Business Law - Theories of Product Liability

Hey everyone, welcome to this lecture where we're going to be discussing the theories of product liability. Now today we're going to explore the legal principles surrounding product liability and we're going to examine three common theories including strict liability, negligence and breach of warranty. We're also going to focus on two essential elements of product liability claims. So let's get started.

Now for starters, product liability refers to the legal responsibility of either manufacturers, distributors or resellers for injuries caused by defective products. Now what a product is defective and causes harm to a consumer, there are some different legal theories that can be invoked to hold the responsible party's liable. The first theory is what's known as strict liability. After this theory, a defendant can be held liable for injuries caused by a defective product regardless of their level of negligence.

Now some of the key elements of strict liability include the following. First there has to be a defective product. So that's the first thing that needs to be established. Now a defect can exist in a few different areas including the product's design, including its manufacturing or its labeling.

The second thing that needs to exist is the defect had to exist at the time of the sale. So in these types of cases, the plaintiff will have to prove that the defect existed when the product left the defendant's control and didn't subsequently occur after that. Now this means that the product was already defective when it was sold or it was distributed in that manner to the consumer. Something important that I want to mention is that in strict liability cases, they focus on the condition of the product rather than on the conduct of the manufacturer.

Now it recognizes that manufacturers have a responsibility to ensure the safety and quality of their products regardless of their level of care. So the same elements of negligence would not have to apply in strict liability cases. Another theory commonly used in product liability cases is negligence. Now to establish a claim of negligence, the following elements have to be proven.

Now if you've watched one of our prior videos, you've seen that we've covered this at nauseam, so I'm just going to merely mention these here briefly. The first is a duty of care. So the manufacturer owes a duty of care to consumers to design, manufacture and sell a safe product. The second thing has to be a breach of duty.

And so the manufacturer breaches the duty of care by failing to meet some required standard of care. It could involve errors in design, the manufacturing process, or maybe a failure to provide some sort of adequate warning or instructions, whether it be the label or the included instructions within the packaging. Next there needs to be causation. So there is a breach of duty that directly causes the plaintiff's injuries.

And then of course there are subsequently damages. So the plaintiff suffers actual harm or damages as a result of using said defective product. Now the existence of a defective product and the presence of the defect when the product left the defendant's control are really essential elements and negligence claims in addition to strict liability claims that we discussed earlier. The third theory of product liability is breach of warranty.

Now a warranty is a guarantee or promise that was made by the manufacturer or seller regarding either the quality, performance, or maybe even the condition of the product. Breach of warranty occurs when the product fails to meet the terms of the warranty. Now there are two types of warranties. The first is what's called an express warranty.

An express warranty is a specific promise made by the manufacturer or the seller about the product's quality, features, or maybe even its performance. Now if the product fails to meet the express warranty, then the plaintiff can bring a claim for breach of warranty. The second type of warranty is what's known as an implied warranty. Now implied warranties are automatically imposed by law and are based on the reasonable expectation of the buyer.

The two main types of implied warranties are the implied warranty of merchantability, which means the product is fit for its ordinary purpose, as well as the implied warranty of fitness for a particular purpose, which represents the product is suitable for a specific intended use. Now as we wrap up this lecture, I want to reiterate that the theories of product liability, which include strict liability, negligence, and breach of warranty, provide avenues for individuals harmed by defective products to seek compensation. By understanding these theories and elements, we can gain some really valuable insights into the legal principles that protect consumers and promote product safety. From a business perspective, we can be aware of the different ways and be cognizant of the potential liabilities that we can incur, and then of course try to set up systems and processes in a manner that would hopefully minimize those liabilities.

Thanks for watching this lecture. I hope you enjoyed it, and we'll see you next time.