Product liability refers to a supplier’s liability for a product that causes personal injury or property damage. Typically, products are considered tangible personal property but some kinds of intangible substances like gas are considered products. Liability can arise from a defect in a product or from a false misrepresentation of the product. Suppliers subject to liability include the manufacturer, the assembler, the wholesaler, and the store that sold the product.

Development of Product Liability Law

Suppliers have not always been held liable for injuries resulting from defective products. In fact, just as early English courts had abided by the theory of “caveat emptor,” also known as buyer beware, U.S. courts also required that the buyer discover obvious and hidden defects. In the 1800s, U.S. courts began to recognize implied warranties of merchantability. In effect, buyers were no longer responsible for finding defects in the product under contract law. In the 1960s, the Restatement (Second) of Torts incorporated many of the modern rules that now govern product liability.

Product Defects

To establish product liability under tort or contract law, a plaintiff must prove that the product was defective when it left the control of the defendant. There are three types of defects: manufacturing defects, design defects, and inadequate warnings.

Manufacturing Defects

Manufacturing defects are unplanned defects that are the result of mistakes in the manufacturing process. A defect occurs when a product is manufactured differently from the other products, which results in it becoming more dangerous than if made properly. A product may be considered defective if it is “unreasonably dangerous.” When making this evaluation, courts will measure whether the risk outweighs the benefits or if it is more dangerous than expected by a typical consumer.

Design Defects

A design defect typically occurs because of a defective design. Unlike a manufacturing defect, a design defect is the result of a plan. When evaluating a poorly designed product, a court will look at whether the product was safe for its intended use or whether the product could have been made safe without a substantial impact on its use or price.

Inadequate Warnings

A product that is designed and manufactured properly may still be considered defective if the manufacturer fails to give warnings or instructions about how to operate the product safely.

Theories of Liability

State laws govern product liability claims. If a product is defective, a plaintiff may seek recovery under the following theories of liability: negligence, strict liability, and breach of contract. These are the most common theories, but other claims can be brought.

Negligence

A plaintiff may sue a supplier for negligence. Negligence occurs when a person fails to exercise the standard of care that a reasonably prudent person would have exercised in a similar circumstance. To recover under negligence, the plaintiff must prove the following:

1) The defendant owed a duty to sell a product that would not injure the plaintiff

2) The defendant breached that duty (the defendant did or should have known about the defect or the defendant’s negligent conduct led to the delivery of the defective product)

3) The defendant’s breach of duty was the actual and proximate cause of the plaintiff’s injury; and

4) The plaintiff suffered damages because of the defendant’s negligence.

Strict Liability

Unlike a negligence claim, recovery under strict liability does not depend upon proving the negligence of the defendant. Instead, rather than offering proof of the defendant’s fault, the plaintiff may offer proof that the defendant breached the duty to provide a product free of an “unreasonably dangerous” defect. It is not necessary to prove that the defendant knew of or should have known of the defect. To recover personal injury and property damages, the plaintiff must prove that the defect was the actual and proximate cause of the injury.

Breach of Contract

A plaintiff may recover for product liability under contract law. A breach of contract occurs when there is a failure to perform one’s duties as specified in a contract. There is an implied warranty of merchantability and fitness attached to the sale of goods. Merchantable means that the goods are fit for ordinary purposes for which they will be used and fitness means that the seller is aware of how the buyer will use the goods and the product is suitable for that purpose. If proven that the product falls below the standard of the implied warranty, the contract is breached and it is unnecessary for the plaintiff to prove the defendant’s fault.

Defenses

As with other legal theories, the defendant may offer defenses. Common defenses under negligence and strict liability include contributory negligence and comparative negligence, while contract law allows the additional defenses of assumption of the risk and notice of breach.