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.
