products liability

ThisisProductsLiability,chapter9fromthebookTheLegalEnvironmentandBusinessLaw:ExecutiveMBAEdition(v.1.0).Fordetailsonit(includinglicensing),clickhere.

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Chapter9

ProductsLiability

LEARNING OBJECT IVES

Afterreadingthischapter,youshouldunderstandthefollowing:

1. Howproductsliabilitylawallocatesthecostsofaconsumersociety

2. Howwarrantytheoryworksinproductsliability,andwhatitslimitationsare

3. Hownegligencetheoryworks,andwhatitsproblemsare

4. Howstrictliabilitytheoryworks,andwhatitslimitationsare

5. Whateffortsaremadetoreformproductsliabilitylaw,andwhy

9.1Introduction:WhyProductsLiabilityLawIsImportant


1. Understandwhyproductsliabilitylawunderwentarevolutioninthetwentiethcentury.

2. Recognizethatcourtsplayavitalroleinpolicingthefreeenterprisesystembyadjudicatinghow

thetruecostsofmodernconsumercultureareallocated.

3. Knowthenamesofthemoderncausesofactionforproductsliabilitycases.

Inpreviouschapters,wediscussedremediesgenerally.Inthischapter,wefocusspecificallyon

remediesavailablewhenadefectiveproductcausespersonalinjuryorotherdamages.Productsliability

describesatypeofclaim,notaseparatetheoryofliability.Productsliabilityhasstrongemotional

overtonesrangingfromtheprolitigationpositionofconsumeradvocatestotheconservative

perspectiveofthemanufacturers.

HistoryofProductsLiabilityLaw

Thetheoryofcaveatemptorletthebuyerbewarethatprettymuchgovernedconsumerlawfromthe

earlyeighteenthcenturyuntiltheearlytwentiethcenturymadesomesense.Ahorsedrawnbuggyisa

fairlysimpledevice:itsworkingsareapparentapersonofaverageexperienceinthe1870swouldknow

whetheritwasconstructedwellandmadeoftheproperwoods.Mostfoodstuffs150yearsagowere

grownathomeandputupinthehomekitchenorboughtinbulkfromalocalgrocer,subjectto

inspectionandsamplingpeoplemadehomeremediesforcoughsandcoldsandmademanyoftheir

ownclothes.Housesandfurnishingswerebuiltofwood,stone,glass,andplasterfamiliarsubstances.

Entertainmentwasabookorapiano.Thestateoftechnologywassuchthatthethingsconsumedwere,

forthemostpart,comprehensibleandveryimportantmostlylocallymade,whichmeantthatthe

consumerwhosuffereddamagesfromadefectiveproductcouldconfronttheproductsmakerdirectly.

PreviousChapter NextChapterTableofContents

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Localreputationisapowerfulinfluenceonbehavior.

Thefreeenterprisesystemconfersgreatbenefits,andnoonecandenythat:materialistically,compare

theimagesketchedinthepreviousparagraphwithcircumstancestoday.Butthosebenefitscomewitha

cost,andthefundamentalpoliticalissuealwaysiswhohastopay.Considerthefollowingfamous

passagefromUptonSinclairsgreatnovelTheJungle.Itappearedin1906.Hewroteittoinspirelabor

reformtohisdismay,thepublicoutragefocusedinsteadonconsumerprotectionreform.Hereishis

descriptionofthesausagemakingprocessinabigChicagomeatpackingplant:

Therewasnevertheleastattentionpaidtowhatwascutupforsausagetherewouldcomealltheway

backfromEuropeoldsausagethathadbeenrejected,andthatwasmoldyandwhiteitwouldbedosed

withboraxandglycerin,anddumpedintothehoppers,andmadeoveragainforhomeconsumption.

Therewouldbemeatthathadtumbledoutonthefloor,inthedirtandsawdust,wheretheworkershad

trampedandspituncountedbillionsofconsumptiongerms.Therewouldbemeatstoredingreatpiles

inroomsandthewaterfromleakyroofswoulddripoverit,andthousandsofratswouldraceabouton

it.Itwastoodarkinthesestorageplacestoseewell,butamancouldrunhishandoverthesepilesof

meatandsweepoffhandfulsofthedrieddungofrats.Theseratswerenuisances,andthepackers

wouldputpoisonedbreadoutforthemtheywoulddie,andthenrats,bread,andmeatwouldgointo

thehopperstogether.Thisisnofairystoryandnojokethemeatwouldbeshoveledintocarts,andthe

manwhodidtheshovelingwouldnottroubletoliftoutaratevenwhenhesawonetherewerethings

thatwentintothesausageincomparisonwithwhichapoisonedratwasatidbit.Therewasnoplacefor

thementowashtheirhandsbeforetheyatetheirdinner,andsotheymadeapracticeofwashingthem

inthewaterthatwastobeladledintothesausage.Therewerethebuttendsofsmokedmeat,andthe

scrapsofcornedbeef,andalltheoddsandendsofthewasteoftheplants,thatwouldbedumpedinto

oldbarrelsinthecellarandleftthere.

Underthesystemofrigideconomywhichthepackersenforced,thereweresomejobsthatitonlypaid

todoonceinalongtime,andamongthesewasthecleaningoutofthewastebarrels.Everyspringthey

diditandinthebarrelswouldbedirtandrustandoldnailsandstalewaterandcartloadaftercartload

ofitwouldbetakenupanddumpedintothehopperswithfreshmeat,andsentouttothepublics

breakfast.Someofittheywouldmakeintosmokedsausagebutasthesmokingtooktime,andwas

thereforeexpensive,theywouldcallupontheirchemistrydepartment,andpreserveitwithboraxand

coloritwithgelatintomakeitbrown.Alloftheirsausagecameoutofthesamebowl,butwhenthey

cametowrapittheywouldstampsomeofitspecial,andforthistheywouldchargetwocentsmorea

pound.UptonSinclair,TheJungle(NewYork:SignetClassic,1963),136.

ItbecameclearfromSinclairsexposthatassociatedwiththemarvelsofthenmodernmeatpacking

anddistributionmethodswasfoodpoisoning:atruecostbecameapparent.Whenthetruecostofsome

moneymakingenterprise(e.g.,cigarettes)becomesinescapablyapparent,therearetwopossibilities.

First,thelegislaturecaninsomewaymandatethatthemanufactureritselfpaythecostwiththe

meatpackingplants,thatwouldbetheimpositionofsanitaryfoodprocessingstandards.Typically,

Congresscreatesanadministrativeagencyandgivestheagencysomemarchingorders,andthenthe

agencycraftsregulationsdictatingasmanyindustrywidereformmeasuresasarepoliticallypossible.

Second,thepeoplewhoincurdamagesfromtheproduct(1)sufferanddieor(2)accessthemachinery

ofthelegalsystemandsuethemanufacturer.Ifplaintiffswinenoughlawsuits,themanufacturers

insurancecompanyraisesrates,forcingreform(aswithhighpoweredmusclecarsinthe1970s)the

businessgoesbankruptorthelegislatureispressuredtoact,eitherfortheconsumerorforthe

manufacturer.

Iftheindustryhasenoughclouttobluntbyvariousmeansarobustproconsumerlegislative

responsesothatgovernmentregulationistoolaxtopreventharm,recourseishadthroughthelegal

system.Thusforallthetalkabouttheneedfortortreform(discussedlaterinthischapter),thecourts

playavitalroleinpolicingthefreeenterprisesystembyadjudicatinghowthetruecostsofmodern

consumercultureareallocated.

Obviouslythesituationhasimprovedenormouslyinacentury,butonedoesnothavetolookveryfar

tofindterribleproblemstoday.Considerthefollowing,whichoccurredin200910:

IntheUnitedStates,Toyotarecalled412,000passengercars,mostlytheAvalonmodel,for

steeringproblemsthatreportedlyledtothreeaccidents.

Portablebabyreclinersthataresupposedtohelpfussybabiessleepbetterwererecalledafterthe

deathofaninfant:theConsumerProductSafetyCommissionannouncedtherecallof30,000Nap

NannyreclinersmadebyBabyMattersofBerwyn,Pennsylvania.

Morethan70,000childrenandteensgototheemergencyroomeachyearforinjuriesand

complicationsfrommedicaldevices.Contactlensesaretheleadingculprit,thefirstdetailed

nationalestimatesuggests.

SmithandNoblerecalled1.3millionRomanshadesandrollershadesafterachildwasnearly

strangled:theConsumerProductSafetyCommissionsaysafiveyearoldboyinTacoma,

Washington,wasentangledinthecordofarollershadeinMay2009.FindLaw,APreports.

TheConsumerProductSafetyCommissionreportedthat4,521peoplewerekilledintheUnited

Statesinconsumerproductrelatedincidencesin2009,andmillionsofpeoplevisitedhospital

emergencyroomsfromconsumerproductrelatedinjuries.USConsumerProductSafety

Commission,2009ReporttothePresidentandtheCongress,accessedMarch1,2011,

http://www.cpsc.gov/cpscpub/pubs/reports/2009rpt.pdf.

Reportsaboutthepossibilitythatcellphoneusecausesbraincancercontinuetobehotlydebated.

Criticssuggestthatthestudiesminimizingtheriskwerepaidforbycellphonemanufacturers.Matt

Hamblen,NewStudyWarnsofCellPhoneDangers,ComputerworldUS,August9,2009,

accessedMarch1,2011,http://news.techworld.com/personaltech/3200539/newstudywarnsof

cellphonedangers.

Productsliabilitycanalsobealifeordeathmatterfromthemanufacturersperspective.In2009,

BloombergBusinessWeekreportedthatthecostsofproductsafetyformanufacturingfirmscanbe

enormous:PeanutCorp.,basedinLynchberg,Va.,hasbeendrivenintobankruptcysincehealth

officialslinkedtaintedpeanutstomorethan600illnessesandninedeaths.Mattelsaidthefirstof

severaltoyrecallsitannouncedin2007cutitsquarterlyoperatingincomeby$30million.Earlierthis

decade,FordMotorspentroughly$3billionreplacing10.6millionpotentiallydefectiveFirestone

tires.MichaelOrey,TakingonToySafety,BusinessWeek,March6,2009,accessedMarch1,2011,

http://www.businessweek.com/managing/content/mar2009/ca2009036_271002.htm.Businesses

complain,withgoodreason,abouttheexpensesassociatedwithproductsliabilityproblems.

CurrentStateoftheLaw

Althoughthedebatehasbeenheatedandattimessimplistic,theproblemofproductsliabilityis

complexandmostofusregarditwithahighdegreeofambivalence.Weareallconsumers,afterall,

whoprofitgreatlyfromlivinginanindustrialsociety.Inthischapter,weexaminethelegaltheoriesthat

underlieproductsliabilitycasesthatdevelopedrapidlyinthetwentiethcenturytoaddressthe

problemsofproductcauseddamagesandinjuriesinanindustrialsociety.

Inthetypicalproductsliabilitycase,threelegaltheoriesareassertedacontracttheoryandtwotort

theories.Thecontracttheoryiswarranty,governedbytheUCC,andthetwotorttheoriesare

negligenceandstrictproductsliability,governedbythecommonlaw.SeeFigure9.1"Major

ProductsLiabilityTheories".

Figure9.1 MajorProductsLiabilityTheories

KEY TAKEAWAY

Asproductsbecameincreasinglysophisticatedandpotentiallydangerousinthetwentiethcentury,

andastheseparationbetweenproductionandconsumptionwidened,productsliabilitybecameavery

importantissueforbothconsumersandmanufacturers.Millionsofpeopleeveryyearareadversely

affectedbydefectiveproducts,andmanufacturersandsellerspayhugeamountsforproductsliability

insuranceanddamages.Thelawhasrespondedwithcausesofactionthatprovideameansfor

recoveryforproductsliabilitydamages.

http://www.businessweek.com/managing/content/mar2009/ca2009036_271002.htmhttp://www.cpsc.gov/cpscpub/pubs/reports/2009rpt.pdfhttp://news.techworld.com/personal-tech/3200539/new-study-warns-of-cell-phone-dangers

EXERC ISES

1. Howdoestheseparationofproductionfromconsumptionaffectproductsliabilityissues?

2. Whatotherchangesinproductionandconsumptionhavecausedtheneedforthedevelopment

ofproductsliabilitylaw?

