Chapter 20 - PRODUCT LIABILITY - Chapter 20 PRODUCT LIABILITY The law of product liability the body of legal rules governing civil lawsuits for losses

Chapter 20 - PRODUCT LIABILITY - Chapter 20 PRODUCT...

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Chapter 20: PRODUCT LIABILITY The law of product liability : the body of legal rules governing civil lawsuits for losses and harms resulting from a defendant’s furnishing of defective goods. The 19 th Century A century or so ago, the rules governing suits for defective goods were very much to manufacturers’ and other sellers’ advantage. This was the era of caveat emptor (let the buyer beware). There usually was no liability unless the seller had made an express promise to the buyer and the goods did not conform to that promise. In both contract and negligence cases, the doctrine of “no liability outside privity of contract” —that is, no liability without a direct contractual relationship between plaintiff and defendant—often prevented plaintiffs from recovering against parties with whom they had not directly dealt. The 20 th and 21 st Centuries Product liability law has moved from its earlier caveat emptor emphasis to a stance that sometimes resembles caveat venditor (let the seller beware). This is the belief that sellers, manufacturers, and their insurers are better able to bear the economic costs associated with product defects, and that they usually can pass on these costs through higher prices. Thus, the economic risk associated with defective products can be spread throughout society, or “socialized” . The Current Debate over Product Liability Law Modern product liability law and its socialization-of-risk rationale have come under increasing attack over the past three decades. Such attacks often focus on the increased costs sellers and manufacturers sometimes encounter in obtaining product liability insurance. Theories of Product Liability Recovery Some theories of product liability recovery are contractual and some are tort-based. o The contract theories involve a product warranty —an express or implied promise about the nature of the product sold. In warranty cases, plaintiff’s claim that the product failed to live up to the seller’s promise. o In tort cases, on the other hand, plaintiffs contend that the defendant was negligent or that strict liability should apply. Express Warranty Creation of an Express Warranty states that an express warranty may be created in any of the three following ways: 1. In an affirmation of fact or promise regarding the goods becomes part of the basis of the bargain (a requirement to be discussed shortly), there is an express warranty that the goods will confirm to the affirmation or promise. 2. Any description of the goods that becomes part of the basis of the bargain creates an express warranty that the goods will conform to the description. Descriptions include (1) statements that goods are of a certain brand, type or model, (2) adjectives that characterize the product (e.g. “shatterproof), and (3) drawings, blueprints, and technical specifications.
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