ThisisProductsLiability,chapter9fromthebookTheLegalEnvironmentandBusinessLaw:ExecutiveMBAEdition(v.1.0).

Fordetailsonit
(includinglicensing),clickhere.
Formoreinformationonthesourceofthisbook,orwhyitisavailableforfree,pleaseseetheproject'shomepage.Youcanbrowseordownload
additionalbooksthere.YoumayalsodownloadaPDFcopyofthisbook(8MB)orjustthischapter(463KB),suitableforprintingormostereaders,
ora.zipfilecontainingthisbook'sHTMLfiles(foruseinawebbrowseroffline).

Hasthisbookhelpedyou?Considerpassingiton:

HelpCreativeCommons

HelpaPublicSchool

CreativeCommonssupportsfreeculturefrommusic
toeducation.Theirlicenseshelpedmakethisbook
availabletoyou.

DonorsChoose.orghelpspeoplelikeyouhelpteachers
fundtheirclassroomprojects,fromartsuppliesto
bookstocalculators.

Chapter9
ProductsLiability
LEARNINGOBJECTIVES
Afterreadingthischapter,youshouldunderstandthefollowing:
1. Howproductsliabilitylawallocatesthecostsofaconsumersociety
2. Howwarrantytheoryworksinproductsliability,andwhatitslimitationsare
3. Hownegligencetheoryworks,andwhatitsproblemsare
4. Howstrictliabilitytheoryworks,andwhatitslimitationsare
5. Whateffortsaremadetoreformproductsliabilitylaw,andwhy

9.1Introduction:WhyProductsLiabilityLawIsImportant
LEARNINGOBJECTIVES
1. Understandwhyproductsliabilitylawunderwentarevolutioninthetwentiethcentury.
2. Recognizethatcourtsplayavitalroleinpolicingthefreeenterprisesystembyadjudicatinghow
thetruecostsofmodernconsumercultureareallocated.
3. Knowthenamesofthemoderncausesofactionforproductsliabilitycases.

Inpreviouschapters,wediscussedremediesgenerally.Inthischapter,wefocusspecificallyon
remediesavailablewhenadefectiveproductcausespersonalinjuryorotherdamages.Productsliability
describesatypeofclaim,notaseparatetheoryofliability.Productsliabilityhasstrongemotional
overtonesrangingfromtheprolitigationpositionofconsumeradvocatestotheconservative
perspectiveofthemanufacturers.

HistoryofProductsLiabilityLaw
Thetheoryofcaveatemptorletthebuyerbewarethatprettymuchgovernedconsumerlawfromthe
PreviousChapter
TableofContents
earlyeighteenthcenturyuntiltheearlytwentiethcenturymadesomesense.Ahorsedrawnbuggyisa
fairlysimpledevice:itsworkingsareapparentapersonofaverageexperienceinthe1870swouldknow
whetheritwasconstructedwellandmadeoftheproperwoods.Mostfoodstuffs150yearsagowere
grownathomeandputupinthehomekitchenorboughtinbulkfromalocalgrocer,subjectto
inspectionandsamplingpeoplemadehomeremediesforcoughsandcoldsandmademanyoftheir
ownclothes.Housesandfurnishingswerebuiltofwood,stone,glass,andplasterfamiliarsubstances.
Entertainmentwasabookorapiano.Thestateoftechnologywassuchthatthethingsconsumedwere,
forthemostpart,comprehensibleandveryimportantmostlylocallymade,whichmeantthatthe
consumerwhosuffereddamagesfromadefectiveproductcouldconfronttheproductsmakerdirectly.