3. Howcanitbesaidthatcourtsadjudicatetheallocationofthecostsofaconsumeroriented

economy?

9.2Warranties


1. RecognizeaUCCexpresswarrantyandhowitiscreated.

2. UnderstandwhatismeantundertheUCCbyimpliedwarranties,andknowthemaintypesof

impliedwarranties:merchantability,fitnessforaparticularpurpose,andtitle.

3. Knowthatthereareotherwarranties:againstinfringementandasmayarisefromusageofthe

trade.

4. Seethattherearedifficultieswithwarrantytheoryasacauseofactionforproductsliability;a

federallawhasaddressedsomeofthese.

TheUCCgovernsexpresswarrantiesandvariousimpliedwarranties,andformanyyearsitwastheonly

statutorycontrolontheuseandmeaningsofwarranties.In1975,afteryearsofdebate,Congress

passedandPresidentGeraldFordsignedintolawtheMagnusonMossAct,whichimposescertain

requirementsonmanufacturersandotherswhowarranttheirgoods.WewillexamineboththeUCC

andtheMagnusonMossAct.

TypesofWarranties

ExpressWarranties

Anexpresswarrantyiscreatedwhenevertheselleraffirmsthattheproductwillperforminacertain

manner.Formalwordssuchaswarrantorguaranteearenotnecessary.Asellermaycreatean

expresswarrantyaspartofthebasisforthebargainofsalebymeansof(1)anaffirmationofafactor

promiserelatingtothegoods,(2)adescriptionofthegoods,or(3)asampleormodel.Anyofthesewill

createanexpresswarrantythatthegoodswillconformtothefact,promise,description,sample,or

model.Thusasellerwhostatesthattheuseofrustproofliningsinthecanswouldprevent

discolorationandadulterationofthePerformsolutionhasgivenanexpresswarranty,whetherhe

realizeditornot.RhodesPharmacalCo.v.ContinentalCanCo.,219N.E.2d726(Ill.1976).Claimsof

breachofexpresswarrantyare,atbase,claimsofmisrepresentation.

Butthecourtswillnotholdamanufacturertoeverystatementthatcouldconceivablybeinterpretedto

beanexpresswarranty.Manufacturersandsellersconstantlypufftheirproducts,andthelawis

contenttolettheminhabitthatgrayareawithouthavingtomakegoodoneveryclaim.UCC2313(2)

saysthatanaffirmationmerelyofthevalueofthegoodsorastatementpurportingtobemerelythe

sellersopinionorcommendationofthegoodsdoesnotcreateawarranty.Factsdo.

Itisnotalwayseasy,however,todeterminethelinebetweenanexpresswarrantyandapieceof

puffery.Asalespersonwhosaysthatastrawberryhullerisgreathasprobablypuffed,notwarranted,

whenitturnsoutthatstrawberriesrunthroughthehullerlooklikevictimsofamassacre.Butconsider

theclassiccasesofthedefectiveusedcarandthefaultybull.Intheformer,thesalespersonsaidthecar

wasinA1shapeandmechanicallyperfect.Inthelatter,thesellersaidnotonlythatthebullcalf

wouldputthebuyeronthemapbutthathisfatherwasthegreatestlivingdairybull.Thecar,

carryingthebuyerssevenmontholdchild,brokedownwhilethebuyerwasenroutetovisither

husbandinthearmyduringWorldWarII.Thecourtsaidthatthesalespersonhadmadeanexpress

warranty.WatHenryPontiacCo.v.Bradley,210P.2d348(Okla.1949).Thebullcalfturnedouttobe

sterile,puttingthefarmeronthejudicialratherthanthedairymap.Thecourtsaidthesellersspielwas

tradetalk,notawarrantythatthebullwouldimpregnatecows.Fredericksonv.Hackney,198N.W.

806(Minn.1924).

Isthereanyqualitativedifferencebetweenthesedecisions,otherthanthequartercenturythat

separatesthemandthedifferentcourtsthatrenderedthem?Perhapsthemostthatcanbesaidisthat

themorespecificandmeasurablethestatementsstandards,themorelikelyitisthatacourtwillhold

thesellertoawarranty,andthatawrittenstatementiseasiertoconstrueasawarrantythananoral

one.Itisalsopossiblethatcourtslook,ifonlysubliminally,athowreasonablethebuyerwasinrelying

onthestatement,althoughthisoughtnottobeastricttest.Abuyermaybeunreasonableinexpectinga

cartoget100milestothegallon,butifthatiswhatthesellerpromised,thatoughttobeanenforceable

warranty.

TheCISG(Article35)provides,Thesellermustdelivergoodswhichareofthe

quantity,qualityanddescriptionrequiredbythecontractandwhicharecontainedor

packagedinthemannerrequiredbythecontract.[Andthe]goodsmustpossessthe

qualitiesofgoodswhichthesellerhasheldouttothebuyerasasampleormodel.

ImpliedWarranties

Expresswarrantiesarethoseoverwhichthepartiesdickeredorcouldhave.Expresswarrantiesgoto

theessenceofthebargain.Animpliedwarranty,bycontrast,isonethatcircumstancesalone,not

specificlanguage,compelreadingintothesale.Inshort,animpliedwarrantyisonecreatedbylaw,

actingfromanimpulseofcommonsense.

ImpliedWarrantyofMerchantability

Section2314oftheUCClaysdownthefundamentalrulethatgoodscarryanimpliedwarrantyof

merchantabilityifsoldbyamerchantseller.Whatismerchantability?Section2314(2)oftheUCC

saysthatmerchantablegoodsarethosethatconformatleasttothefollowingsixcharacteristics:

1. Passwithoutobjectioninthetradeunderthecontractdescription

2. Inthecaseoffungiblegoods,areoffairaveragequalitywithinthedescription

3. Arefitfortheordinarypurposesforwhichsuchgoodsareused

4. Run,withinthevariationspermittedbytheagreement,ofevenkind,quality,andquantitywithin

eachunitandamongallunitsinvolved

5. Areadequatelycontained,packaged,andlabeledastheagreementmayrequire

6. Conformtothepromiseoraffirmationsoffactmadeonthecontainerorlabelifany

ForthepurposesofSection2314(2)(c)oftheUCC,sellingandservingfoodordrinkforconsumption

onoroffthepremisesisasalesubjecttotheimpliedwarrantyofmerchantabilitythefoodmustbe

fitfortheordinarypurposestowhichitisput.Theproblemiscommon:youbiteintoacherrypitin

thecherryvanillaicecream,oryouchokeontheclamshellsinthechowder.Issuchfoodfitforthe

ordinarypurposestowhichitisput?Therearetwoschoolsofthought.Oneaskswhetherthefoodwas

naturalasprepared.Thisviewadoptsthesellersperspective.Theotheraskswhattheconsumers

reasonableexpectationwas.

Thefirsttestissometimessaidtobethenaturalforeigntest.Ifthesubstanceinthesoupisnaturalto

thesubstanceasbonesaretofishthenthefoodisfitforconsumption.Thesecondtest,relyingon

reasonableexpectations,tendstobethemorecommonlyusedtest.

TheConventionprovides(Article35)thatunlessotherwiseagreed,thegoodssoldare

fitforthepurposesforwhichgoodsofthesamedescriptionwouldordinarilybeused.

FitnessforaParticularPurpose

Section2315oftheUCCcreatesanotherimpliedwarranty.Wheneveraseller,atthetimeshecontracts

tomakeasale,knowsorhasreasontoknowthatthebuyerisrelyingonthesellersskillorjudgmentto

selectaproductthatissuitablefortheparticularpurposethebuyerhasinmindforthegoodstobe

sold,thereisanimpliedwarrantythatthegoodsarefitforthatpurpose.Forexample,yougotoa

hardwarestoreandtellthesalesclerkthatyouneedapaintthatwilldryovernightbecauseyouare

paintingyourfrontdoorandarainstormispredictedforthenextday.Theclerkgivesyouaslowdrying

oilbasedpaintthattakestwodaystodry.Thestorehasbreachedanimpliedwarrantyoffitness

forparticularpurpose.

Notethedistinctionbetweenparticularandordinarypurposes.Paintismadetocolorandwhendry

toprotectasurface.Thatisitsordinarypurpose,andhadyousaidonlythatyouwishedtobuypaint,no

impliedwarrantyoffitnesswouldhavebeenbreached.Itisonlybecauseyouhadaparticularpurpose

inmindthattheimpliedwarrantyarose.Supposeyouhadfoundacanofpaintinageneralstoreand

toldthesametale,buttheproprietorhadsaid,Idontknowenoughaboutthatpainttotellyou

anythingbeyondwhatsonthelabelhelpyourself.Noteverysellerhastherequisitedegreeofskilland

knowledgeabouteveryproducthesellstogiverisetoanimpliedwarranty.Ultimately,eachcaseturns

onitsparticularcircumstances:TheConventionprovides(Article35):[Thegoodsmustbe]

fitforanyparticularpurposeexpresslyorimpliedlymadeknowntotheselleratthe

timeoftheconclusionofthecontract,exceptwherethecircumstancesshowthatthe

buyerdidnotrely,orthatitwasunreasonableforhimtorely,onthesellersskilland

judgment.

OtherWarranties

Article2containsotherwarrantyprovisions,thoughthesearenotrelatedspecificallytoproducts

liability.Thus,underUCC,Section2312,unlessexplicitlyexcluded,thesellerwarrantsheisconveying

goodtitlethatisrightfullyhisandthatthegoodsaretransferredfreeofanysecurityinterestorother

lienorencumbrance.Insomecases(e.g.,apoliceauctionofbicyclespickeduparoundcampusand

neverclaimed),thebuyershouldknowthatthesellerdoesnotclaimtitleinhimself,northattitlewill

necessarilybegoodagainstathirdparty,andsosubsection(2)excludeswarrantiesinthese

circumstances.Butthecircumstancesmustbesoobviousthatnoreasonablepersonwouldsuppose

otherwise.

InMenzelv.List,anartgallerysoldapaintingbyMarcChagallthatitpurchasedinParis.Menzelv.List,

246N.E.2d742(N.Y.1969).ThepaintinghadbeenstolenbytheGermanswhentheoriginalownerwas

forcedtofleeBelgiuminthe1930s.NowintheUnitedStates,theoriginalownerdiscoveredthatanew

ownerhadthepaintingandsuccessfullysuedforitsreturn.Thecustomerthensuedthegallery,

claimingthatithadbreachedtheimpliedwarrantyoftitlewhenitsoldthepainting.Thecourtagreed

andawardeddamagesequaltotheappreciatedvalueofthepainting.Agoodfaithpurchaserwhomust

surrenderstolengoodstotheirtrueownerhasaclaimforbreachoftheimpliedwarrantyoftitle

againstthepersonfromwhomheboughtthegoods.

Asecondimpliedwarranty,relatedtotitle,isthatthemerchantsellerwarrantsthegoodsarefreeof

anyrightfulclaimbyathirdpersonthatthesellerhasinfringedhisrights(e.g.,thatagalleryhasnot

infringedacopyrightbysellingareproduction).Thisprovisiononlyappliestoasellerwhoregularly

dealsingoodsofthekindinquestion.Ifyoufindanoldprintinyourgrandmothersattic,youdonot

warrantwhenyousellittoaneighborthatitisfreeofanyvalidinfringementclaims.

Athirdimpliedwarrantyinthiscontextinvolvesthecourseofdealingorusageoftrade.Section2

314(3)oftheUCCsaysthatunlessmodifiedorexcludedimpliedwarrantiesmayarisefromacourseof

dealingorusageoftrade.Ifacertainwayofdoingbusinessisunderstood,itisnotnecessaryforthe

sellertostateexplicitlythathewillabidebythecustomitwillbeimplied.Atypicalexampleisthe

obligationofadogdealertoprovidepedigreepaperstoprovethedogslineageconformstothe

contract.

ProblemswithWarrantyTheory

InGeneral

Itmayseemthatapersonassertingaclaimforbreachofwarrantywillhaveagoodchanceofsuccess

underanexpresswarrantyorimpliedwarrantytheoryofmerchantabilityorfitnessforaparticular

purpose.Inpractice,though,claimantsareinmanycasesdeniedrecovery.Herearefourgeneral

problems:

Theclaimantmustprovethattherewasasale.

Thesalewasofgoodsratherthanrealestateorservices.

