Prentice Hall © PowerPoint Slides to accompany The Legal Environment of Business and Online Commerce 4E, by Henry R. Cheeseman Chapter 6 Product and Strict Liability

Prentice Hall © Warranty of Quality Seller’s or lessor’s assurance to buyer or lessee that the goods meet certain standards of quality Warranties may be expressed or implied

Prentice Hall © Express Warranty Affirmation that the goods meet certain standards of quality, description, performance, or condition

Prentice Hall © Implied Warranty of Merchantability Goods must be fit for the ordinary purposes for which they are used Goods must be adequately contained, packaged, and labeled Goods must be of an even kind, quality, and quantity within each unit Goods must conform to any promise or affirmation of fact made on the container Quality of the goods must pass without objection in the trade Fungible goods must meet a fair average or middle range of quality

Prentice Hall © Implied Warranty of Fitness for Human Consumption A warranty that applies to food or drink consumed on or off the premises of restaurants, grocery stores, fast- food outlets, and vending machines

Prentice Hall © Implied Warranty of Fitness for a Particular Purpose Implies that the goods are fit for the purpose for which the buyer or lessee acquired the goods if: The seller or lessor has any reason to know the particular purpose for which The seller or lessor makes a statement that the goods will serve that purpose The buyer of lessee relies on the statement and buys or leases the goods

Prentice Hall © Warranty Disclaimers Statements that negate express or implied warranties Written disclaimers must be conspicuously displayed to be valid Unconscionable disclaimers will not be enforced by a court

Prentice Hall © Other Warranty Issues Overlapping and inconsistent warranties Third-party beneficiaries of warranties Damages recoverable for breach of warranty Statute of limitations

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

Prentice Hall © Tort Liability Based on Fault Negligence 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 thereby

Prentice Hall © Strict Liability Strict liability is imposed irrespective of fault All parties in the chain of distribution of a defective product are strictly liable for injuries caused by that product Privity of contract between plaintiff and defendant is not required The doctrine applies even if the injured party had no contractual relations with the defendant

Prentice Hall © 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 © Defects in Design Defects that occur when a product is improperly designed

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

Prentice Hall © 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

Prentice Hall © Other Product Defects Failure to provide adequate instructions Inadequate selection of component parts or materials Improper certification of the safety of a product

Prentice Hall © Defenses to Product Liability Supervening or intervening event Generally known dangers Government contractor defense Assumption of risk Misuse of the product Statutes of limitation and statutes of repose Contributory negligence Comparative negligence

Prentice Hall © Contributory and Comparative Negligence 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 Comparative negligence 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