

Defenses to Product Liability Correction of product defect Supervening event Statute of Limitation and Statute of Repose Prentice Hall © 2007

Contributory Negligence A defense that says a person who is injured by a defective but has been negligent and has contributed to his or her own injuries cannot recover from the defendant Prentice Hall © 2007

Comparative Fault A doctrine that applies to strict liability actions that says a plaintiff who is contributorily negligent for his or her injuries is responsible for a proportional share of the damages Prentice Hall © 2007