TheactionmustbebroughtwithinthefouryearstatuteoflimitationsunderArticle2725,when

thetenderofdeliveryismade,notwhentheplaintiffdiscoversthedefect.

UnderUCC,Section2607(3)(a)andSection2A516(3)(a),whichcoversleases,theclaimantwho

failstogivenoticeofbreachwithinareasonabletimeofhavingacceptedthegoodswillseethesuit

dismissed,andfewconsumersknowenoughtodoso,exceptwhenmakingacomplaintabouta

purchaseofspoiledmilkoraboutpaintthatwouldntdry.

Inadditiontothesegeneralproblems,theclaimantfacesadditionaldifficultiesstemmingdirectlyfrom

warrantytheory,whichwetakeuplaterinthischapter.

ExclusionorModificationofWarranties

TheUCCpermitssellerstoexcludeordisclaimwarrantiesinwholeorinpart.Thatsreasonable,given

thatthediscussionhereisaboutcontract,andpartiesarefreetomakesuchcontractsastheyseefit.But

anumberofdifficultiescanarise.

ExclusionofExpressWarranties

Thesimplestwayforthesellertoexcludeexpresswarrantiesisnottogivethem.Tobesure,Section2

316(1)oftheUCCforbidscourtsfromgivingoperationtowordsinfineprintthatnegateorlimit

expresswarrantiesifdoingsowouldunreasonablyconflictwithexpresswarrantiesstatedinthemain

bodyofthecontractas,forexample,wouldablanketstatementthatthiscontractexcludesall

warrantiesexpressorimplied.ThepurposeoftheUCCprovisionistopreventcustomersfrombeing

surprisedbyunbargainedforlanguage.

ExclusionofImpliedWarrantiesinGeneral

Impliedwarrantiescanbeexcludedeasilyenoughalso,bydescribingtheproductwithlanguagesuchas

asisorwithallfaults.Norisexclusionsimplyafunctionofwhatthesellersays.Thebuyerwhohas

eitherexaminedorrefusedtoexaminethegoodsbeforeenteringintothecontractmaynotassertan

impliedwarrantyconcerningdefectsaninspectionwouldhaverevealed.

TheConventionprovidesasimilarruleregardingabuyersrightswhenhehasfailedto

inspectthegoods(Article35):Thesellerisnotliableforanylackofconformityof

thegoodsifatthetimeoftheconclusionofthecontractthebuyerkneworcouldnot

havebeenunawareofsuchlackofconformity.

ImpliedWarrantyofMerchantability

Section2316(2)oftheUCCpermitsthesellertodisclaimormodifytheimpliedwarrantyof

merchantability,aslongasthestatementactuallymentionsmerchantabilityand,ifitiswritten,is

conspicuous.Notethatthedisclaimerneednotbeinwriting,andagainallimpliedwarrantiescan

beexcludedasnoted.

ImpliedWarrantyofFitness

Section2316(2)oftheUCCpermitstheselleralsotodisclaimormodifyanimpliedwarrantyof

fitness.Thisdisclaimerormodificationmustbeinwriting,however,andmustbeconspicuous.Itneed

notmentionfitnessexplicitlygenerallanguagewilldo.Thefollowingsentence,forexample,is

sufficienttoexcludeallimpliedwarrantiesoffitness:Therearenowarrantiesthatextendbeyondthe

descriptiononthefaceofthiscontract.

HereisastandarddisclaimerclausefoundinaDowChemicalCompanyagreement:Sellerwarrants

thatthegoodssuppliedhereshallconformtothedescriptionstatedonthefrontsidehereof,thatitwill

conveygoodtitle,andthatsuchgoodsshallbedeliveredfreefromanylawfulsecurityinterest,lien,or

encumbrance.SELLERMAKESNOWARRANTYOFMERCHANTABILITYORFITNESSFORA

PARTICULARUSE.NORISTHEREANYOTHEREXPRESSORIMPLIEDWARRANTY.

ConflictbetweenExpressandImpliedWarranties

Expressandimpliedwarrantiesandtheirexclusionorlimitationcanoftenconflict.Section2317ofthe

UCCprovidescertainrulesfordecidingwhichshouldprevail.Ingeneral,allwarrantiesaretobe

construedasconsistentwitheachotherandascumulative.Whenthatassumptionisunreasonable,the

partiesintentiongovernstheinterpretation,accordingtothefollowingrules:(a)exactortechnical

specificationsdisplaceaninconsistentsampleormodelorgenerallanguageofdescription(b)asample

fromanexistingbulkdisplacesinconsistentgenerallanguageofdescription(c)expresswarranties

displaceinconsistentimpliedwarrantiesotherthananimpliedwarrantyoffitnessforaparticular

purpose.Anyinconsistencyamongwarrantiesmustalwaysberesolvedinfavoroftheimpliedwarranty

offitnessforaparticularpurpose.Thisdoesntmeanthatwarrantycannotbelimitedorexcluded

altogether.Thepartiesmaydoso.Butincasesofdoubtwhetheritorsomeotherlanguageapplies,the

impliedwarrantyoffitnesswillhaveasuperiorclaim.

TheMagnusonMossActandPhantomWarranties

Afteryearsofdebateoverextendingfederallawtoregulatewarranties,Congressenactedthe

MagnusonMossFederalTradeCommissionWarrantyImprovementAct(morecommonlyreferredto

astheMagnusonMossAct)andPresidentFordsigneditin1975.Theactwasdesignedtoclearup

confusingandmisleadingwarranties,whereasSenatorMagnusonputitinintroducingthebill

purchasersofconsumerproductsdiscoverthattheirwarrantymaycovera25centpartbutnotthe

$100laborchargeorthatthereisfullcoverageonapianosolongasitisshippedatthepurchasers

expensetothefactory.Thereisagrowingneedtogenerateconsumerunderstandingbyclearlyand

conspicuouslydisclosingthetermsandconditionsofthewarrantyandbytellingtheconsumerwhatto

doifhisguaranteedproductbecomesdefectiveormalfunctions.TheMagnusonMossActonlyapplies

toconsumerproducts(forhouseholdanddomesticuses)commercialpurchasersarepresumedtobe

knowledgeableenoughnottoneedtheseprotections,tobeabletohirelawyers,andtobeableto

includethecostofproductfailuresintothepricestheycharge.

Theacthasseveralprovisionstomeettheseconsumerconcernsitregulatesthecontentofwarranties

andthemeansofdisclosingthosecontents.TheactgivestheFederalTradeCommission(FTC)the

authoritytopromulgatedetailedregulationstointerpretandenforceit.UnderFTCregulations,any

writtenwarrantyforaproductcostingaconsumermorethantendollarsmustdiscloseinasingle

documentandinreadilyunderstandablelanguagethefollowingnineitemsofinformation:

1. Theidentityofthepersonscoveredbythewarranty,whetheritislimitedtotheoriginalpurchaser

orfewerthanallwhomightcometoownitduringthewarrantyperiod.

2. Acleardescriptionoftheproducts,parts,characteristics,components,orpropertiescovered,and

wherenecessaryforclarity,adescriptionofwhatisexcluded.

3. Astatementofwhatthewarrantorwilldoiftheproductfailstoconformtothewarranty,including

itemsorservicesthewarrantywillpayforand,ifnecessaryforclarity,whatitwillnotpayfor.

4. Astatementofwhenthewarrantyperiodstartsandwhenitexpires.

5. Astepbystepexplanationofwhattheconsumermustdotorealizeonthewarranty,includingthe

namesandaddressesofthosetowhomtheproductmustbebrought.

6. Instructionsonhowtheconsumercanbeavailedofanyinformaldisputeresolutionmechanism

establishedbythewarranty.

7. Anylimitationsonthedurationofimpliedwarrantiessincesomestatesdonotpermitsuch

limitations,thewarrantymustcontainastatementthatanylimitationsmaynotapplytothe

particularconsumer.

8. Anylimitationsorexclusionsonrelief,suchasconsequentialdamagesasabove,thewarranty

mustexplainthatsomestatesdonotallowsuchlimitations.

9. Thefollowingstatement:Thiswarrantygivesyouspecificlegalrights,andyoumayalsohaveother

rightswhichvaryfromstatetostate.

Inadditiontotheserequirements,theactrequiresthatthewarrantybelabeledeitherafullorlimited

warranty.Afullwarrantymeans(1)thedefectiveproductorpartwillbefixedorreplacedforfree,

includingremovalandreinstallation(2)itwillbefixedwithinareasonabletime(3)theconsumerneed

notdoanythingunreasonable(likeshippingthepianotothefactory)togetwarrantyservice(4)the

warrantyisgoodforanyonewhoownstheproductduringtheperiodofthewarranty(5)theconsumer

getsmoneybackoranewproductiftheitemcannotbefixedwithinareasonablenumberofattempts.

Butthefullwarrantymaynotcoverthewholeproduct:itmaycoveronlytheharddriveinthe

computer,forexampleitmuststatewhatpartsareincludedandexcluded.Alimitedwarrantyisless

inclusive.Itmaycoveronlyparts,notlaboritmayrequiretheconsumertobringtheproducttothe

storeforserviceitmayimposeahandlingchargeitmaycoveronlythefirstpurchaser.Bothfulland

limitedwarrantiesmayexcludeconsequentialdamages.

DisclosureofthewarrantyprovisionspriortosaleisrequiredbyFTCregulationsthiscanbedoneina

numberofways.Thetextofthewarrantycanbeattachedtotheproductorplacedincloseconjunction

toit.Itcanbemaintainedinabinderkeptineachdepartmentorotherwiseeasilyaccessibletothe

consumer.Eitherthebindersmustbeinplainsightorsignsmustbepostedtocalltheprospective

buyersattentiontothem.Anoticecontainingthetextofthewarrantycanbeposted,orthewarranty

itselfcanbeprintedontheproductspackageorcontainer.

PhantomwarrantiesareaddressedbytheMagnusonMossAct.Aswehaveseen,theUCCpermitsthe

sellertodisclaimimpliedwarranties.Thisauthorityoftenledsellerstogivewhatwerecalledphantom

warrantiesthatis,theexpresswarrantycontaineddisclaimersofimpliedwarranties,thusleavingthe

consumerwithfewerrightsthanifnoexpresswarrantyhadbeengivenatall.Inthewordsofthe

legislativereportoftheact,Theboldprintgiveth,andthefineprinttakethaway.Theactabolished

thesephantomwarrantiesbyprovidingthatifthesellergivesawrittenwarranty,whetherexpressor

implied,hecannotdisclaimormodifyimpliedwarranties.However,asellerwhogivesalimited

warrantycanlimitimpliedwarrantiestothedurationofthelimitedwarranty,ifthedurationis

reasonable.

Asellersabilitytodisclaimimpliedwarrantiesisalsolimitedbystatelawintwoways.First,by

amendmenttotheUCCorbyseparatelegislation,somestatesprohibitdisclaimerswhenever

consumerproductsaresold.AnumberofstateshavespeciallawsthatlimittheuseoftheUCCimplied

warrantydisclaimerrulesinconsumersales.SomeoftheseappearinamendmentstotheUCCand

othersareinseparatestatutes.Thebroadestapproachisthatoftheninestatesthatprohibitthe

disclaimerofimpliedwarrantiesinconsumersales(Massachusetts,Connecticut,Maine,Vermont,

Maryland,theDistrictofColumbia,WestVirginia,Kansas,Mississippi,and,withrespecttopersonal

injuriesonly,Alabama).Thereisadifferenceinthesestateswhethertherulesapplytomanufacturers

aswellasretailers.Second,theUCCat2302providesthatunconscionablecontractsorclauseswillnot

beenforced.UCC2719(3)providesthatlimitationofdamagesforpersonalinjuryinthesaleof

consumergoodsisprimafacieunconscionable,butlimitationofdamageswherethelossiscommercial

isnot.

Afirstproblemwithwarrantytheory,then,isthatitspossibletodisclaimorlimitthewarranty.The

worstabusesofmanipulativeandtrickywarrantiesareeliminatedbytheMagnusonMossAct,but

thereareseveralotherreasonsthatwarrantytheoryisnotthepanaceaforclaimantswhohavesuffered

damagesorinjuriesasaresultofdefectiveproducts.

Privity

Asecondproblemwithwarrantylaw(afterexclusionandmodificationofwarranties)isthatofprivity.