NextChapter

Localreputationisapowerfulinfluenceonbehavior.
Thefreeenterprisesystemconfersgreatbenefits,andnoonecandenythat:materialistically,compare
theimagesketchedinthepreviousparagraphwithcircumstancestoday.Butthosebenefitscomewitha
cost,andthefundamentalpoliticalissuealwaysiswhohastopay.Considerthefollowingfamous
passagefromUptonSinclairsgreatnovelTheJungle.Itappearedin1906.Hewroteittoinspirelabor
reformtohisdismay,thepublicoutragefocusedinsteadonconsumerprotectionreform.Hereishis
descriptionofthesausagemakingprocessinabigChicagomeatpackingplant:

Therewasnevertheleastattentionpaidtowhatwascutupforsausagetherewouldcomealltheway
backfromEuropeoldsausagethathadbeenrejected,andthatwasmoldyandwhiteitwouldbedosed
withboraxandglycerin,anddumpedintothehoppers,andmadeoveragainforhomeconsumption.
Therewouldbemeatthathadtumbledoutonthefloor,inthedirtandsawdust,wheretheworkershad
trampedandspituncountedbillionsofconsumptiongerms.Therewouldbemeatstoredingreatpiles
inroomsandthewaterfromleakyroofswoulddripoverit,andthousandsofratswouldraceabouton
it.Itwastoodarkinthesestorageplacestoseewell,butamancouldrunhishandoverthesepilesof
meatandsweepoffhandfulsofthedrieddungofrats.Theseratswerenuisances,andthepackers
wouldputpoisonedbreadoutforthemtheywoulddie,andthenrats,bread,andmeatwouldgointo
thehopperstogether.Thisisnofairystoryandnojokethemeatwouldbeshoveledintocarts,andthe
manwhodidtheshovelingwouldnottroubletoliftoutaratevenwhenhesawonetherewerethings
thatwentintothesausageincomparisonwithwhichapoisonedratwasatidbit.Therewasnoplacefor
thementowashtheirhandsbeforetheyatetheirdinner,andsotheymadeapracticeofwashingthem
inthewaterthatwastobeladledintothesausage.Therewerethebuttendsofsmokedmeat,andthe
scrapsofcornedbeef,andalltheoddsandendsofthewasteoftheplants,thatwouldbedumpedinto
oldbarrelsinthecellarandleftthere.

Underthesystemofrigideconomywhichthepackersenforced,thereweresomejobsthatitonlypaid
todoonceinalongtime,andamongthesewasthecleaningoutofthewastebarrels.Everyspringthey
diditandinthebarrelswouldbedirtandrustandoldnailsandstalewaterandcartloadaftercartload
ofitwouldbetakenupanddumpedintothehopperswithfreshmeat,andsentouttothepublics
breakfast.Someofittheywouldmakeintosmokedsausagebutasthesmokingtooktime,andwas
thereforeexpensive,theywouldcallupontheirchemistrydepartment,andpreserveitwithboraxand
coloritwithgelatintomakeitbrown.Alloftheirsausagecameoutofthesamebowl,butwhenthey
cametowrapittheywouldstampsomeofitspecial,andforthistheywouldchargetwocentsmorea
pound.UptonSinclair,TheJungle(NewYork:SignetClassic,1963),136.

ItbecameclearfromSinclairsexposthatassociatedwiththemarvelsofthenmodernmeatpacking
anddistributionmethodswasfoodpoisoning:atruecostbecameapparent.Whenthetruecostofsome
moneymakingenterprise(e.g.,cigarettes)becomesinescapablyapparent,therearetwopossibilities.
First,thelegislaturecaninsomewaymandatethatthemanufactureritselfpaythecostwiththe
meatpackingplants,thatwouldbetheimpositionofsanitaryfoodprocessingstandards.Typically,
Congresscreatesanadministrativeagencyandgivestheagencysomemarchingorders,andthenthe
agencycraftsregulationsdictatingasmanyindustrywidereformmeasuresasarepoliticallypossible.
Second,thepeoplewhoincurdamagesfromtheproduct(1)sufferanddieor(2)accessthemachinery
ofthelegalsystemandsuethemanufacturer.Ifplaintiffswinenoughlawsuits,themanufacturers
insurancecompanyraisesrates,forcingreform(aswithhighpoweredmusclecarsinthe1970s)the
businessgoesbankruptorthelegislatureispressuredtoact,eitherfortheconsumerorforthe
manufacturer.

