2. INTRODUCTION:-
If your business supplies products to
consumers , you need to make sure the
products are safe.
Most injuries and illness resulting from
products were covered under contract law
not tort law.
Case : Macpherson Vs Buick
3. Macpherson Vs Buick:-
Macpherson was thrown out of his buick and injured when
one of the wooden spokes on a wheel collapsed. Even
though buick sub-contracted the production of the wheel
to another firm and buick sold the car to a retailer, who in
turn sold it to Macpherson, the court found that buick was
liable for damages.
4. Strict liability standard:-
Case : Escola Vs Coca-Cola Bolting Company.
Escola was loading coke bottles into the Refrigerator
When one of the bottles exploded, injuring her hand.
Judge traynor’s opinion in the case clearly states that
negligence rule should be replaced by a standard that makes
manufacturers liable whenever their products are defective.
5. Second Restatement of Torts:
According to section 402A , it states that manufacturers
are liable if consumers are harmed as a result of using a
product that is “unreasonably dangerous” and defective.
The doctrine in this statement is adopted by all the states
in the subsequent decades.
6. Types of defects:-
There are three general types of product defects.
1. Manufacturing defect
2. Design defect
3. Warning defect
7. Contractual liability:-
Firms are subject to liability under contract law as a result
of warranties that are made when products and services
are sold to consumers.
1. Express warranty
2. Implied warranty
8. Responsibilities as a producer ,
distributor or seller:-
Warning consumers about potential risks.
Providing information to help consumers understand the
risks.
Monitoring safety of the products.
Taking action if a safety problem Is found.
9. Responsibilities as a producer ,
distributor or seller:-
Particular care should be taken with high risk products
such as;
1. Toys
2. Fireworks
3. Food
4. Medicines
10. Product safety:-
The main responsibility on product safety falls on
producers. This includes ;
1. Manufacturers
2. Importers
3. Businesses that supply own brand products
4. Businesses that change the safety of a product. (by
customizing/ servicing)
11. Distributors:-
Shops and wholesalers are not normally liable for harm to
consumers as long as they identify the producer.
But they have the responsibility for safety and can face
enforcement action.
Any one who is harmed by unsafe product can begin court
case up to 3 years-10 years.
12. Trading standards:-
If the products are unsafe the trading standard officers can
;
1. Order you to stop selling them
2. Go to court and ask for the product to be destroyed
3. Prosecute you- if convicted you could be fined or
imprisoned.
13. Defending product liability claim:-
In case of distributor he must be able to identify the
producer.
In case of producer, if default is in production process he
may not admit the liability. Then he need to prove one of
the 6 defenses;
14. Defending product liability claim:-
1. You did not supply the product.
2. You could not reasonably be expected to discover the safety fault.
3. Safety fault was an inevitable result of obeying other laws.
4. Someone else caused the fault in the course of business.
5. You didn’t supply the product in the course of business.
6. If you make components, then you are not liable only if you can
identify the manufacturer.
15. Insurance coverage:-
Insurance coverage for products liability generally
provided by a firm’s Commercial General Liability (CGL)
insurance policy.
CGL policy provides liability insurance coverage for
property damage and bodily injuries.
16. Issues:-
Product liability has expanded to the point that both the
safety and compensation objectives of the liability system
have been undermined.
1. Product safety
2. Compensation for injury
3. Regressivity of current system
4. Products liability reform proposals
17. Preventing product safety
problems:-
Consider safety at every stage from initial design to selling.
Check whether there are any specific regulations or safety standards
applying to your product that you meet them.
In case of suppliers;
1. Give customers any safety information provided by the producer.
2. Investigate safety complaints
3. Co-operate with trading standard officers.