Privityisthelegaltermforthedirectconnectionbetweenthesellerandbuyer,thetwocontracting

parties.Fordecades,thedoctrineofprivityhasheldthatonepersoncansueanotheronlyiftheyarein

privity.Thatworkedwellinthedayswhenmostcommercewaslocalandtheconnectionbetweenseller

andbuyerwasimmediate.Butinamodernindustrial(orpostindustrial)economy,theproductis

transportedthroughamuchlargerdistributionsystem,asdepictedinFigure9.2"Chainof

Distribution".Twoquestionsarise:(1)Isthemanufacturerorwholesaler(asopposedtotheretailer)

liabletothebuyerunderwarrantytheory?and(2)Maythebuyersfamilyorfriendsassertwarranty

rights?

Figure9.2 ChainofDistribution

HorizontalPrivity

SupposeCarlConsumerbuysanewlampforhisfamilyslivingroom.Thelampisdefective:Carlgetsa

seriouselectricalshockwhenheturnsiton.CertainlyCarlwouldbecoveredbytheimpliedwarrantyof

merchantability:hesindirectprivitywiththeseller.ButwhatifCarlsspouseCarleneisinjured?She

didntbuythelampisshecovered?OrsupposeCarlsfriendDavid,visitingforanafternoon,gets

zapped.IsDavidcovered?Thisgetstohorizontalprivity,noncontractingpartieswhosuffer

damagesfromdefectivegoods,suchasnonbuyerusers,consumers,andbystanders.Horizontalprivity

determinestowhosebenefitthewarrantyflowswhocansueforitsbreach.Inoneofitsrare

instancesofnonuniformity,theUCCdoesnotdictatetheresult.Itgivesthestatesthreechoices,labeled

inSection2318asAlternativesA,B,andC.

AlternativeAsaysthatasellerswarrantyextendstoanynaturalpersonwhoisinthefamilyor

householdofhisbuyerorwhoisaguestinhishomeprovided(1)itisreasonabletoexpecttheperson

sufferingdamagestouse,consume,orbeaffectedbythegoodsand(2)thewarrantyextendsonlyto

damagesforpersonalinjury.

AlternativeBextendstoanynaturalpersonwhomayreasonablybeexpectedtouse,consume,orbe

affectedbythegoods,andwhoisinjuredinpersonbybreachofthewarranty.Itislessrestrictivethan

thefirstalternative:itextendsprotectiontopeoplebeyondthoseinthebuyershome.Forexample,

whatifCarltookthelamptoaneighborshousetoilluminateapokertable:underAlternativeB,

anybodyattheneighborshousewhosufferedinjurywouldbecoveredbythewarranty.Butthis

alternativedoesnotextendprotectiontoorganizationsnaturalpersonmeansahumanbeing.

AlternativeCisthesameasBexceptthatitappliesnotonlytoanynaturalpersonbuttoanyperson

whoisinjuredbybreachofthewarranty.Thisisthemostfarreachingalternativebecauseitprovides

redressfordamagetopropertyaswellasforpersonalinjury,anditextendsprotectiontocorporations

andotherinstitutionalbuyers.

Onemayincidentallynotethathavingthreedifferentalternativesforwhenthirdpartynonpurchasers

cansueasellerormanufacturerforbreachofwarrantygivesrisetounintendedconsequences.First,

differentoutcomesareproducedamongjurisdictions,includingvariationsinthecommonlaw.Second,

thegreatpurposeoftheUniformCommercialCodeinpromotingnationaluniformityisundermined.

Third,battlesoverchoiceoflawwheretofilethelawsuitaregenerated.

UCC,Section2A216,providesbasicallythesamealternativesasapplicabletotheleasingofgoods.

VerticalPrivity

Thetraditionalrulewasthatremotesellingpartieswerenotliable:lackofprivitywasadefensebythe

manufacturerorwholesalertoasuitbyabuyerwithwhomtheseentitiesdidnotthemselvescontract.

Thebuyercouldrecoverdamagesfromtheretailerbutnotfromtheoriginalmanufacturer,whoafter

allmadetheproductandwhomightbemuchmorefinanciallyabletohonorthewarranty.TheUCC

takesnopositionhere,butoverthelastfiftyyearsthejudicialtrendhasbeentoabolishthisvertical

privityrequirement.(SeeFigure9.2"ChainofDistribution"theentitiesinthedistributionchainare

thoseinverticalprivitytothebuyer.)Itbeganin1958,whentheMichiganSupremeCourtoverturned

theoldtheoryinanopinionwrittenbyJusticeJohnD.Voelker(whoalsowrotethenovelAnatomyofa

Murder,underthepennameRobertTraver).Spencev.ThreeRiversBuilders&MasonrySupply,Inc.,

90N.W.2d873(Mich.1958).

ContributoryNegligence,ComparativeNegligence,andAssumptionofRisk

Afterdisclaimersandprivityissuesareresolved,otherpossibleimpedimentsfacingtheplaintiffina

productsliabilitywarrantycaseareissuesofassumptionoftherisk,contributorynegligence,and

comparativenegligence(discussedinChapter7"IntroductiontoTortLaw"ontorts).

Courtsuniformlyholdthatassumptionofriskisadefenseforsellersagainstaclaimofbreachof

warranty,whilethereisasplitofauthorityoverwhethercomparativeandcontributorynegligenceare

defenses.However,thecourtsuseofthisterminologyisoftenconflictingandconfusing.Theultimate

questionisreallyoneofcausation:wasthesellersbreachofthewarrantythecauseoftheplaintiffs

damages?

TheUCCisnotmarkedlyhelpfulinclearingawaytheconfusioncausedbyyearsofdiscussionof

assumptionofriskandcontributorynegligence.Section2715(2)(b)oftheUCCsaysthatamongthe

formsofconsequentialdamageforwhichrecoverycanbesoughtisinjurytopersonorproperty

proximatelyresultingfromanybreachofwarranty(emphasisadded).Butproximatelyisa

troublesomeword.Indeed,ultimatelyitisacircularword:itmeansnothingmorethanthatthe

defendantmusthavebeenadirectenoughcauseofthedamagesthatthecourtswillimposeliability.

Comment5tothissectionsays,Wheretheinjuryinvolvedfollowstheuseofgoodswithoutdiscovery

ofthedefectcausingthedamage,thequestionofproximateturnsonwhetheritwasreasonableforthe

buyertousethegoodswithoutsuchinspectionaswouldhaverevealedthedefects.Ifitwasnot

reasonableforhimtodoso,orifhedidinfactdiscoverthedefectpriortohisuse,theinjurywouldnot

proximatelyresultfromthebreachofwarranty.

Obviouslyifaskydiverbuysaparachuteandthendiscoversafewholesinit,hisfamilywouldnotlikely

prevailincourtwhentheysuedtorecoverforhisdeathbecausetheparachutefailedtofunctionafterhe

jumpedat5,000feet.Butthegeneralnotionthatitmusthavebeenreasonableforabuyertousegoods

withoutinspectioncanmakeawarrantycasedifficulttoprove.

KEY TAKEAWAY

Afirstbasisofrecoveryinproductsliabilitytheoryisbreachofwarranty.Therearetwotypesof

warranties:expressandimplied.Undertheimpliedcategoryarethreemajorsubtypes:theimplied

warrantyofmerchantability(onlygivenbymerchants),theimpliedwarrantyoffitnessforaparticular

purpose,andtheimpliedwarrantyoftitle.Thereareanumberofproblemswiththeuseofwarranty

theory:theremusthavebeenasaleofthegoods;theplaintiffmustbringtheactionwithinthestatute

oflimitations;andtheplaintiffmustnotifythesellerwithinareasonabletime.Thesellermaywithin

theconstraintsoftheMagnusonMossActlimitorexcludeexpresswarrantiesorlimitorexclude

impliedwarranties.Privity,orlackofit,betweenbuyerandsellerhasbeensignificantlyerodedasa

limitationinwarrantytheory,butlackofprivitymaystillaffecttheplaintiffsrecovery;theplaintiffs

assumptionoftheriskinusingdefectivegoodsmayprecluderecovery.

EXERC ISES

1. Whatarethetwomaintypesofwarrantiesandtheimportantsubtypes?

2. Whocanmakeeachtypeofwarranty?

3. Whatgeneralproblemsdoesaplaintiffhaveinbringingaproductsliabilitywarrantycase?

4. Whatproblemsarepresentedconcerningexclusionormanipulativeexpresswarranties,andhow

doestheMagnusonMossActaddressthem?

5. Howareimpliedwarrantiesexcluded?

6. Whatistheproblemoflackofprivity,andhowdoesmodernlawdealwithit?

9.3Negligence

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1. Recognizehowthetorttheoryofnegligencemaybeofuseinproductsliabilitysuits.

2. Understandwhynegligenceisoftennotasatisfactorycauseofactioninsuchsuits:proofofitmay

bedifficult,andtherearepowerfuldefensestoclaimsofnegligence.

Negligenceisthesecondtheoryraisedinthetypicalproductsliabilitycase.Itisatorttheory(as

comparedtobreachofwarranty,whichisofcourseacontracttheory),anditdoeshavethisadvantage

overwarrantytheory:privityisneverrelevant.Apedestrianisstruckinanintersectionbyacarwhose

brakesweredefectivelymanufactured.Undernocircumstanceswouldbreachofwarrantybeauseful

causeofactionforthepedestrianthereisnoprivityatall.Negligenceisconsideredindetailinthe

Chapter7"IntroductiontoTortLaw"ontortsitbasicallymeanslackofduecare.

TypicalNegligenceClaims:DesignDefectsandInadequateWarnings

Negligencetheoryinproductsliabilityismostusefulintwotypesofcases:defectivedesignand

defectivewarnings.

DesignDefects

Manufacturerscanbe,andoftenare,heldliableforinjuriescausedbyproductsthatweredefectively

designed.Thequestioniswhetherthedesignerusedreasonablecareindesigningaproductreasonably

safeforitsforeseeableuse.Theconcernoverreasonablenessandstandardsofcareareelementsof

negligencetheory.

Defectivedesigncasescanposesevereproblemsformanufacturingandsafetyengineers.Moresafety

meansmorecost.Designsalteredtoimprovesafetymayimpairfunctionalityandmaketheproduct

lessdesirabletoconsumers.Atwhatpointsafetycomesintoreasonablebalancewithperformance,

cost,anddesirability(seeFigure9.3"TheReasonableDesignBalance")isimpossibletoforecast

accurately,thoughsomefactorscanbetakenintoaccount.Forexample,ifothermanufacturersare

marketingcomparableproductswhosedesignareintrinsicallysafer,thelesssafeproductsarelikelyto

loseatestofreasonablenessincourt.

Figure9.3 TheReasonableDesignBalance

WarningDefects

Wenotedthataproductmaybedefectiveifthemanufacturerfailedtowarntheuserofpotential

dangers.Whetherawarningshouldhavebeenaffixedisoftenaquestionofwhatisreasonably

foreseeable,andthefailuretoaffixawarningwillbetreatedasnegligence.Themanufacturerofaweed

killerwithpoisonousingredientsiscertainlyactingnegligentlywhenitfailstowarntheconsumerthat

thecontentsarepotentiallylethal.

Thelawgoverningthenecessitytowarnandtheadequacyofwarningsiscomplex.Whatisreasonable

turnsonthedegreetowhichaproductislikelytobemisusedand,asthedisturbingLaapericase

(Section9.6.3"FailuretoWarn")illustrates,whetherthehazardisobvious.

ProblemswithNegligenceTheory

Negligenceisanancientcauseofactionand,aswasdiscussedinthetortschapter,itcarrieswithita

numberofwelldevelopeddefenses.Twocategoriesmaybementioned:commonlawdefensesand

preemption.

CommonLawDefensesagainstNegligence

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Amongtheproblemsconfrontingaplaintiffwithaclaimofnegligenceinproductsliabilitysuits(again,

theseconceptsarediscussedinthetortschapter)arethefollowing:

Provingnegligenceatall:justbecauseaproductisdefectivedoesnotnecessarilyprovethe

manufacturerbreachedadutyofcare.

Proximatecause:eveniftherewassomenegligence,theplaintiffmustproveherdamagesflowed

proximatelyfromthatnegligence.

Contributoryandcomparativenegligence:theplaintiffsownactionscontributedtothedamages.

Subsequentalterationoftheproduct:generallythemanufacturerwillnotbeliableiftheproduct

hasbeenchanged.