Iftheindustryhasenoughclouttobluntbyvariousmeansarobustproconsumerlegislative
responsesothatgovernmentregulationistoolaxtopreventharm,recourseishadthroughthelegal
system.Thusforallthetalkabouttheneedfortortreform(discussedlaterinthischapter),thecourts
playavitalroleinpolicingthefreeenterprisesystembyadjudicatinghowthetruecostsofmodern
consumercultureareallocated.

Obviouslythesituationhasimprovedenormouslyinacentury,butonedoesnothavetolookveryfar
tofindterribleproblemstoday.Considerthefollowing,whichoccurredin200910:

IntheUnitedStates,Toyotarecalled412,000passengercars,mostlytheAvalonmodel,for
steeringproblemsthatreportedlyledtothreeaccidents.

Portablebabyreclinersthataresupposedtohelpfussybabiessleepbetterwererecalledafterthe
deathofaninfant:theConsumerProductSafetyCommissionannouncedtherecallof30,000Nap
NannyreclinersmadebyBabyMattersofBerwyn,Pennsylvania.
Morethan70,000childrenandteensgototheemergencyroomeachyearforinjuriesand
complicationsfrommedicaldevices.Contactlensesaretheleadingculprit,thefirstdetailed
nationalestimatesuggests.
SmithandNoblerecalled1.3millionRomanshadesandrollershadesafterachildwasnearly
strangled:theConsumerProductSafetyCommissionsaysafiveyearoldboyinTacoma,
Washington,wasentangledinthecordofarollershadeinMay2009.FindLaw,APreports.
TheConsumerProductSafetyCommissionreportedthat4,521peoplewerekilledintheUnited
Statesinconsumerproductrelatedincidencesin2009,andmillionsofpeoplevisitedhospital
emergencyroomsfromconsumerproductrelatedinjuries.USConsumerProductSafety
Commission,2009ReporttothePresidentandtheCongress,accessedMarch1,2011,
http://www.cpsc.gov/cpscpub/pubs/reports/2009rpt.pdf.
Reportsaboutthepossibilitythatcellphoneusecausesbraincancercontinuetobehotlydebated.
Criticssuggestthatthestudiesminimizingtheriskwerepaidforbycellphonemanufacturers.Matt
Hamblen,NewStudyWarnsofCellPhoneDangers,ComputerworldUS,August9,2009,
accessedMarch1,2011,http://news.techworld.com/personaltech/3200539/newstudywarnsof
cellphonedangers.

Productsliabilitycanalsobealifeordeathmatterfromthemanufacturersperspective.In2009,
BloombergBusinessWeekreportedthatthecostsofproductsafetyformanufacturingfirmscanbe
enormous:PeanutCorp.,basedinLynchberg,Va.,hasbeendrivenintobankruptcysincehealth
officialslinkedtaintedpeanutstomorethan600illnessesandninedeaths.Mattelsaidthefirstof
severaltoyrecallsitannouncedin2007cutitsquarterlyoperatingincomeby$30million.Earlierthis
decade,FordMotorspentroughly$3billionreplacing10.6millionpotentiallydefectiveFirestone
tires.MichaelOrey,TakingonToySafety,BusinessWeek,March6,2009,accessedMarch1,2011,
http://www.businessweek.com/managing/content/mar2009/ca2009036_271002.htm.Businesses
complain,withgoodreason,abouttheexpensesassociatedwithproductsliabilityproblems.

CurrentStateoftheLaw
Althoughthedebatehasbeenheatedandattimessimplistic,theproblemofproductsliabilityis
complexandmostofusregarditwithahighdegreeofambivalence.Weareallconsumers,afterall,
whoprofitgreatlyfromlivinginanindustrialsociety.Inthischapter,weexaminethelegaltheoriesthat
underlieproductsliabilitycasesthatdevelopedrapidlyinthetwentiethcenturytoaddressthe
problemsofproductcauseddamagesandinjuriesinanindustrialsociety.

Inthetypicalproductsliabilitycase,threelegaltheoriesareassertedacontracttheoryandtwotort
theories.Thecontracttheoryiswarranty,governedbytheUCC,andthetwotorttheoriesare
negligenceandstrictproductsliability,governedbythecommonlaw.SeeFigure9.1"Major
ProductsLiabilityTheories".

