Product Liability In Law

Business Law: Product Liability

Term	Definition
Express Warranty	legally enforceable promises from the seller
Express warranties are created by seller	Do Not Include Opinions (ie. best phone ever)
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Four Ways to Create an Express Warranty
Orally
Written
Demonstration
Display
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Implied Warranty of Merchantibility
Comes with every product
Product fit for ordinary Uses (of fair or average quality)
Given by merchant sellers only
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Term	Definition
Merchant Seller	Everybody that had anything to do with the making of your product.
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Question	Answer
Implied Warranty of Fitness for a particular purpose	Implied Warranty can be discarded with use of a disclaimer. ie. "Sold As Is" or "With All Faults"
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Four Elements to Implied Warranty of Fitness for a Particular Purpose
Seller has skill/judgement in use of product
Buyer relies on skill/judgement
Seller knows of buyers reliance; and
Seller makes a recommendation
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Privity Standards in Warranty	Must have privity to sue for breach of warranty
Privity = legal relationship between seller and any of the following:
A. Buyer & family/guests
B. Any natural person reasonably expected to use product & gets injured
C. Any person expected to use product & gets injured (B & C are similar, B is for people and C is for corporations)
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Strict Liability
Seller must be a merchant
Product is unreasonably dangerous when it left seller's control
Product reaches user substantially unchanged
Does not matter if seller used all possible care of making product
Does not matter that user is not the buyer
Damages
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Unreasonably Dangerous
Can be foreign object in product
Design defect - must be designed with all foreseeable uses in mind
Proper warnings and instructions
Improper manufacturing, packaging, or handling (doesn't come out as designed)
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Negligence	Similar to tort of negligence
Must prove - Negligently made product; or
Must prove seller knew of defect before product sold; or
Must prove allowed sales to continue after aware of defect
Allows for punitive damages (punitive damages are designed to punish, and are usually big to send a message)
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Defenses for Manufacturing Negligence
Misuse/Abnormal use
Contributory/Comparative Negligence (just like contributory/comparative torts)
Assumption of risk (if there is a recall and you ignore it, you assume the risk)
Commonly known dangers (knives are sharp, scissors cut, etc.)
Knowledgeable user (someone w/ special education or work experiece w/ a product)
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