Learning Module Contribution 2: Product Liabilities – An Introduction and Review

Product Liabilities

For those entrepreneurs who are in the space of product development, there is an entire body of law that is focused specifically on product liability. Simply put, this body of law focuses primarily on manufacturers, suppliers, retailers, and distributors (and other entities that might make, sell, distribute, or supply products). It should be reiterated and clarified that every entity in the distribution chain has the responsibility associated with Product Liability Law. This is dependent upon the circumstances associated with the defect or injury (this will be addressed in the following section). This body of law works through the nuance associated with this distribution chain (from the cradle to the grave of the product) in order to ensure that the appropriate party(ies) are held responsible for any injuries caused by products. Again, this area of law is focused on protecting the public (writ large) and the customer/consumer specifically. Additionally, this body of law is primarily rooted in states statutes, not federal mandate or law. Meaning, that each state can have their own slightly nuanced interpretation of a product, “meeting the ordinary expectations of the consumer” (http://injury.findlaw.com/product-liability/what-is-product-liability.html). This particular area of law (Product Liability Law) is framed by and informed by the Uniform Commercial Code (UCC) described previously.

An important factor to consider, essentially serving as the prima facie (accepted, at its face) rule, and that is in order for Product Liability Law to come into play, a product must have been sold in the marketplace. This is the trigger event that then holds the manufacturer through to the retailer responsible for the body of product liability. In that past, the law only applied to the individual who purchased the product, but precedence has been established that set the course to include anyone adversely injured by the product can apply Product Liability Law to their suit.

When it comes to Product Liability Law, there are primarily three types (or categories) of liability or defective product cases (recall that any entity within the supply chain can be held responsible/liable for defective products that cause injury – product manufacturer, component manufacturer, assembly or installation entity, wholesaler or retailer, etc.):

  1. Defective manufacture – This defect is primarily based on a manufacturing or fabrication error. Such as if a product (one of the many of that same brand of product) has some inherent defect associated with it that is essentially isolated to that one batch, example, or item. This might be considered an outlier. For example, if a 2016 Toyota Corolla is sold and it did not have windshield wipers (for some reason) and you were driving it in the rain and realized, then had an accident, this would be a defect in the manufacturing process. Again, this represents an outlier.
  2. Defective design – This is similar to defective manufacture, but is not considered an isolated or outlying phenomenon. This would apply to a whole line of products. For example, if a specific type of vehicle (Jeep Wrangler) has a tendency consistently flip over while completing typical tasks associated with normal driving conditions, then this might result in a defective design.
  3. Defective marketing – This defect is primarily focused on the manufacturers’ (and other entities in the supply chain) providing appropriate and adequate instructions, warnings, and notices regarding any hazards associated with the product or information regarding proper use of a specific product. For example, if a car did not include specific instructions about how to use a new style or type (or even a traditional style) of seatbelt and a driver gets into an accident, without proper instructions, warnings, or notices, the entities involved in the manufacturing, distribution, and selling of the vehicle could be held responsible for defective marketing (https://www.nolo.com/legal-encyclopedia/types-of-defective-product-liability-30070.html).

Finally, it should be noted, while it is in fact a shark tank in there, a jungle out there, and a lawyer’s paradise, there are some products that by their very nature, if not handled properly or if used in some altered or uninformed way, can be dangerous (e.g., an electric knife, or electric kettle, or a cordless drill). Rest assured that every injury associated with these types of products will not be considered for a product liability suit. There are standard product liability defenses associated with these sorts of suits.

Additional Resources for Product Liability Law (specifically)

  1. Unbelievable Product Liability Lawsuits (Ivey, 2013) –  http://www.iveyengineering.com/unbelievable-product-liability-lawsuits/
  2. Product Liability: You Are Exposed More Than You Think (Manley, 1987) – https://hbr.org/1987/09/product-liability-youre-more-exposed-than-you-think
  3. “Danger Is My Business”: The Right to Manufacture Unsafe Products (Ausness, 2015) –  http://media.law.uark.edu/arklawreview/files/2015/04/ArkLRev97-4-827-872-Ausness.pdf
  4. A Glimmer of a Solution to America’s Products Liability Mess? (Krauss, 2014) – http://www.forbes.com/sites/michaelkrauss/2014/03/22/a-glimmer-of-a-solution-to-americas-products-liability-mess/#103cd6b619a6
  5. http://injury.findlaw.com/product-liability/what-is-product-liability.html
  6. https://www.nolo.com/legal-encyclopedia/types-of-defective-product-liability-30070.html

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