Figure9.1 MajorProductsLiabilityTheories

KEYTAKEAWAY
Asproductsbecameincreasinglysophisticatedandpotentiallydangerousinthetwentiethcentury,
andastheseparationbetweenproductionandconsumptionwidened,productsliabilitybecameavery
importantissueforbothconsumersandmanufacturers.Millionsofpeopleeveryyearareadversely
affectedbydefectiveproducts,andmanufacturersandsellerspayhugeamountsforproductsliability
insuranceanddamages.Thelawhasrespondedwithcausesofactionthatprovideameansfor
recoveryforproductsliabilitydamages.

EXERCISES
1. Howdoestheseparationofproductionfromconsumptionaffectproductsliabilityissues?
2. Whatotherchangesinproductionandconsumptionhavecausedtheneedforthedevelopment
ofproductsliabilitylaw?
3. Howcanitbesaidthatcourtsadjudicatetheallocationofthecostsofaconsumeroriented
economy?

9.2Warranties
LEARNINGOBJECTIVES
1. RecognizeaUCCexpresswarrantyandhowitiscreated.
2. UnderstandwhatismeantundertheUCCbyimpliedwarranties,andknowthemaintypesof
impliedwarranties:merchantability,fitnessforaparticularpurpose,andtitle.
3. Knowthatthereareotherwarranties:againstinfringementandasmayarisefromusageofthe
trade.
4. Seethattherearedifficultieswithwarrantytheoryasacauseofactionforproductsliability;a
federallawhasaddressedsomeofthese.

TheUCCgovernsexpresswarrantiesandvariousimpliedwarranties,andformanyyearsitwastheonly
statutorycontrolontheuseandmeaningsofwarranties.In1975,afteryearsofdebate,Congress
passedandPresidentGeraldFordsignedintolawtheMagnusonMossAct,whichimposescertain
requirementsonmanufacturersandotherswhowarranttheirgoods.WewillexamineboththeUCC
andtheMagnusonMossAct.

TypesofWarranties
ExpressWarranties
Anexpresswarrantyiscreatedwhenevertheselleraffirmsthattheproductwillperforminacertain
manner.Formalwordssuchaswarrantorguaranteearenotnecessary.Asellermaycreatean
expresswarrantyaspartofthebasisforthebargainofsalebymeansof(1)anaffirmationofafactor
promiserelatingtothegoods,(2)adescriptionofthegoods,or(3)asampleormodel.Anyofthesewill
createanexpresswarrantythatthegoodswillconformtothefact,promise,description,sample,or
model.Thusasellerwhostatesthattheuseofrustproofliningsinthecanswouldprevent
discolorationandadulterationofthePerformsolutionhasgivenanexpresswarranty,whetherhe
realizeditornot.RhodesPharmacalCo.v.ContinentalCanCo.,219N.E.2d726(Ill.1976).Claimsof
breachofexpresswarrantyare,atbase,claimsofmisrepresentation.

Butthecourtswillnotholdamanufacturertoeverystatementthatcouldconceivablybeinterpretedto
beanexpresswarranty.Manufacturersandsellersconstantlypufftheirproducts,andthelawis
contenttolettheminhabitthatgrayareawithouthavingtomakegoodoneveryclaim.UCC2313(2)
saysthatanaffirmationmerelyofthevalueofthegoodsorastatementpurportingtobemerelythe
sellersopinionorcommendationofthegoodsdoesnotcreateawarranty.Factsdo.

Itisnotalwayseasy,however,todeterminethelinebetweenanexpresswarrantyandapieceof
puffery.Asalespersonwhosaysthatastrawberryhullerisgreathasprobablypuffed,notwarranted,
whenitturnsoutthatstrawberriesrunthroughthehullerlooklikevictimsofamassacre.Butconsider
theclassiccasesofthedefectiveusedcarandthefaultybull.Intheformer,thesalespersonsaidthecar
wasinA1shapeandmechanicallyperfect.Inthelatter,thesellersaidnotonlythatthebullcalf
wouldputthebuyeronthemapbutthathisfatherwasthegreatestlivingdairybull.Thecar,
carryingthebuyerssevenmontholdchild,brokedownwhilethebuyerwasenroutetovisither
husbandinthearmyduringWorldWarII.Thecourtsaidthatthesalespersonhadmadeanexpress
warranty.WatHenryPontiacCo.v.Bradley,210P.2d348(Okla.1949).Thebullcalfturnedouttobe
sterile,puttingthefarmeronthejudicialratherthanthedairymap.Thecourtsaidthesellersspielwas
tradetalk,notawarrantythatthebullwouldimpregnatecows.Fredericksonv.Hackney,198N.W.

