Defective Products Law

By Aaron Larson

March, 2005

Contents

• Product Liability Law
• Common Product Liability Claims
• Common Theories of Product Liability
• Legislation Affecting Product Liability
• The Economic Loss Rule

Product Liability Law

Product liability law, also called "products liability", governs the liability of manufacturers, wholesalers, distributors, and vendors for damages caused by dangerous or defective products. The goal of product liability laws is to help protect consumers from dangerous products, while holding manufacturers, distributors, and retailers responsible for putting into the marketplace products that they knew or should have known were dangerous or defective. Depending upon the jurisdiction, the liability of the various parties involved as the product passes from the manufacturer to the consumer will vary.

Product liability frequently involves retail items, but can extend to pretty much anything that can be sold. It is possible, for example, for a product liability action to arise from a defect in real estate such as a leaky wall or poorly installed vapor barrierthat causes mold to grow inside a wall, or from a product used in real estate, such as defective siding.

Common Product Liability Claims

There are a number of common theories of liability which may be alleged in product liability claims. These theories of liability may be modified or otherwise limited by state law.

Defective Design: A defective design claim alleges a mistake or oversight in the design of a product, which makes that product dangerous when used as intended, or when used for another reasonably foreseeable purpose. (This may include situations of misuse of the product by an end user, where the misuse was foreseeable to the manufacturer.)

Defective Manufacture: A claim of defective manufacture alleges that a defect resulted from the manufacturing process which created the product.

Marketing Defects: A claim of a marketing defect involves such issues as insufficient instructional material or warning labels or instructions. A plaintiff might allege that such inadequacies foreseeably prevented a user from recognizing a defect in the product, or from being sufficiently aware of how to use or apply the product in a safe manner.

These theories of liability may be modified or limited by state law.

Common Theories of Product Liability

Depending upon the product and circumstances, a claim regarding a defective product may proceed upon a number of theories:

Negligence: Where negligence is alleged, the plaintiff must demonstrate that:

• The parties responsible for placing the product into commerce had a duty to provide goods fit for their foreseeable uses;
• Those parties would have detected the defect(s) alleged by the plaintiff with the exercise of reasonable care in the design, manufacture, or inspection process;
• Those parties failed to fulfill its duty to exercise reasonable care; and
• While engaged in a foreseeable use of the product, the plaintiff was injured by the product as a result of the defect.

Strict Liability: Where strict liability applies, the plaintiff need only establish that a product is defective. Once the defect has been established, liability results from that fact alone no matter how much care the defendant applied during design, manufacture, marketing, distribution and sale of the product.

Breach of Warranty: A warranty claim is more correctly a contract claim, and not a product liability claim. Warranty claims allege contract between a manufacturer or vendor and its customer that the product will be fit for its intended purpose. For an express warranty claim, the plaintiff alleges the violation of an actual written warranty associated with a product. For an implied warranty claim, the plaintiff alleges that although there is no express warranty, or even though the defect alleged is not covered by the express warranty, the defect in the product renders it unfit for its intended purpose.

The elements of a product liability action, and the circumstances under which a strict liability claim may be made, may vary between jurisdictions.

Legislation Affecting Product Liability

Many jurisdictions have enacted product liability statutes which govern litigation over injuries caused by product defects. Some state laws follow a strict liability model, while others have moved away from strict liability and instead place a significant burden of proof on a plaintiff. Some state laws defer to safety determinations made byfederal agencies, such as a determination by the FDA that a medication is safe for sale and use, shielding manufacturers from defects unless the plaintiff can establish that the manufacturer misled the reviewing government agency. Some states immunize parties beyond the point of manufacture, such as distributors and retailers, unless the plaintiff can demonstrate that those parties had actual knowledge of the product defect.

The Economic Loss Rule

Many jurisdictions apply the "economic loss rule" to bar product liablity claims where the only injury is to the allegedly defective product itself. Absent some further injury to a person or other property, this rule restricts the product's owner to remedies based on contract law, such as breach of contract or warranty claims.