Product Liability

1. Product Liability • Negligence • Failure to exercise due care in design, materials, production, assembling, inspecting, testing and placing warnings • No privity of contract • Federal statutes establish negligence per se in some cases

2. Product Liability • Misrepresentation • Fraudulent • No element of defective design, materials, inspection, etc • Nonfraudulent • Innocent misrepresentation • Material misrep + intent + justifiable reliance

3. Product Liability • Strict liability • RS Second of Torts Section 402A • One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer or to his property, if • The seller is engaged in the business of selling such a product, and • It is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.

4. Product Liability • Strict liability • RS (cont’d) • The rule applies although • The seller has exercised all possible care in the preparation and sale of his product, and • The user or consumer has not bought the product from or entered into any contractual relation with the seller

5. Product Liability • Strict liability • Intent is irrelevant • Liability varies by jx, personal injuries only • Public policy is to • Protect consumers, • Impose liability even though no privity • Those most able to bear the cost should pay for injuries

6. Product Liability • Strict liability – 6 requirements • Defective condition when sold • Engaged in the business • Unreasonably dangerous due to defect • Injury • Proximate cause • No substantial change to product

7. Product Liability • Strict liability • Bystanders • Embs v. Pepsi-Cola Bottling Co. • The loss for injuries to bystanders whose injury from the defect is reasonably foreseeable should be placed on those best able to pay the lass, who can then distribute such risk among themselves by means of insurance and indemnity agreements

8. Product Liability • Strict liability • Product defect • Unreasonably dangerous if • The product was dangerous beyond the expectation of the ordinary consumer • A less dangerous alternative was economically feasible for the manufacturer but the manufacturer failed to produce it • Flaw in manufacturing

9. Product Liability • Strict liability • Product defect • Design defect • Must show a safer alternative available and economically feasible • Social utility • Desirability • Obviousness of danger • Probability and seriousness of injuries • Possibility of redesign to eliminate danger

10. Product Liability • Strict liability • Misuses of products • Lutz v. National Crane Corp. • Manufacturers are liable for reasonably foreseeable misuses • Inadequate warnings • Duty to warn – failure = breach • Market-share liability • Lessors, crashworthiness, suppliers

11. Product Liability • Defenses to Product Liability • Assumption of risk • Knew and appreciated the risk • Voluntarily assumed the risk, even though unreasonable to do so • Product misuses • Comparative negligence

12. Product Liability • Defenses • Commonly known dangers • Knives, matches, guns, alcohol, tobacco? • Knowledgeable user • Travelers Insurance v. Federal Pacific Electric Co. • Federal preemption • State laws may not be preempted – fraudulent misrepresentation or • No congressional intent in legislative history

13. Product Liability • Defenses • Statutes of Limitations and Repose • Personal injury must be brought within 1-2 years after the injury, or if your injury/disease is not discovered, the statute may be tolled until you discover it. • Statutes of repose place a final deadline, even if you have not discovered your diseases or been injured yet.