806(Minn.1924).
Isthereanyqualitativedifferencebetweenthesedecisions,otherthanthequartercenturythat
separatesthemandthedifferentcourtsthatrenderedthem?Perhapsthemostthatcanbesaidisthat
themorespecificandmeasurablethestatementsstandards,themorelikelyitisthatacourtwillhold
thesellertoawarranty,andthatawrittenstatementiseasiertoconstrueasawarrantythananoral
one.Itisalsopossiblethatcourtslook,ifonlysubliminally,athowreasonablethebuyerwasinrelying
onthestatement,althoughthisoughtnottobeastricttest.Abuyermaybeunreasonableinexpectinga
cartoget100milestothegallon,butifthatiswhatthesellerpromised,thatoughttobeanenforceable
warranty.

TheCISG(Article35)provides,Thesellermustdelivergoodswhichareofthe
quantity,qualityanddescriptionrequiredbythecontractandwhicharecontainedor
packagedinthemannerrequiredbythecontract.[Andthe]goodsmustpossessthe
qualitiesofgoodswhichthesellerhasheldouttothebuyerasasampleormodel.

ImpliedWarranties
Expresswarrantiesarethoseoverwhichthepartiesdickeredorcouldhave.Expresswarrantiesgoto
theessenceofthebargain.Animpliedwarranty,bycontrast,isonethatcircumstancesalone,not
specificlanguage,compelreadingintothesale.Inshort,animpliedwarrantyisonecreatedbylaw,
actingfromanimpulseofcommonsense.

ImpliedWarrantyofMerchantability
Section2314oftheUCClaysdownthefundamentalrulethatgoodscarryanimpliedwarrantyof
merchantabilityifsoldbyamerchantseller.Whatismerchantability?Section2314(2)oftheUCC
saysthatmerchantablegoodsarethosethatconformatleasttothefollowingsixcharacteristics:

1. Passwithoutobjectioninthetradeunderthecontractdescription
2. Inthecaseoffungiblegoods,areoffairaveragequalitywithinthedescription
3. Arefitfortheordinarypurposesforwhichsuchgoodsareused
4. Run,withinthevariationspermittedbytheagreement,ofevenkind,quality,andquantitywithin
eachunitandamongallunitsinvolved
5. Areadequatelycontained,packaged,andlabeledastheagreementmayrequire
6. Conformtothepromiseoraffirmationsoffactmadeonthecontainerorlabelifany

ForthepurposesofSection2314(2)(c)oftheUCC,sellingandservingfoodordrinkforconsumption
onoroffthepremisesisasalesubjecttotheimpliedwarrantyofmerchantabilitythefoodmustbe
fitfortheordinarypurposestowhichitisput.Theproblemiscommon:youbiteintoacherrypitin
thecherryvanillaicecream,oryouchokeontheclamshellsinthechowder.Issuchfoodfitforthe
ordinarypurposestowhichitisput?Therearetwoschoolsofthought.Oneaskswhetherthefoodwas
naturalasprepared.Thisviewadoptsthesellersperspective.Theotheraskswhattheconsumers
reasonableexpectationwas.

Thefirsttestissometimessaidtobethenaturalforeigntest.Ifthesubstanceinthesoupisnaturalto
thesubstanceasbonesaretofishthenthefoodisfitforconsumption.Thesecondtest,relyingon
reasonableexpectations,tendstobethemorecommonlyusedtest.

TheConventionprovides(Article35)thatunlessotherwiseagreed,thegoodssoldare
fitforthepurposesforwhichgoodsofthesamedescriptionwouldordinarilybeused.

