© 2004 West Legal Studies in Business, a Division of Thomson Learning
23.1
Chapter 23Chapter 23
Product LiabilityProduct Liability
23.2
Product Liability LawProduct Liability Law
Determines when Determines when manufacturers and sellers of manufacturers and sellers of goods are liablegoods are liable
Theories of product liability Theories of product liability recovery are rules stating recovery are rules stating things a plaintiff must prove things a plaintiff must prove in order to recover damagesin order to recover damages
23.3Contract Theories of Contract Theories of Product Liability Product Liability
RecoveryRecoveryThree important contract-based Three important contract-based theories of product liabilitytheories of product liability
Express warrantyExpress warrantyImplied warranty of Implied warranty of merchantabilitymerchantabilityImplied warranty for fitness for a Implied warranty for fitness for a particular purposeparticular purpose
Each created by Article 2 of UCCEach created by Article 2 of UCCEach refers to the sale of goodsEach refers to the sale of goods
23.4
Express WarrantyExpress Warranty
Affirmations and descriptionsAffirmations and descriptions
Samples and modelsSamples and models
Basis-of-the-bargain Basis-of-the-bargain requirementrequirement
Advertisements, catalogs, Advertisements, catalogs, brochures, etc.brochures, etc.
23.5
Implied Warranty of Implied Warranty of MerchantabilityMerchantability
The merchant requirement The merchant requirement refers torefers to
Sellers who deal in products Sellers who deal in products
Sellers who deal in services or Sellers who deal in services or installations of goodsinstallations of goods
23.6
Implied Warranty of Implied Warranty of MerchantabilityMerchantability
Merchantability refers to goods thatMerchantability refers to goods that
Pass without objection in the trade Pass without objection in the trade
Are of average quality if fungible Are of average quality if fungible
Are fit for the ordinary purposes for Are fit for the ordinary purposes for which such goods are usedwhich such goods are used
Are of even kind, quality, and quantity Are of even kind, quality, and quantity within each unit within each unit
Are adequately contained, packaged, Are adequately contained, packaged, and labeled and labeled
Conform to any promises or Conform to any promises or affirmations of fact made on the affirmations of fact made on the container or labelcontainer or label
23.7
Implied Warranty Implied Warranty of Fitnessof Fitness
The seller knows of the The seller knows of the particular purpose for which particular purpose for which the buyer desires the goodsthe buyer desires the goods
The seller must have reason The seller must have reason to know that buyer is relying to know that buyer is relying on seller’s skill or judgment on seller’s skill or judgment
The buyer must actually rely The buyer must actually rely on the seller’s skill or on the seller’s skill or judgment judgment
23.8
Tort TheoriesTort Theories
Strict liability (liability Strict liability (liability without fault)without fault)
Risk spreading (liability Risk spreading (liability insurance)insurance)
Socialization of risk (passing Socialization of risk (passing costs on to consumers)costs on to consumers)
23.9
NegligenceNegligence
Improper manufacture, Improper manufacture, handling, packaging, or handling, packaging, or inspectioninspection
Duty to warn of foreseeable Duty to warn of foreseeable harmharm
Design defectsDesign defects
23.10
Strict LiabilityStrict Liability
Requirements of Section Requirements of Section 402A402A
Design in defects and failure Design in defects and failure to warnto warn
Unavoidably unsafe products Unavoidably unsafe products
Wholesalers and retailersWholesalers and retailers
23.11
The Reinstatement The Reinstatement (Third)(Third)
Manufacturing defectsManufacturing defects
Inadequate instructions or Inadequate instructions or warningswarnings
Design defects Design defects
23.12
Other Theories ofOther Theories ofProduct Liability Product Liability
Magnuson-Moss Act Magnuson-Moss Act
Misrepresentation Misrepresentation
Industry-wide liability Industry-wide liability
23.13
Type of DamagesType of Damages
Bases-of-the-bargain damages Bases-of-the-bargain damages
Consequential damagesConsequential damages
Personal injury, property damage, Personal injury, property damage, indirect economic lossindirect economic loss
Punitive damagesPunitive damages
Damages under the UCCDamages under the UCC
Tort damagesTort damages
Tort reform measuresTort reform measures
23.14
The No-Privity DefenseThe No-Privity Defense
Privity of contract is the Privity of contract is the existence of direct existence of direct contractual relationship contractual relationship between two partiesbetween two parties
Privity under the UCCPrivity under the UCC
Privity in tort casesPrivity in tort cases
23.15
Liability DisclaimersLiability Disclaimers
The easy casesThe easy cases
Express warranty disclaimersExpress warranty disclaimers
Disclaimers and tort liabilityDisclaimers and tort liability
Implied warranty disclaimersImplied warranty disclaimers
The basic testsThe basic tests
Additional ways to disclaim implied Additional ways to disclaim implied warrantieswarranties
UnconscionabilityUnconscionability
Impact of Magnuson-MossImpact of Magnuson-Moss
23.16
Defenses Involving Defenses Involving Plaintiff’s BehaviorPlaintiff’s Behavior
Traditional defensesTraditional defenses
Product misuseProduct misuse
Contributory negligenceContributory negligence
Assumption of riskAssumption of risk
Movement toward Movement toward comparative faultcomparative fault
23.17
Recap – Terms to KnowRecap – Terms to Know
Express warrantyExpress warranty
Implied warranty of fitness for a Implied warranty of fitness for a particular purposeparticular purpose
Warranty of merchantabilityWarranty of merchantability
NegligenceNegligence
Strict liability Strict liability
Restatement (Third) of TortsRestatement (Third) of Torts
DamagesDamages
Defendant’s defensesDefendant’s defenses
Top Related