Chapter 23

1. Chapter 23 Product Liability

2. Product Liability Law • Determines when manufacturers and sellers of goods are liable • Theories of product liability recovery are rules stating things a plaintiff must prove in order to recover damages

3. Contract Theories of Product Liability Recovery • Three important contract-based theories of product liability • Express warranty • Implied warranty of merchantability • Implied warranty for fitness for a particular purpose • Each created by Article 2 of UCC • Each refers to the sale of goods

4. Express Warranty • Affirmations and descriptions • Samples and models • Basis-of-the-bargain requirement • Advertisements, catalogs, brochures, etc.

5. Implied Warranty of Merchantability • The merchant requirement refers to • Sellers who deal in products • Sellers who deal in services or installations of goods

6. Implied Warranty of Merchantability • Merchantability refers to goods that • Pass without objection in the trade • Are of average quality if fungible • Are fit for the ordinary purposes for which such goods are used • Are of even kind, quality, and quantity within each unit • Are adequately contained, packaged, and labeled • Conform to any promises or affirmations of fact made on the container or label

7. Implied Warranty of Fitness • The seller knows of the particular purpose for which the buyer desires the goods • The seller must have reason to know that buyer is relying on seller’s skill or judgment • The buyer must actually rely on the seller’s skill or judgment

8. Tort Theories • Strict liability (liability without fault) • Risk spreading (liability insurance) • Socialization of risk (passing costs on to consumers)

9. Negligence • Improper manufacture, handling, packaging, or inspection • Duty to warn of foreseeable harm • Design defects

10. Strict Liability • Requirements of Section 402A • Design in defects and failure to warn • Unavoidably unsafe products • Wholesalers and retailers

11. The Reinstatement (Third) • Manufacturing defects • Inadequate instructions or warnings • Design defects

12. Other Theories ofProduct Liability • Magnuson-Moss Act • Misrepresentation • Industry-wide liability

13. Type of Damages • Bases-of-the-bargain damages • Consequential damages • Personal injury, property damage, indirect economic loss • Punitive damages • Damages under the UCC • Tort damages • Tort reform measures

14. The No-Privity Defense • Privity of contract is the existence of direct contractual relationship between two parties • Privity under the UCC • Privity in tort cases

15. Liability Disclaimers • The easy cases • Express warranty disclaimers • Disclaimers and tort liability • Implied warranty disclaimers • The basic tests • Additional ways to disclaim implied warranties • Unconscionability • Impact of Magnuson-Moss

16. Defenses Involving Plaintiff’s Behavior • Traditional defenses • Product misuse • Contributory negligence • Assumption of risk • Movement toward comparative fault

17. Recap – Terms to Know • Express warranty • Implied warranty of fitness for a particular purpose • Warranty of merchantability • Negligence • Strict liability • Restatement (Third) of Torts • Damages • Defendant’s defenses