Misuseorabuseoftheproduct:usingalawnmowertotrimahedgeortakingtoomuchofadrug

areexamples.

Assumptionoftherisk:knowinglyusingtheproductinariskyway.

Preemption

Preemption(orpreemption)isillustratedbythisproblem:supposethereisafederalstandard

concerningtheproduct,andthedefendantmanufacturermeetsit,butthestandardisnotreallyvery

protective.(Itisnotuncommon,ofcourse,forfederalstandardmakersofalltypestobesignificantly

influencedbylobbyistsfortheindustriesbeingregulatedbythestandards.)Isitenoughforthe

manufacturertopointtoitssatisfactionofthestandardsothatsuchsatisfactionpreempts(takesover)

anycommonlawnegligenceclaim?Webuiltthemachinetofederalstandards:wecantbeliable.Our

compliancewiththefederalsafetystandardisanaffirmativedefense.

Preemptionistypicallyraisedasadefenseinsuitsabout(1)cigarettes,(2)FDAapprovedmedical

devices,(3)motorboatpropellers,(4)pesticides,and(5)motorvehicles.Thisisacomplexareaoflaw.

Questionsinevitablyariseastowhethertherewasfederalpreemption,expressorimplied.Sometimes

courtsfindpreemptionandtheconsumerlosessometimesthecourtsdontfindpreemptionandthe

casegoesforward.Accordingtoonelawyerwhoworksinthisfield,therehasbeenincreasingpressure

onboththeregulatoryandcongressionalfrontstopreemptstatelaws.Thatis,theusualdefendants

(manufacturers)pushCongressandtheregulatoryagenciestostateexplicitlyinthelawthatthefederal

standardspreemptanddefeatstatelaw.C.RichardNewsomeandAndrewF.Knopf,Federal

Preemption:ProductsLawyersBeware,FloridaJusticeAssociationJournal,July27,2007,accessed

March1,2011,http://www.newsomelaw.com/resources/articles/federalpreemptionproducts

lawyersbeware.

KEY TAKEAWAY

Negligenceisasecondpossiblecauseofactionforproductsliabilityclaimants.Amainadvantageis

thatnoissuesofprivityarerelevant,butthereareoftenproblemsofproof;thereareanumberof

robustcommonlawdefenses,andfederalpreemptionisarecurringconcernforplaintiffslawyers.

EXERC ISES

1. Whattwotypesofproductsliabilitycasesaremostoftenbroughtundernegligence?

2. Howcoulditbesaidthatmerelybecauseapersonsuffersinjuryastheresultofadefective

product,proofofnegligenceisnotnecessarilymade?

3. Whatispreemptionandhowisitusedasaswordtodefeatproductsliabilityplaintiffs?

9.4StrictLiabilityinTort


1. Knowwhatstrictproductsliabilitymeansandhowitdiffersfromtheothertwoproducts

liabilitytheories.

2. Understandthebasicrequirementstoprovestrictproductsliability.

3. Seewhatobstaclestorecoveryremainwiththisdoctrine.

http://www.newsomelaw.com/resources/articles/federal-preemption-products-lawyers-beware

ThewarrantiesgroundedintheUniformCommercialCode(UCC)areoftenineffectiveinassuring

recoveryforaplaintiffsinjuries.Thenoticerequirementsandtheabilityofasellertodisclaimthe

warrantiesremainbothersomeproblems,asdoestheprivityrequirementinthosestatesthatcontinue

toadheretoit.

Negligenceasaproductsliabilitytheoryobviatesanyprivityproblems,butnegligencecomeswitha

numberoffamiliardefensesandwiththeproblemsofpreemption.

Toovercometheobstacles,judgeshavegonebeyondthecommercialstatutesandtheancientconcepts

ofnegligence.Theyhavefashionedatorttheoryofproductsliabilitybasedontheprincipleofstrict

productsliability.Onecourtexpressedtherationaleforthedevelopmentoftheconceptasfollows:

Theruleofstrictliabilityfordefectiveproductsisanexampleofnecessarypaternalismjudicially

shiftingriskoflossbyapplicationoftortdoctrinebecause[theUCC]schemefailstoadequatelycover

thesituation.Judicialpaternalismistolossshiftingwhatgarlicistoastewsometimesnecessaryto

givefullflavortostatutorylaw,alwaysdistinctlynoticeableinitsresult,overwhelmingly

counterproductiveifexcessive,andneveranendinitself.KaiserSteelCorp.v.WestinghouseElectric

Corp.,127Cal.Rptr.838(Cal.1976).Paternalismornot,strictliabilityhasbecomeaveryimportant

legaltheoryinproductsliabilitycases.

StrictLiabilityDefined

TheformulationofstrictliabilitythatmostcourtsuseisSection402AoftheRestatementofTorts

(Second),setouthereinfull:

(1)Onewhosellsanyproductinadefectiveconditionunreasonablydangeroustotheuserorconsumer

ortohispropertyissubjecttoliabilityforphysicalharmtherebycausedtotheultimateuseror

consumer,ortohisproperty,if

(a)thesellerisengagedinthebusinessofsellingsuchaproduct,and

(b)itisexpectedtoanddoesreachtheuserorconsumerwithoutsubstantialchangeintheconditionin

whichitissold.

(2)Thisruleapplieseventhough

(a)thesellerhasexercisedallpossiblecareinthepreparationandsaleofhisproduct,and

(b)theuserorconsumerhasnotboughttheproductfromorenteredintoanycontractualrelationwith

theseller.

Section402AoftheRestatementavoidsthewarrantyboobytraps.Itstatesaruleoflawnotgoverned

bytheUCC,solimitationsandexclusionsinwarrantieswillnotapplytoasuitbasedonthe

Restatementtheory.Andtheconsumerisundernoobligationtogivenoticetothesellerwithina

reasonabletimeofanyinjuries.PrivityisnotarequirementthelanguageoftheRestatementsaysit

appliestotheuserorconsumer,butcourtshavereadilyfoundthatbystandersinvarioussituations

areentitledtobringactionsunderRestatement,Section402A.Theformulationofstrictliability,

though,islimitedtophysicalharm.Manycourtshaveheldthatapersonwhosufferseconomicloss

mustresorttowarrantylaw.

Strictliabilityavoidssomenegligencetraps,too.Noproofofnegligenceisrequired.SeeFigure9.4

"MajorDifferencebetweenWarrantyandStrictLiability".

Figure9.4 MajorDifferencebetweenWarrantyandStrictLiability

Section402AElements

ProductinaDefectiveCondition

SalesofgoodsbutnotsalesofservicesarecoveredundertheRestatement,Section402A.

Furthermore,theplaintiffwillnotprevailiftheproductwassafefornormalhandlingandconsumption

whensold.Aglasssodabottlethatisproperlycappedisnotinadefectiveconditionmerelybecauseit

canbebrokeniftheconsumershouldhappentodropit,makingthejaggedglassdangerous.Chocolate

candybarsarenotdefectivemerelybecauseyoucanbecomeillbyeatingtoomanyofthematonce.On

theotherhand,asellerwouldbeliableforaproductdefectivelypackaged,sothatitcouldexplodeor

deteriorateandchangeitschemicalcomposition.Aproductcanalsobeinadefectiveconditionifthere

isdangerthatcouldcomefromananticipatedwrongfuluse,suchasadrugthatissafeonlywhentaken

inlimiteddoses.Underthosecircumstances,failuretoplaceanadequatedosagewarningonthe

containermakestheproductdefective.

Theplaintiffbearstheburdenofprovingthattheproductisinadefectivecondition,andthisburden

canbedifficulttomeet.Manyproductsaretheresultofcomplexfeatsofengineering.Expertwitnesses

arenecessarytoprovethattheproductsweredefectivelymanufactured,andthesearenotalwayseasy

tocomeby.Thisdifficultyofproofisonereasonwhymanycasesraisethefailuretowarnasthe

dispositiveissue,sinceintherightcasethatissueisfareasiertoprove.TheAndersoncase(detailedin

theexercisesattheendofthischapter)demonstratesthattheplaintiffcannotprevailunderstrict

liabilitymerelybecausehewasinjured.Itisnotthefactofinjurythatisdispositivebutthedefective

conditionoftheproduct.

UnreasonablyDangerous

Theproductmustbenotmerelydangerousbutunreasonablydangerous.Mostproductshave

characteristicsthatmakethemdangerousincertaincircumstances.AstheRestatementcommentators

note,Goodwhiskeyisnotunreasonablydangerousmerelybecauseitwillmakesomepeopledrunk,

andisespeciallydangeroustoalcoholicsbutbadwhiskey,containingadangerousamountoffueloil,is

unreasonablydangerous.Goodbutterisnotunreasonablydangerousmerelybecause,ifsuchbethe

case,itdepositscholesterolinthearteriesandleadstoheartattacksbutbadbutter,contaminatedwith

poisonousfishoil,isunreasonablydangerous.Restatement(Second)ofContracts,Section402A(i).

UnderSection402A,thearticlesoldmustbedangeroustoanextentbeyondthatwhichwouldbe

contemplatedbytheordinaryconsumerwhopurchasesit,withtheordinaryknowledgecommontothe

communityastoitscharacteristics.

Evenhighrisksofdangerarenotnecessarilyunreasonable.Someproductsareunavoidablyunsafe

rabiesvaccines,forexample,cancausedreadfulsideeffects.Butthediseaseitself,almostalwaysfatal,

isworse.Aproductisunavoidablyunsafewhenitcannotbemadesafeforitsintendedpurposegiven

thepresentstateofhumanknowledge.Becauseimportantbenefitsmayflowfromtheproductsuse,its

producerorselleroughtnottobeheldliableforitsdanger.

However,thefailuretowarnapotentialuserofpossiblehazardscanmakeaproductdefectiveunder

Restatement,Section402A,whetherunreasonablydangerousorevenunavoidablyunsafe.Thedairy

farmerneednotwarnthosewithcommonallergiestoeggs,becauseitwillbepresumedthattheperson

withanallergicreactiontocommonfoodstuffswillbeawareofthem.Butwhentheproductcontainsan

ingredientthatcouldcausetoxiceffectsinasubstantialnumberofpeopleanditsdangerisnotwidely

known(orifknown,isnotaningredientthatwouldcommonlybesupposedtobeintheproduct),the

lackofawarningcouldmaketheproductunreasonablydangerouswithinthemeaningofRestatement,

Section402A.ManyofthesuitsbroughtbyasbestosworkerschargedexactlythispointTheutilityof

aninsulationproductcontainingasbestosmayoutweightheknownorforeseeablerisktotheinsulation

workersandthusjustifyitsmarketing.Theproductcouldstillbeunreasonablydangerous,however,if

unaccompaniedbyadequatewarnings.Aninsulationworker,nolessthananyotherproductuser,hasa

righttodecidewhethertoexposehimselftotherisk.Borelv.FibreboardPaperProductsCorp.,493

F.Zd1076(5thCir.1973).ThisruleoflawcametohaunttheManvilleCorporation:itwassoburdened

withlawsuits,broughtandlikelytobebroughtforitssaleofasbestosaknowncarcinogenthatit

declaredChapter11bankruptcyin1982andshuckeditsliability.InreJohnsManvilleCorp.,36R.R.

727(So.Dist.N.Y.1984).

EngagedintheBusinessofSelling

Restatement,Section402A(1)(a),limitsliabilitytosellersengagedinthebusinessofsellingsucha

product.Theruleisintendedtoapplytopeopleandentitiesengagedinbusiness,nottocasualone

timesellers.Thebusinessneednotbesolelyinthedefectiveproductamovietheaterthatsellspopcorn

witharazorbladeinsideisnolessliablethanagrocerystorethatdoesso.Butstrictliabilityunderthis

ruledoesnotattachtoaprivateindividualwhosellshisownautomobile.Inthissense,Restatement,

Section402A,isanalogoustotheUCCslimitationofthewarrantyofmerchantabilitytothemerchant.

Therequirementthatthedefendantbeinthebusinessofsellinggetstotherationaleforthewhole

conceptofstrictproductsliability:businessesshouldshoulderthecostofinjuriesbecausetheyarein

thebestpositiontospreadtheriskanddistributetheexpenseamongthepublic.Thissamepolicyhas

beentherationaleforholdingbailorsandlessorsliablefordefectiveequipmentjustasiftheyhadbeen

sellers.Martinv.RyderRental,Inc.,353A.2d581(Del.1976).

