Clarkson14e - PPT - ch07 Strict Liability and Product Liability

BUSINESS LAW
TEXT AND CASES

Fourteenth Edition
CLARKSON MILLER CROSS 

 

CHAPTER 7: STRICT LIABILITY

AND PRODUCT LIABILITY
© 2018 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
§1: STRICT LIABILITY (1 OF 4)
 Strict Liability: Liability regardless of fault.
Under the doctrine of strict liability, a
person who engages in certain activities
can be held responsible for any harm
that results to others, even if the person
used the utmost care. 
© 2018 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2
STRICT LIABILITY (2 OF 4)
 Abnormally Dangerous Activities:
Ultrahazardous or abnormally
dangerous activities:
• Involve serious potential harm;
• Involve high degree of risk that
cannot be made safe; and
• Are not commonly performed in the
community or area.
 Wild Animals:
Owners keeping wild animals are
strictly liable for injuries.
Persons who keep domestic animals
are liable if the owner knew or should
have known the animal was dangerous.
 Application of Strict Liability to Product
Liability:
The manufacturer can better bear the
cost of injury because it can spread the
cost throughout society by price
increases.
The manufacturer is making a profit
from its activities and should bear the
cost of injury as an operating expense.
§2: PRODUCT LIABILITY (1 OF 5)
 Product Liability: A manufacturer’s,
seller’s, or lessor’s liability to
consumers, users, and bystanders for
physical harm or property damage that
is caused by the goods.
PRODUCT LIABILITY (2 OF 5)
 Based on Negligence: Manufacturer’s
failure to exercise reasonable standard of
care.
Due care must be exercised in:
• Design, materials, production process,
assembling and testing, adequate
warnings, inspection, and testing. 
 Privity of Contract Not Required:
• No privity of contract required
between plaintiff and manufacturer.
• Liability extends to any person’s
injuries caused by a negligently
made (defective) product.
 “Cause in Fact” and Proximate Cause:
Plaintiff must show that the
defendant’s conduct was the “cause
in fact” of an injury.
It must also be determined that the
defendant’s act was the proximate
cause of the injury.
 Misrepresentation:
Occurs when fraud committed
against consumer or user of product.
Fraud must have been made
knowingly or with reckless disregard
for safety.
Plaintiff does not have to show
product was defective.
§3: STRICT PRODUCT LIABILITY (1 OF 14)
 Strict product liability holds people
liable for results of their acts, regardless
of their intentions or exercise of
reasonable care. 
STRICT PRODUCT LIABILITY (2 OF 14)
 Strict Liability and Public Policy:
Consumers should be protected from
unsafe products.
Manufacturers and distributors should
be liable to any user of the product.
Manufacturers, sellers, and distributors
can bear the costs of injuries.
 CASE 7.2 BRUESEWITZ V. WYETH, LLC (2011).
 Requirements for Strict Liability:
1. Product must be in defective condition
when sold.
2. Defendant is in the business of selling
the product.
3. Product must be unreasonably
dangerous. 
 Requirements for Strict Liability:
4. Plaintiff must be physically harmed.
5. Defective condition must be proximate
cause of injury.
6. Goods are in substantially same
condition.
 Proving a Defective Condition.
• Plaintiff does not need to show why or
in what manner the product became
defective.
• But plaintiff must show product was
defective and “unreasonably
dangerous” at purchase. 
 “Unreasonably Dangerous” Products:
The product was dangerous beyond
the expectation of the ordinary
consumer.
A less dangerous alternative was
economically feasible for the
manufacturer, but the manufacturer
failed to produce it.
 Product Defects (Restatement 3rd of
Torts): Claims that a product is
unreasonably dangerous generally fall
into one of three categories:
• Manufacturing Defects. 
• Design Defects. 
• Warning Defects. 
 Manufacturing Defect: Occurs when a
product “departs from its intended
design even though all possible care was
exercised in the preparation and
marketing of the product.”
Quality Control: Manufacturer failed to
exercise due care in the manufacture,
assembly, or testing of the product.
 Design Defects: Product is unreasonably
dangerous as designed even if it is
manufactured correctly.
Test for Design Defects: The plaintiff
must show defendant’s failure to use a
reasonable alternative design that
rendered the product not reasonably
safe. 
 Design Defects:
Risk-Utility Analysis: Determines whether
the risk of harm from the product
outweighs its utility to the user and
public.
Consumer Expectation Test.
 SEE WILSON SPORTING GOODS CO. V. HICKOX
(2013).
 Inadequate Warnings: Product is defective
based on inadequate end-user warnings or
instructions. 
 SEE JOHNSON V. MEDTRONIC, INC. (2012).
 Inadequate Warnings:
Foreseeable Misuses.
Content of Warning: Courts apply a
“reasonableness” test to determine if
the warnings adequately alert
consumers to the product’s risks.
Obvious Risks: No duty to warn about
obvious or commonly known risks.
 Market-Share Liability:
Liability when multiple defendants
contributed to manufacture of same
defective product.
Each defendant is proportionately liable
based on its market share.
 Other Applications of Strict Liability:
Virtually all courts extend strict
liability to injured bystanders.
Strict liability also applies to suppliers
of component parts.
§4: DEFENSES TO
 Preemption: Government regulations
preempt claims for product liability.
 Assumption of Risk: (1) The plaintiff knew
and appreciated the risk created by the

alleged product defect, and (2) the plaintiff
voluntarily assumed the risk, even though
it was unreasonable to do so. 
DEFENSES TO
 Product Misuse: (1) Plaintiff was misusing the
product, and (2) plaintiff’s misuse was not
reasonably foreseeable to the defendant.
 Comparative Negligence (Fault): Plaintiff’s
own negligence or wrongful acts contributed
to her injury.
 Commonly Known Dangers: A danger so
commonly known that the defendant had no
duty to warn plaintiff.
DEFENSES TO
 Knowledgeable User: A danger so commonly
known by particular users of the product that
the defendant had no duty to warn plaintiff.
 Statutes of Limitation: Vary by state law but
are typically two to four years.
 Statutes of Repose: Place outer time limits
on product liability actions so that sellers and
manufacturers are not left vulnerable to
lawsuits indefinitely.

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BUSINESS LAW

TEXT AND CASES

CLARKSON MILLER CROSS 

CHAPTER 7: STRICT LIABILITY

and appreciated the risk created by the

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