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LEGAL ASPECTS of MANAGING TECHNOLOGY Third Ed. LEE BURGUNDER. Tort Liability for Physical and Economic Harms. Chapter 13. Negligence. Governed by state law. Negligence defined:

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Third Ed.


Tort Liability forPhysical and Economic Harms

Chapter 13


  • Governed by state law.

  • Negligence defined:

    • Conduct that falls below the standard established by law for the protection of others against unreasonable risk of harm.

Negligence and the Restatement of Torts

  • For tort liability to arise:

    • The negligent conduct must cause injury.

    • Social policy must make the person responsible for the harm caused by the negligence.

    • There must be no defenses that limit tort liability.

Negligence Analysis

  • Duty of Care

    • Reasonable person standard.

    • Community standards.

    • Legal standards.

    • Professional standards.

    • Economic formulations.

      • Prevention costs v. expected losses from injuries.

      • Cheapest cost provider.

Causation Analysis

  • Direct Causation.

    • But-for analysis.

    • Joint and several liability.

  • Proximate Cause.

    • Liability extends to persons and property to which harm from negligence is reasonably foreseeable.

Defenses to Negligence

  • Assumption of Risk.

  • Comparative fault.

Vuono v. New York Blood Center

  • Issue:Did the N.Y. Blood Center fulfill its duty of care with respect to the contaminated vial?

  • Decision: No. It is possible that the N.Y. Blood Center was negligent for using the contaminated vial.

  • Rationale: Standard of care for negligence may exceed industry standards.


Policy Reasons for Strict Products Liability

  • Negligence may not compensate every consumer.

    • Coca-Cola example.

  • Sense of justice.

  • Economic efficiency.

  • Incentive for continuous improvement.

  • Fundamental Negative.

    • Making someone responsible for a tragedy when they are not blameworthy.

Products Liability: General Principles

  • Seller is liable for harm resulting from a product that was in a defective condition unreasonably dangerous to the user, regardless of fault.

  • Applies only to sellers who regularly engage in distributing the product.

  • Condition of the product must not be substantially changed by another party before the injuries take place.

  • Injured person may sue any seller within the distribution chain.

Forms of Product Defects

  • Manufacturing Defects.

    • The unit causing injury was not manufactured as safely as the manufacturer intended.

  • Design Defects.

    • The unit was manufactured as intended, but it is defective because it should have been designed more safely.

  • Failure to Warn.

    • The unit is manufactured correctly and designed as safely as possible, but it nonetheless is defective because it did not warn users sufficiently about inherent dangers.

Barker v. Lull Engineering

  • Issue: Was Lull’s High-Lift Loader defectively designed?

  • Decision: Yes. Lull’s design was defective.

  • Rationale: Consumer Expectation Test.

    • The product fails to perform as safely as an ordinary consumer would expect for intended uses and reasonably foreseeable unintended uses.

    • Use of loader by inexperienced worker may be a reasonably foreseeable unintended use.

The New Restatement of Torts on Product Liability

  • The risk/benefit test is the sole basis of analysis.

  • Consumer expectations are not a separate test, but part of the risk/benefit test.

  • Factors:

    • The magnitude and probability of harm.

    • Instructions and warnings.

    • Consumer expectations

    • The advantages and disadvantages of potential alternatives

The New Restatement of Torts:Failure to Warn

  • Foreseeable risks of harm could have been reduced by the provision of reasonable instructions or warnings.

  • Important factors:

    • Gravity and risks posed by the product.

    • Content and comprehensibility of the warning.

    • Intensity of expression.

    • Characteristics of expected user groups.

CPSC Regulations

  • A firm must notify CPSC when:

    • Information reasonably supports the conclusion that a product fails to comply with CPSC regulations or an industry standard.

    • Product contains a defect that could create a substantial product hazard.

    • Product creates an unreasonable risk of serious injury or death.

    • Product has been subject to 3 civil suits within 2 calendar years.

Strict Product Liability and The Computer Industry

  • Expert systems and medical treatment.

  • Year 2000 (Y2K) concerns.

  • Repetitive motion injuries.

  • Tort Litigation.

Intentional Torts Involving Computer Systems

  • Computer systems are vulnerable to both negligent and intentional injury.

  • Trespass by E-Robots.

    • Ebay, Inc. v. Bidder’s Edge. Issue: Did BE trespass onto Ebay’s property? Decision: Yes. BE was enjoined from accessing Ebay’s computers.

Intentional Torts Involving Computer Systems

  • Spam.

  • Spam and Trespass.

  • Computer Viruses, Trojan Horses and Worms.

  • Electronic Coercion and Self Help.

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