ReachestheUserwithoutChangeinCondition

Restatement,Section402A(1)(b),limitsstrictliabilitytothosedefectiveproductsthatareexpectedto

anddoreachtheuserorconsumerwithoutsubstantialchangeintheconditioninwhichtheproductsare

sold.Aproductthatissafewhendeliveredcannotsubjectthesellertoliabilityifitissubsequently

mishandledorchanged.Theseller,however,mustanticipateinappropriatecasesthattheproductwill

bestoredfaultypackagingorsterilizationmaybethegroundsforliabilityiftheproductdeteriorates

beforebeingused.

LiabilityDespiteExerciseofAllDueCare

StrictliabilityappliesundertheRestatementruleeventhoughthesellerhasexercisedallpossiblecare

inthepreparationandsaleofhisproduct.Thisisthecruxofstrictliabilityanddistinguishesitfrom

theconventionaltheoryofnegligence.Itdoesnotmatterhowreasonablytheselleractedorhow

exemplaryisamanufacturersqualitycontrolsystemwhatmattersiswhethertheproductwas

defectiveandtheuserinjuredasaresult.Supposeanautomatedbottlefactorymanufactures1,000

bottlesperhourunderexactingstandards,witharigorousandcostlyqualitycontrolprogramdesigned

toweedoutanybottlesshowingevenaninfinitesimalamountofstress.Theplantisstateoftheart,

anditscomputerizedqualitycontroloperationisthebestintheworld.Itregularlydetectstheoneout

ofevery10,000bottlesthatanalysishasshownwillbedefective.Despitethisintenseeffort,itproves

impossibletoweedouteverydefectivebottleoneoutofonemillion,say,willstillescapedetection.

Assumethatabottle,filledwithsoda,findsitswayintoaconsumershome,explodeswhenhandled,

sendsglassshardsintohiseye,andblindshim.Undernegligence,thebottlerhasnoliabilityunder

strictliability,thebottlerwillbeliabletotheconsumer.

LiabilitywithoutContractualRelation

UnderRestatement,Section402A(2)(b),strictliabilityapplieseventhoughtheuserhasnotpurchased

theproductfromthesellernorhastheuserenteredintoanycontractualrelationwiththeseller.In

short,privityisabolishedandtheinjuredusermayusethetheoryofstrictliabilityagainst

manufacturersandwholesalersaswellasretailers.Here,however,thecourtshavevariedintheir

approachesthetrendhasbeentoallowbystandersrecovery.TheRestatementexplicitlyleavesopen

thequestionofthebystandersrighttorecoverunderstrictliability.

ProblemswithStrictLiability

Strictliabilityisliabilitywithoutproofofnegligenceandwithoutprivity.Itwouldseemthatstrict

liabilityistheholygrailofproductsliabilitylawyers:thecompleteanswer.Well,no,itsnottheholy

grail.Itiscertainlytruethat402Aabolishesthecontractualproblemsofwarranty.Restatement,

Section402A,Commentm,says,

TherulestatedinthisSectionisnotgovernedbytheprovisionsoftheUniformCommercialCode,asto

warrantiesanditisnotaffectedbylimitationsonthescopeandcontentofwarranties,orbylimitation

tobuyerandsellerinthosestatutes.Noristheconsumerrequiredtogivenoticetothesellerofhis

injurywithinareasonabletimeafteritoccurs,asprovidedbytheUniformAct.Theconsumerscauseof

actiondoesnotdependuponthevalidityofhiscontractwiththepersonfromwhomheacquiresthe

product,anditisnotaffectedbyanydisclaimerorotheragreement,whetheritbebetweentheseller

andhisimmediatebuyer,orattachedtoandaccompanyingtheproductintotheconsumershands.In

short,warrantymustbegivenanewanddifferentmeaningifitisusedinconnectionwiththisSection.

Itismuchsimplertoregardtheliabilityherestatedasmerelyoneofstrictliabilityintort.

InherentintheRestatementslanguageistheobviouspointthatiftheproducthasbeenaltered,losses

causedbyinjuryarenotthemanufacturersliability.Beyondthattherearestillsomelimitationsto

strictliability.

Disclaimers

CommentmspecificallysaysthecauseofactionunderRestatement,Section402A,isnotaffectedby

disclaimer.Butinnonconsumercases,courtshaveallowedclearandspecificdisclaimers.In1969,the

NinthCircuitobserved:InKaiserSteelCorp.the[CaliforniaSupremeCourt]courtupheldthe

dismissalofastrictliabilityactionwhentheparties,dealingfrompositionsofrelativelyequaleconomic

strength,contractedinacommercialsettingtolimitthedefendantsliability.Thecourtwentontohold

thatinthissituationthestrictliabilitycauseofactiondoesnotapplyatall.Inreachingthisconclusion,

thecourtinKaiserreasonedthatstrictliabilityisdesignedtoencompasssituationsinwhichthe

principlesofsaleswarrantiesservetheirpurposefitfullyatbest.[Citation]Itconcludedthatinsuch

commercialsettingstheUCCprinciplesworkwellandtoapplythetortdoctrinesofproductsliability

willdisplacethestatutorylawratherthanbringoutitsfullflavor.IdahoPowerCo.v.Westinghouse

ElectricCorp.,596F.2d924,9CA(1979).

PlaintiffsConduct

Conductbytheplaintiffherselfmaydefeatrecoveryintwocircumstances.

AssumptionofRisk

Courtshaveallowedthedefenseofassumptionoftheriskinstrictproductsliabilitycases.Aplaintiff

assumestheriskofinjury,thusestablishingdefensetoclaimofstrictproductsliability,whenheis

awaretheproductisdefective,knowsthedefectmakestheproductunreasonablydangerous,has

reasonableopportunitytoelectwhethertoexposehimselftothedanger,andneverthelessproceedsto

makeuseoftheproduct.Therulemakessense.

MisuseorAbuseoftheProduct

Wheretheplaintiffdoesnotknowauseoftheproductisdangerousbutneverthelessusesforan

incorrectpurpose,adefensearises,butonlyifsuchmisusewasnotforeseeable.Ifitwas,the

manufacturershouldwarnagainstthatmisuse.InEastmanv.StanleyWorks,acarpenteruseda

framinghammertodrivemasonrynailstheclawofthehammerbrokeoff,strikinghiminthe

eye.Eastmanv.StanleyWorks,907N.E.2d768(OhioApp.2009).Hesued.Thecourtheldthatwhile

adefensedoesexistwheretheproductisusedinacapacitywhichisunforeseeablebythemanufacturer

andcompletelyincompatiblewiththeproductsdesignmisuseofaproductsuggestsausewhichwas

unanticipatedorunexpectedbytheproductmanufacturer,orunforeseeableandunanticipated[but]it

wasnotthecasethatreasonablemindscouldonlyconcludethatappelleemisusedthe[hammer].

Thoughtheplaintiffsuseofthehammermighthavebeenunreasonable,unreasonableuseisnota

defensetoastrictproductliabilityactionortoanegligenceaction.

LimitedRemedy

TheRestatementsaysrecoveryunderstrictliabilityislimitedtophysicalharmtherebycausedtothe

ultimateuserorconsumer,ortohisproperty,butnototherlossesandnoteconomiclosses.InAtlas

Airv.GeneralElectric,aNewYorkcourtheldthattheeconomiclossrule(norecoveryforeconomic

losses)barredstrictproductsliabilityandnegligenceclaimsbythepurchaserofausedairplaneagainst

theairplaneenginemanufacturerfordamagetotheplanecausedbyanemergencylandingnecessitated

byenginefailure,wherethepurchasermerelyallegedeconomiclosseswithrespecttotheplaneitself,

andnotdamagesforpersonalinjury(recoveryfordamagetotheenginewasallowed).AtlasAirv.

GeneralElectric,16A.D.3d444(N.Y.A.D.2005).

Butthereareexceptions.InDuffinv.IdahoCropImp.Assn,thecourtrecognizedthataparty

generallyowesnodutytoexerciseduecaretoavoidpurelyeconomicloss,butifthereisaspecial

relationshipbetweenthepartiessuchthatitwouldbeequitabletoimposesuchaduty,thedutywillbe

imposed.Duffinv.IdahoCropImp.Assn,895P.2d1195(Idaho1995).Inotherwords,thereisan

extremelylimitedgroupofcaseswherethelawofnegligenceextendsitsprotectionstoapartys

economicinterest.

TheThirdRestatement

Thelawdevelops.Whatseemedfittingin1964whentheRestatement(Second)announcedthestateof

thecommonlawrulesforstrictliabilityinSection402Aseemed,by1997,nottobetrackingcommon

lawentirelyclosely.TheAmericanLawInstitutecameoutwiththeRestatement(Third)inthatyear.

TheRestatementchangessomethings.Mostnotablyitabolishestheunreasonablydangeroustest

andsubstitutesariskutilitytest.Thatis,aproductisnotdefectiveunlessitsriskinessoutweighsits

utility.Moreimportant,theRestatement(Third),Section2,nowrequirestheplaintifftoprovidea

reasonablealternativedesigntotheproductinquestion.Inadvancingareasonablealternativedesign,

theplaintiffisnotrequiredtoofferaprototypeproduct.Theplaintiffmustonlyshowthatthe

proposedalternativedesignexistsandissuperiortotheproductinquestion.TheRestatement(Third)

alsomakesitmoredifficultforplaintiffstosuedrugcompaniessuccessfully.Onelegalscholar

commentedasfollowsontheRestatement(Third):

TheprovisionsoftheThirdRestatement,ifimplementedbythecourts,willestablishadegreeof

fairnessintheproductsliabilityarena.IfcourtsadopttheThirdRestatementseliminationofthe

consumerexpectationstest,thischangealonewillstripjuriesoftheabilitytorenderdecisionsbased

onpotentiallysubjective,capriciousandunscientificopinionsthataparticularproductdesignisunduly

dangerousbasedonitsperformanceinasingleincident.Moreimportant,plaintiffswillberequiredto

proposeareasonablealternativedesigntotheproductinquestion.Sucharequirementwillforce

plaintiffstoprovethatabetterproductdesignexistsotherthanintheunprovenanduntesteddomain

oftheirexpertsimaginations.QuinlivanWexlerLLP,The3rdRestatementofTortsShapingthe

FutureofProductsLiabilityLaw,June1,1999,accessedMarch1,2011,

http://library.findlaw.com/1999/Jun/1/127691.html.

Ofcoursesomepeopleputmorefaithinjuriesthanisevidenthere.ThenewRestatementhasbeen

adoptedbyafewjurisdictionsandsomecasestheadoptingjurisdictionsincorporatesomeofitsideas,

butcourtsappearreluctanttoabandonfamiliarprecedent.

KEY TAKEAWAY

Becausethedoctrinesofbreachofwarrantyandnegligencedidnotprovideadequaterelieftothose

sufferingdamagesorinjuriesinproductsliabilitycases,beginninginthe1960scourtsdevelopeda

newtorttheory:strictproductsliability,restatedintheSecondRestatement,section402A.Basically

thedoctrinesaysthatifgoodssoldareunreasonablydangerousordefective,themerchantsellerwill

beliablefortheimmediatepropertylossandpersonalinjuriescausedthereby.Butthereremain

obstaclestorecoveryevenunderthisexpandedconceptofliability:disclaimersofliabilityhavenot

completelybeendismissed,theplaintiffsconductorchangestothegoodsmaylimitrecovery,and

withsomeexceptionstheremediesavailablearelimitedtopersonalinjury(anddamagetothe

goodsthemselves);economiclossisnotrecoverable.Almostfortyyearsofexperiencewiththe

SecondRestatementssectiononstrictliabilityhasseenchangesinthelaw,andtheThird

Restatementintroducesthose,butithasnotbeenwidelyacceptedyet.

EXERC ISES

1. Whatwasperceivedtobeinadequateaboutwarrantyandnegligencetheoriesthatnecessitated

thedevelopmentofstrictliability?

