Product liability is the obligation of a seller of products, which due to a defect can cause damages to the consumers, purchases and even bystanders. The responsibility for the safety of a product is in the hands of all sellers that are in the distribution chain of the product. They include; manufacturers, wholesalers, and retailers of the products. Harmful products to the consumers have a cause of action against the sellers. It is a jurisdictional requirement in several countries that products meet expectations of the consumers. Products that have unexpected defects do not meet consumer expectations. Laws of product liability are based on case laws that vary in different jurisdictions. Product liability litigations is an effective tool for ensuring consumer protection in the U.S. The laws have changed from caveat emptor that gave the consumers responsibility to beware to strict liability for producing defect products that are dangerous to consumers. This paper gives a discussion on product liability for business law class in broad aspects.
Product liability verdicts have led to increased cost of consumer goods. Manufacturers argue that these verdicts have also enriched the plaintiffs’ attorneys. There are various strategies that businesses use to reduce damages that sometimes cost them many dollars. These include but are not limited to TORT reforms from state Congress and legislature. In U.S, Federal product liability law does not exist per se (Daller, 2016). Product liability claims have their basis on state laws and relevant commercial statues that are formed on the Uniform Commercial Code (UCC). These bodies pertain to warranty rules that pose regulations to manufacturers and consumer products. Previous cases held it that a product liability arises when the product is sold in marketplaces under contracts known as privity of contract between the plaintiff and the defendant. However, currently, privity requirement are not considered, and the plaintiff does not have to be the purchaser of the product. All people that are injured by a product can recover in tort for their injuries, so long as the products were in the stream of commerce (Marucheck, Greis, Mena & Cai, 2011).
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Many jurisdictions have plaintiffs’ cause of action based on four theories: Breach of warranty, negligence, strict tort liability and misrepresentation. Negligence is the failure to exercise good or ordinary care. This implies that an individual who has a legal obligation either performed malfeasance (doing a wrong thing) or nonfeasance (failing to do the right thing). Lack of reasonable care in production and assembly of products that can cause harm lead to manufacturers being held liable for negligence. An example is in the case of Mattel Corporation that made toys for children using lead paint which is harmful to human health. The company had to make numerous recalls in many toys. In a case where employees of a manufacturing company do not do their work appropriately or if the management team sanctioned inappropriate procedure of manufacturing products and the outcomes were unsafe for consumption, the company may be held negligent. Taking a cause of action based on negligence requires a plaintiff to demonstrate a sufficient causal relation between the damage incurred and the defendant’s negligence (Sweet, Schneier & Wentz, 2015).
Breach of warranty is the failure to fulfill the terms of a promise, representation or claim made that concern products’ quality or type. The law assumes that the manufacturer issues certain warranties regarding consumer goods sold. Misrepresentation in advertisements and promotion of sales gives consumers false information on the safety of the product by failing to draw attention to hazards of using the products. A cause of action lies in negligent misrepresentation or intentional concealment of hazards of the product. In the case of misrepresentation, the plaintiff’s recovery lies in the ability of the plaintiff to prove his reliance was upon the representations that were made. Many international corporations attempt to reassure confidence of the consumers through advertisements and sales promotion but often use substandard processes of inspections and have lawless business partners in China. Mattel was held liable of mandated class action suits and had to pay a lot of dollars in federal fines and medical liabilities for kids who were at risk of poisoning by the lead content in the company’s products Consumer Product Safety Commission (CPSC) spearheaded the case of Mattel Corporation. CPSC established guidelines that promote moral and ethical standards in which Mattel had to base its newly established business principles. The management team of Mattel had to go to China at least once annually to ensure that risks are mitigated, and the productions are conducted safely (Hora, Bapuji & Roth, 2011).
Strict tort liability is based on the extension of responsibilities of the manufacturers to individuals who may be injured by the product, even if there is no fault. Injured people with no direct relation to the product such as guests and passersby may take action for the damages that are caused by the product. The injured party has to provide proof that the product was defective and the defect was the cause of the injury hence rendering the product dangerous.
There are varying defenses available to the manufacturers in the action of product liability. The defenses depend on the jurisdictions that the actions are filed. However, some legal principles constitute partial or full defenses to actions of product liability. Such principles include learned intermediaries, contributory negligence, and declaimers. Regarding product liability actions under the principle of warranty, the defendant might assert defense by declaimers in association with consumption of commodities in question. Under USS Section 2-316(2) of the U.S constitution, a manufacturer can make written declaimer of warranty of merchantability if the claim is conspicuous. However, the Federal Trade Commission Improvement Act of 1974, 15 USC Section 2301 provides that there cannot be a declaimer of implied warranty if there is a written warranty given to the purchaser of a product (Baldwin, 2015).
A defense based on contributory negligence asserts that the plaintiff is negligent since he or she fails to take reasonable care to protect his or herself from damages and this kind of negligence contribute majorly to the injury. Even though the contributory negligence of a plaintiff leads to the defense of the manufacturer, some courts do not take contributory negligence as a viable defense. However, this varies from states to states and jurisdictions to jurisdictions. The defense based on contributory negligence can be denied where the contributory negligence is brought by failure to inspect or failure to know the hazards of the product. In a case where the plaintiff knows about the risks and chooses to assume them when using the product, the defendant can present contributory negligence as a defense to strict liability. Learned intermediaries assert that if manufacturers gave a warning and clear instructions to an intermediary who then sold a commodity to the plaintiff, product liability might not be imposed.
Product liability gives consumers protection from harmful products. Manufacturers have to produce goods that are safe for consumption and do not put consumers in danger in any way. Consumers may take a course of action in case the products they use are harmful to their health or pose a danger to them. However, there are cases in which the manufacturers can defend themselves from such actions.
References
Baldwin, S. (2015). Product liability case digest 2016-2017 . Place of publication not identified: Wolters Kluwer Law & Bus.
Daller, M. F. (2016). Tort law desk reference: A fifty state compendium,2016 edition . S.l.: Wolters Kluwer Law & Bus.
Hora, M., Bapuji, H., & Roth, A. V. (2011). Safety hazard and time to recall: The role of recall strategy, product defect type, and supply chain player in the US toy industry. Journal of Operations Management , 29 (7), 766-777.
Marucheck, A., Greis, N., Mena, C., & Cai, L. (2011). Product safety and security in the global supply chain: Issues, challenges, and research opportunities. Journal of Operations Management , 29 (7), 707-720.
Sweet, J., Schneier, M. M., & Wentz, B. (2015). Business law for design professionals, construction managers, and contractors . Stamford, CT : Cengage Learning.
