What is products liability?
Products liability refers to the area of tort law holding manufacturers, sellers, and suppliers of products liable for injuries caused by their products. Products liability actions arise when a product is defective and causes injury or harm to a user or consumer of that product. Products liability actions can be brought under a variety of legal theories, including negligence, strict liability, and breach of warranty.
What is breach of warranty?
Warranty claims are a hybrid of tort and contract law in which a manufacturer or seller makes claims or warranties that a product will perform to a certain level. An express warranty means that a seller represents that a product contains or possesses certain qualities. For example, let's say a manufacturer of a fiberglass door claims that the door is shatterproof. This means that the manufacturer represents that the door will not shatter.
Implied warranties—which are more based on contract law—are those that are implied in the sale of a product without express statements about the product. For example, a warrant of merchantability means that a product is fit for the ordinary purposes for which it is sold.
State law varies as to whether most warranty claims are based on contract law, tort law, or a combination of both.
Why would it be fair to impose strict liability on the manufacturer of a product?
One theory behind allowing strict liability as a basis for recovery in products liability law is that consumers need protection from harm and need compensation for injuries. Thus, the thinking is that risk should be allocated to manufacturers who are better able to absorb the costs and bear the risks associated with the injuries than consumers. A related theory is that manufacturers and sellers are able to incorporate the cost of liability and injuries into the creation of the product itself. Another theory is that many modern products are sophisticated and the average consumer will not be able to prove that a manufacturer was negligent in the creation of the product. Thus, strict liability will allow more consumers to recover damages in tort actions.
What types of problems cause product liability actions?
Most product liability cases arise because of manufacturing defects, design defects, and failure to warn consumers of possible harm. A manufacturing defect means that a single product was produced in a faulty manner that makes it prone to cause injury. For instance, let's say a manufacturer produces 1,000 lawn mowers and 998 operate perfectly. However, in the building process, two lawn mowers were not put together properly. Those two lawn mowers have a manufacturing defect.
A design defect is different. This means that the product itself is flawed in its creation. A lawn mower with a design defect means that all such mowers have the potential to cause harm because of an inherent flaw in the creation of the product. Take the example of a swimming pool that places the diving board near a sloping floor that is not deep enough for divers. This design defect means that a certain number of divers will hit their heads on the pool floor when they dive into the pool.
The last type of defect results from a failure to warn consumers of possible harm that can result from foreseeable misuse of the product.
What was the Ford Pinto problem?
In 1968, Lee Iacocca suggested that Ford Motor Company introduce a subcompact car into the marketplace. The result was the Ford Pinto. The cars seemed fine at first, but later it was determined that a defect in the fuel delivery system made it more likely that the cars would explode upon certain rear-end impacts. Several people died in accidents when they were rear-ended in their Pinto vehicles. Ford chose not to adopt a new design, figuring that the new design would cost more than the occasional damages they would have to pay out in tort cases from family members of deceased drivers. Ford executives knew of potential danger because of test crash studies they had done when building the new car.
Several juries across the country imposed hefty damage awards against Ford as a result of these accidents. A jury in California (Grimshaw v. Ford Motor Co., 119 Cal.App.3d 757, 174 Cal.Rptr. 348 ) imposed millions of dollars in damages against Ford for the death of a woman from fatal burns after her 1972 Pinto was rear-ended. In upholding the award of punitive damages, a California appeals court explained:
Through the results of the crash tests Ford knew that the Pinto's fuel tank and rear structure would expose consumers to serious injury or death in a 20 to 30 mile-per-hour collision. There was evidence that Ford could have corrected the hazardous design defects at minimal cost but decided to defer correction of the shortcomings by engaging in a cost-benefit analysis balancing human lives and limbs against corporate profits. Ford's institutional mentality was shown to be one of callous indifference to public safety. There was substantial evidence that Ford's conduct constituted "conscious disregard" of the probability of injury to members of the consuming public.