2. Brieflydescribethedoctrine.

3. Whatdefectsingoodsrendertheirsellersstrictlyliable?

4. Whocountsasaliableseller?

5. Whatobstaclesdoesaplaintiffhavetoovercomehere,andwhatlimitationsarethereto

recovery?

http://library.findlaw.com/1999/Jun/1/127691.html

9.5TortReform


1. Seewhytortreformisadvocated,whyitisopposed,andwhatintereststakeeachside.

2. Understandsomeofthesignificantstatereformsinthelasttwodecades.

3. Knowwhatfederalreformshavebeeninstituted.

TheCryforReform

In1988,TheConferenceBoardpublishedastudythatresultedfromasurveyofmorethan500chief

executiveofficersfromlargeandsmallcompaniesregardingtheeffectsofproductsliabilityontheir

firms.ThestudyconcludedthatUScompaniesarelesscompetitiveininternationalbusinessbecauseof

theseeffectsandthatproductsliabilitylawsmustbereformed.Thereformefforthasbeenunderway

eversince,withvaryingdegreesofalarmsandfingerpointingastowhoistoblameforthetortcrisis,

ifthereevenisone.Businessandprofessionalgroupsbeatthedrumsfortortreformasameansto

guaranteefairnessinthecourtsaswellasspurUSeconomiccompetitivenessinaglobalmarketplace,

whileplaintiffsattorneysandconsumeradvocatesclaimthatbusinessessimplywanttoexternalize

costsbydenyingrecoverytovictimsofgreedandcarelessness.

Eachsidevilifiestheotherinveryunseemlylanguage:probusinessadvocatescallconsumeroriented

statesjudicialhellholesandcomplainofwellorchestratedcampaign[s]bytortlawyerlobbyistsand

alliestoundoyearsoftortreformatthestatelevel,AmericanTortReformAssociationwebsite,

accessedMarch1,2011,http://www.atra.org.whileproplaintiffinterestsclaimthatthereisscant

evidenceofanytortabuse.http://www.shragerlaw.com/html/legal_rights.html.Itwouldbemore

amusingifitwerenotsoshrillandpartisan.Perhapsthemostonecansaywithanycertaintyisthat

peoplesperceptionofrealityishighlycoloredbytheirselfinterest.Inanyevent,therehavebeen

reforms(or,asthedetractorssay,deforms).

StateReforms

Proddedbyastutelobbyingbymanufacturingandotherbusinesstradeassociations,statelegislatures

respondedtothecriesofmanufacturersaboutthehardshipsthatthejudicialtransformationofthe

productsliabilitylawsuitostensiblyworkedonthem.Moststatelegislatureshaveenactedatleastone

ofsomethreedozenreformproposalpressedonthemoverthelasttwodecades.Someofthese

measuresdolittlemorethanaffirmandclarifycaselaw.Amongthemostthathavepassedinseveral

statesareoutlinedinthenextsections.

StatutesofRepose

Perhapsnothingsofrightensthemanufacturerastheoccasionalreportsofcasesinvolvingproducts

thatwerefiftyorsixtyyearsoldormoreatthetimetheyinjuredtheplaintiff.Manystateshave

addressedthisproblembyenactingthesocalledstatuteofrepose.Thisstatuteestablishesatime

period,generallyrangingfromsixtotwelveyearsthemanufacturerisnotliableforinjuriescausedby

theproductafterthistimehaspassed.

StateoftheArtDefense

Severalstateshaveenactedlawsthatpreventadvancesintechnologyfrombeingheldagainstthe

manufacturer.Thefearisthataplaintiffwillconvinceajuryaproductwasdefectivebecauseitdidnot

usetechnologythatwaslateravailable.Manufacturershaveoftenfailedtoadoptnewadvancesin

technologyforfearthatthechangewillbeheldagainsttheminaproductsliabilitysuit.Thesenew

statutesdeclarethatamanufacturerhasavaliddefenseifitwouldhavebeentechnologicallyimpossible

tohaveusedthenewandsafertechnologyatthetimetheproductwasmanufactured.

FailuretoWarn

Sinceitisofteneasiertoprovethataninjuryresultedbecausethemanufacturerfailedtowarnagainsta

certainusethanitistoproveaninjurywascausedbyadefectivedesign,manufacturersaresubjectedto

http://www.atra.org/http://www.epi.org/publications/entry/bp157

aconsiderabledegreeofhindsight.Someofthestatestatuteslimitthedegreetowhichthefailureto

warncanbeusedtoconnecttheproductandtheinjury.Forexample,themanufacturerhasavalid

defenseifitwouldhavebeenimpossibletoforeseethattheconsumermightmisusetheproductina

certainway.

ComparativeFaultforConsumerMisuse

Contributorynegligenceisgenerallynotadefenseinastrictliabilityaction,whileassumptionofriskis.

Instatesthathaveenactedsocalledcomparativefaultstatutes,theusersdamagesarepeggedtothe

percentageofresponsibilityfortheinjurythatthedefendantbears.Thusiftheconsumersmisuseof

theproductisassessedashavingbeen20percentresponsiblefortheaccident(orfortheextentofthe

injuries),theconsumerisentitledtoonly80percentofdamages,theamountforwhichthedefendant

manufacturerisresponsible.

CriminalPenalties

Notallstatereformisfavorabletomanufacturers.UndertheCaliforniaCorporateCriminalLiability

Act,whichtookeffecttwentyyearsago,companiesandmanagersmustnotifyastateregulatoryagency

iftheyknowthataproducttheyaresellinginCaliforniahasasafetydefect,andthesameruleapplies

undercertainfederalstandards,asToyotaexecutiveswereinformedbytheirlawyersfollowingalarms

aboutsuddenaccelerationinsomeToyotaautomobiles.Failuretoprovidenoticemayresultin

corporateandindividualcriminalliability.

FederalReform

Piecemealreformofproductsliabilitylawineachstatehascontributedtothebasiclackofuniformity

fromstatetostate,givingitacrazyquilteffect.Inthenineteenthcentury,thismighthavemadelittle

difference,buttodaymostmanufacturerssellinthenationalmarketandaresubjectedtothevarying

requirementsofthelawineverystate.ForyearstherehasbeentalkinandoutofCongressofenacting

afederalproductsliabilitylawthatwouldincludereformsadoptedinmanystates,asdiscussedearlier.

Sofar,theseeffortshavebeenwithoutmuchsuccess.

Congressionaltortlegislationisnottheonlypossiblefederalactiontocopewithproductsrelated

injuries.In1972,CongresscreatedtheConsumerProductSafetyCommission(CPSC)andgavethe

commissionbroadpowertoacttopreventunsafeconsumerproducts.TheCPSCcanissuemandatory

safetystandardsgoverningdesign,construction,contents,performance,packaging,andlabelingof

morethan10,000consumerproducts.Itcanrecallunsafeproducts,recovercostsonbehalfofinjured

consumers,prosecutethosewhoviolatestandards,andrequiremanufacturerstoissuewarningson

hazardousproducts.Italsoregulatesfourfederallawspreviouslyadministeredbyotherdepartments:

theFlammableFabricsAct,theHazardousSubstancesAct,thePoisonPreventionPackagingAct,and

theRefrigeratorSafetyAct.Initsearlyyears,theCPSCissuedstandardsforbicycles,powermowers,

televisionsets,architecturalglass,extensioncords,bookmatches,poolslides,andspaceheaters.But

thelistofproductsislong,andtheCPSCsrecordismixed:ithascomeunderfireforbeingshorton

regulationandfortakingtoolongtopromulgatetherelativelyfewsafetystandardsithasissuedina

decade.

KEY TAKEAWAY

BusinessadvocatesclaimtheAmericantortsystemproductsliabilitylawincludedisbrokenand

corruptedbygraspingplaintiffslawyers;plaintiffslawyerssaybusinessesaregreedyandcarelessand

needtobesmackedintorecognitionofitsresponsibilitiestobemorecareful.Thedebaterageson,

decadeafterdecade.Buttherehavebeensomereformsatthestatelevel,andatthefederallevelthe

ConsumerProductSafetyActsetsoutstandardsforsafeproductsandrequiresrecallsfordefective

ones.Itisregularlycastigatedfor(1)beingofficiousandmeddlingor(2)beingtootimid.

EXERC ISES

1. WhyisitsodifficulttodetermineiftherereallyisatortcrisisintheUnitedStates?

2. Whatreformshavebeenmadetostatetortlaw?

3. Whatfederallegislationaffectsconsumersafety?

9.6Cases

ImpliedWarrantyofMerchantabilityandtheRequirementofaSale

Sheeskinv.GiantFood,Inc.

318A.2d874(Md.App.1974)

Davidson,J.

EveryFridayforovertwoyearsNathanSeigel,age73,shoppedwithhiswifeataGiantFoodStore.This

complexproductsliabilitycaseisbeforeusbecauseononeoftheseFridays,23October1970,Mr.

SeigelwascarryingasixpackcartonofCocaColafromadisplaybinattheGianttoashoppingcart

whenoneormoreofthebottlesexploded.Mr.Seigellosthisfooting,felltothefloorandwasinjured.

IntheCircuitCourtforMontgomeryCounty,Mr.SeigelsuedboththeGiantFood,Inc.,andthe

WashingtonCocaColaBottlingCompany,Inc.,fordamagesresultingfromtheirallegednegligenceand

breachofanimpliedwarranty.AttheconclusionofthetrialJudgeWalterH.Moormandirecteda

verdictinfavorofeachdefendant.

Inanactionbasedonbreachofwarrantyitisnecessaryfortheplaintifftoshowtheexistenceofthe

warranty,thefactthatthewarrantywasbrokenandthatthebreachofwarrantywastheproximate

causeofthelosssustained.[UCC]2314.Theretailer,GiantFood,Inc.,contendsthatappellantfailed

toprovethatanimpliedwarrantyexistedbetweenhimselfandtheretailerbecausehefailedtoprove

thattherewasasalebytheretailertohimoracontractofsalebetweenthetwo.Theretailermaintains

thattherewasnosaleorcontractofsalebecauseatthetimethebottlesexplodedMr.Seigelhadnotyet

paidforthem.Wedonotagree.

[UCC]2314(1)statesinpertinentpart:

Unlessexcludedormodified,awarrantythatthegoodsshallbemerchantableisimpliedinacontract

fortheirsaleifthesellerisamerchantwithrespecttogoodsofthatkind.UniformCommercialCode,

Section2316.(emphasisadded)

Thus,inorderfortheimpliedwarrantiesof2314tobeapplicabletheremustbeacontractforsale.

InMarylandithasbeenrecognizedthatneitheracompletedsalenorafullyexecutedcontractforsale

isrequired.Itisenoughthattherebeinexistenceanexecutorycontractforsale.

Here,theplaintiffhastheburdenofshowingtheexistenceofthewarrantybyestablishingthatatthe

timethebottlesexplodedtherewasacontractfortheirsaleexistingbetweenhimselfandtheGiant.

[Citation]Mr.Titus,themanageroftheGiant,testifiedthattheretailerisaselfservicestoreinwhich

theonlywayacustomercanbuyanythingistoselectithimselfandtakeittothecheckoutcounter.He

statedthatthereareoccasionswhenacustomermayselectaniteminthestoreandthenchangehis

mindandputtheitemback.Therewasnoevidencetoshowthattheretailereverrefusedtosellanitem

toacustomeronceithadbeenselectedbyhimorthattheretailerdidnotconsiderhimselfboundtosell

anitemtothecustomeraftertheitemhadbeenselected.Finally,Mr.Titussaidthatanemployeeof

GiantplacedthesixpackofCocaColaselectedbyMr.Seigelontheshelfwiththepurchaseprice

alreadystampeduponit.Mr.Seigeltestifiedthathepickedupthesixpackwiththeintenttopurchase

it.

Wethinkthatthereissufficientevidencetoshowthattheretailersactofplacingthebottlesuponthe

shelfwiththepricestampeduponthesixpackinwhichtheywerecontainedmanifestedanintentto

offerthemforsale,thetermsoftheofferbeingthatitwouldpasstitletothegoodswhenMr.Seigel

presentedthematthecheckoutcounterandpaidthestatedpriceincash.Wealsothinkthatthe

evidenceissufficienttoshowthatMr.Seigelsactoftakingphysicalpossessionofthegoodswiththe

intenttopurchasethemmanifestedanintenttoaccepttheofferandapromisetotakethemtothe

checkoutcounterandpayforthemthere.

[UCC]2206providesinpertinentpart:

(1)Unlessotherwiseunambiguouslyindicatedbythelanguageorcircumstances

(a)Anoffertomakeacontractshallbeconstruedasinvitingacceptanceinanymannerandbyany

mediumreasonableinthecircumstances.

TheOfficialComment1tothissectionstates:

Anyreasonablemannerofacceptanceisintendedtoberegardedasavailableunlesstheofferorhas

madequiteclearthatitwillnotbeacceptable.

Inourviewthemannerbywhichacceptancewastobeaccomplishedinthetransactionhereininvolved

wasnotindicatedbyeitherlanguageorcircumstances.Thesellerdidnotmakeitclearthatacceptance

couldnotbeaccomplishedbyapromiseratherthananact.Thusitisequallyreasonableunderthe

termsofthisspecificofferthatacceptancecouldbeaccomplishedinanyofthreeways:1)bytheactof

deliveringthegoodstothecheckoutcounterandpayingforthem2)bythepromisetopayforthe

goodsasevidencedbytheirphysicaldeliverytothecheckoutcounterand3)bythepromisetodeliver

thegoodstothecheckoutcounterandtopayforthemthereasevidencedbytakingphysicalpossession

ofthegoodsbytheirremovalfromtheshelf.

Thefactthatcustomers,havingonceselectedgoodswiththeintenttopurchasethem,arepermittedby

thesellertoreturnthemtotheshelvesdoesnotprecludethepossibilitythataselectionofthegoods,as

evidencedbytakingphysicalpossessionofthem,couldconstituteareasonablemodeofacceptance.

Section2106(3)provides:

Terminationoccurswheneitherpartypursuanttoapowercreatedbyagreementorlawputsanend

tothecontractotherwisethenforitsbreach.Onterminationallobligationswhicharestillexecutory

onbothsidesaredischargedbutanyrightbasedonpriorbreachorperformancesurvives.

Heretheevidencethattheretailerpermitsthecustomertochangehismindindicatesonlyan

agreementbetweenthepartiestopermittheconsumertoendhiscontractwiththeretailerirrespective

ofabreachoftheagreementbytheretailer.Itdoesnotindicatethatanagreementdoesnotexistprior

totheexerciseofthisoptionbytheconsumer.

HereMr.Seigeltestifiedthatallofthecircumstancessurroundinghisselectionofthebottleswere

normalthatthecartoninwhichthebottlescamewasnotdefectivethatinliftingthecartonfromthe

shelfandmovingittowardhisbasketthebottlesneithertouchednorweretouchedbyanythingother

thanhishandthattheyexplodedalmostinstantaneouslyafterheremovedthemfromtheshelfand

thatasaresultoftheexplosionhefellinjuringhimself.ItisobviousthatCocaColabottleswhichwould

breakundernormalhandlingarenotfitfortheordinaryuseforwhichtheywereintendedandthatthe

relinquishmentofphysicalcontrolofsuchadefectivebottletoaconsumerconstitutesabreachof

warranty.Thustheevidencewassufficienttoshowthatwhenthebottleslefttheretailerscontrolthey

didnotconformtotherepresentationsofthewarrantyofmerchantability,andthatthisbreachofthe

warrantywasthecauseofthelosssustained.

[JudgmentinfavorofGiantFoodsisreversedandthecaseremandedforanewtrial.Judgmentinfavor

ofthebottlerisaffirmedbecausetheplaintifffailedtoprovethatthebottlesweredefectivewhenthey

weredeliveredtotheretailer.]

CASE QUEST IONS

1. Whatwarrantydidtheplaintiffcomplainwasbreachedhere?

2. Bydisplayingthesodapop,thestoremadeanoffertoitscustomers.Howdidthecourtsaysuch

offersmightbeaccepted?

3. Whydidthecourtgetintothediscussionaboutterminationofthecontract?

4. Whatisthecontrollingruleoflawappliedinthiscase?

StrictLiabilityandBystanders

Embsv.PepsiColaBottlingCo.ofLexington,Kentucky,Inc.

528S.W.2d703(Ky.1975)

Jukowsky,J.

OntheafternoonofJuly25,1970plaintiffappellantenteredtheselfserviceretailstoreoperatedby

thedefendantappellee,StampersCashMarket,Inc.,forthepurposeofbuyingsoftdrinksforthe

kids.Shewenttoanuprightsoftdrinkcooler,removedfivebottlesandplacedtheminacarton.

Unnoticedbyher,acartonofSevenUpwassittingonthefloorattheedgeoftheproducecounter

aboutonefootfromwhereshewasstanding.Assheturnedawayfromthecoolersheheardan

explosionthatsoundedlikeashotgun.Whenshelookeddownshesawagashinherleg,poponher

leg,greenpiecesofabottleonthefloorandtheSevenUpcartoninthemidstofthedebris.Shedidnot

kickorotherwisecomeintocontactwiththecartonofSevenUppriortotheexplosion.Herson,who

waswithher,recognizedthegreenpiecesofglassaspartofaSevenUpbottle.

ShewasimmediatelytakentothehospitalbyMrs.Stamper,amanagingagentofthestore.Mrs.

StampertoldherthataSevenUpbottlehadexplodedandthatseveralbottleshadexplodedthatweek.

BeforeleavingthestoreMrs.Stamperinstructedoneofherchildrentocleanupthemess.Apparently,

allofthephysicalevidencewentoutwiththetrash.ThelocationoftheSevenUpcartonimmediately

beforetheexplosionwasnotaplacewheresuchitemswereordinarilykept.

Whensherestedhercase,thedefendantsappelleesmovedforadirectedverdictintheirfavor.Thetrial

courtgrantedthemotiononthegroundsthatthedoctrineofstrictproductliabilityintortdoesnot

extendbeyondusersandconsumersandthattheevidencewasinsufficienttopermitaninferencebya

reasonablyprudentmanthatthebottlewasdefectiveorifitwas,whenitbecameso.

In[Citation]weadoptedtheviewofstrictproductliabilityintortexpressedinSection402Aofthe

AmericanLawInstitutesRestatementofTorts2d.

402A.SpecialLiabilityofSellerofProductforPhysicalHarmtoUserorConsumer

(1)Onewhosellsanyproductinadefectiveconditionunreasonablydangeroustotheuserortohis

propertyissubjecttoliabilityforphysicalharmtherebycausedtotheultimateuserorconsumer,orto

hisproperty,if

(a)thesellerisengagedinthebusinessofsellingsuchaproduct,and

(b)itisexpectedtoanddoesreachtheuserorconsumerwithoutsubstantialchangeintheconditionin

whichitwassold.

(2)TherulestatedinSubsection(1)appliesalthough

(a)thesellerhasexercisedallpossiblecareinthepreparationandsaleofhisproduct,and

(b)theuserorconsumerhasnotboughttheproductfromorenteredintoanycontractualrelationwith

theseller.

Commentfonthatsectionmakesitabundantlyclearthatthisruleappliestoanypersonengagedinthe

businessofsupplyingproductsforuseorconsumption,includinganymanufacturerofsuchaproduct

andanywholesaleorretaildealerordistributor.

Commentcpointsoutthatonwhatevertheory,thejustificationfortherulehasbeensaidtobethatthe

seller,bymarketinghisproductforuseandconsumption,hasundertakenandassumedaspecial

responsibilitytowardanymemberoftheconsumingpublicwhomaybeinjuredbyitthatthepublichas

therighttoanddoesexpectthatreputablesellerswillstandbehindtheirgoodsthatpublicpolicy

demandsthattheburdenofaccidentalinjuriescausedbyproductsintendedforconsumptionbeplaced

uponthosewhomarketthem,andbetreatedasacostofproductionagainstwhichliabilityinsurance

canbeobtainedandthattheconsumerofsuchproductsisentitledtothemaximumofprotectionat

thehandsofsomeone,andtheproperpersonstoafforditarethosewhomarkettheproducts.

ThecaveattothesectionprovidesthattheInstituteexpressesnoopinionastowhethertherulemay

notapplytoharmtopersonsotherthanusersorconsumers.CommentoncaveatostatestheInstitute

expressesneitherapprovalnordisapprovalofexpansionoftheruletopermitrecoverybycasual

bystandersandotherswhomaycomeincontactwiththeproduct,andadmitstheremaybenoessential

reasonwhysuchplaintiffsshouldnotbebroughtwithinthescopeofprotectionafforded,otherthan

theydonothavethesamereasonsforexpectingsuchprotectionastheconsumerwhobuysamarketed

product,andthatthesocialpressurewhichhasbeenlargelyresponsibleforthedevelopmentoftherule

hasbeenaconsumerspressure,andthereisnotthesamedemandfortheprotectionofcasual

strangers.

Thecaveatarticulatestheessentialpoint:Oncestrictliabilityisaccepted,bystanderrecoveryisfait

accompli.

Ourexpressedpublicpolicywillbefurtheredifweminimizetheriskofpersonalinjuryandproperty

damagebychargingthecostsofinjuriesagainstthemanufacturerwhocanprocureliabilityinsurance

anddistributeitsexpenseamongthepublicasacostofdoingbusinessandsincetheriskofharmfrom

defectiveproductsexistsformerebystandersandpassersbyaswellasforthepurchaseroruser,there

isnosubstantialreasonforprotectingoneclassofpersonsandnottheother.Thesamepolicyrequires

ustomaximizeprotectionfortheinjuredthirdpartyandpromotethepublicinterestindiscouraging

themarketingofproductshavingdefectsthatareamenacetothepublicbyimposingstrictliability

uponretailersandwholesalersinthedistributivechainresponsibleformarketingthedefectiveproduct

whichinjuresthebystander.Theimpositionofstrictliabilityplacesnounreasonableburdenupon

sellersbecausetheycanadjustthecostofinsuranceprotectionamongthemselvesinthecourseoftheir

continuingbusinessrelationship.

Wemustnotshirkfromextendingtheruletothemanufacturerforfearthattheretailerormiddleman

willbeimpaledontheswordofliabilitywithoutregardtofault.Theirliabilitywasalreadyestablished

underSection402AoftheRestatementofTorts2d.Asamatterofpublicpolicytheretaileror

middlemanaswellasthemanufacturershouldbeliablesincethelossforinjuriesresultingfrom

defectiveproductsshouldbeplacedonthosemembersofthemarketingchainbestabletopaytheloss,

whocanthendistributesuchriskamongthemselvesbymeansofinsuranceandindemnityagreements.

[Citation]

Theresultwhichwereachdoesnotgivethebystanderafreeride.Whenproductsandconsumersare

consideredintheaggregate,bystanders,asaclass,purchasemostofthesameproductstowhichthey

areexposedasbystanders.Thus,asaclass,theyindirectlysubsidizetheliabilityofthemanufacturer,

middlemanandretailerandinthissensedopayfortheinsurancepolicytiedtotheproduct.

Forthesakeofclaritywerestatetheextensionoftherule.TheprotectionsofSection402Aofthe

RestatementofTorts2dextendtobystanderswhoseinjuryfromthedefectiveproductisreasonably

foreseeable.

ThejudgmentisreversedandthecauseisremandedtotheClarkCircuitCourtforfurtherproceedings

consistentherewith.

Stephenson,J.(dissenting):

Irespectfullydissentfromthemajorityopiniontotheextentthatitsubjectsthesellertoliability.Every

ruleoflawinmymindshouldhavearationalbasis.Iseenonehere.

Liabilityofthesellertotheuser,orconsumer,isbaseduponwarranty.Restatement,Second,Tortss

403A.Toextendthisliabilitytoinjuriessufferedbyabystanderistodepartfromanyreasonablebasis

andimposeliabilitybyjudicialfiatuponanotherwiseinnocentdefendant.Idonotbelievethatthe

expressioninthemajorityopinionwhichjustifiesthisruleforthereasonthatthesellermayprocure

liabilityinsuranceprotectionisavalidlegalbasisforimposingliabilitywithoutfault.Irespectfully

dissent.

CASE QUEST IONS

1. Whydidnttheplaintiffhereusewarrantyasatheoryofrecovery,asMr.Seigeldidinthe

previouscase?

2. Thecourtoffersarationaleforthedoctrineofstrictproductsliability.Whatisit?

3. Restatement,Section402A,byitstermsextendsprotectiontotheultimateuserorconsumer,

butMrs.Embs[plaintiffappellant]wasnotthat.Whatrationaledidthecourtgiveforexpanding

theprotectionhere?

4. Amongtheentitiesintheverticaldistributionchainmanufacturer,wholesaler,retailerwhois

liableunderthisdoctrine?

5. WhatargumentdidJudgeStephensonhavein

products liability

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