FitnessforaParticularPurpose
Section2315oftheUCCcreatesanotherimpliedwarranty.Wheneveraseller,atthetimeshecontracts
tomakeasale,knowsorhasreasontoknowthatthebuyerisrelyingonthesellersskillorjudgmentto
selectaproductthatissuitablefortheparticularpurposethebuyerhasinmindforthegoodstobe
sold,thereisanimpliedwarrantythatthegoodsarefitforthatpurpose.Forexample,yougotoa
hardwarestoreandtellthesalesclerkthatyouneedapaintthatwilldryovernightbecauseyouare
paintingyourfrontdoorandarainstormispredictedforthenextday.Theclerkgivesyouaslowdrying
oilbasedpaintthattakestwodaystodry.Thestorehasbreachedanimpliedwarrantyoffitness

forparticularpurpose.

Notethedistinctionbetweenparticularandordinarypurposes.Paintismadetocolorandwhendry
toprotectasurface.Thatisitsordinarypurpose,andhadyousaidonlythatyouwishedtobuypaint,no
impliedwarrantyoffitnesswouldhavebeenbreached.Itisonlybecauseyouhadaparticularpurpose
inmindthattheimpliedwarrantyarose.Supposeyouhadfoundacanofpaintinageneralstoreand
toldthesametale,buttheproprietorhadsaid,Idontknowenoughaboutthatpainttotellyou
anythingbeyondwhatsonthelabelhelpyourself.Noteverysellerhastherequisitedegreeofskilland
knowledgeabouteveryproducthesellstogiverisetoanimpliedwarranty.Ultimately,eachcaseturns
onitsparticularcircumstances:TheConventionprovides(Article35):[Thegoodsmustbe]
fitforanyparticularpurposeexpresslyorimpliedlymadeknowntotheselleratthe
timeoftheconclusionofthecontract,exceptwherethecircumstancesshowthatthe
buyerdidnotrely,orthatitwasunreasonableforhimtorely,onthesellersskilland
judgment.

OtherWarranties
Article2containsotherwarrantyprovisions,thoughthesearenotrelatedspecificallytoproducts
liability.Thus,underUCC,Section2312,unlessexplicitlyexcluded,thesellerwarrantsheisconveying
goodtitlethatisrightfullyhisandthatthegoodsaretransferredfreeofanysecurityinterestorother
lienorencumbrance.Insomecases(e.g.,apoliceauctionofbicyclespickeduparoundcampusand
neverclaimed),thebuyershouldknowthatthesellerdoesnotclaimtitleinhimself,northattitlewill
necessarilybegoodagainstathirdparty,andsosubsection(2)excludeswarrantiesinthese
circumstances.Butthecircumstancesmustbesoobviousthatnoreasonablepersonwouldsuppose
otherwise.

InMenzelv.List,anartgallerysoldapaintingbyMarcChagallthatitpurchasedinParis.Menzelv.List,
246N.E.2d742(N.Y.1969).ThepaintinghadbeenstolenbytheGermanswhentheoriginalownerwas
forcedtofleeBelgiuminthe1930s.NowintheUnitedStates,theoriginalownerdiscoveredthatanew
ownerhadthepaintingandsuccessfullysuedforitsreturn.Thecustomerthensuedthegallery,
claimingthatithadbreachedtheimpliedwarrantyoftitlewhenitsoldthepainting.Thecourtagreed
andawardeddamagesequaltotheappreciatedvalueofthepainting.Agoodfaithpurchaserwhomust
surrenderstolengoodstotheirtrueownerhasaclaimforbreachoftheimpliedwarrantyoftitle
againstthepersonfromwhomheboughtthegoods.

Asecondimpliedwarranty,relatedtotitle,isthatthemerchantsellerwarrantsthegoodsarefreeof
anyrightfulclaimbyathirdpersonthatthesellerhasinfringedhisrights(e.g.,thatagalleryhasnot
infringedacopyrightbysellingareproduction).Thisprovisiononlyappliestoasellerwhoregularly
dealsingoodsofthekindinquestion.Ifyoufindanoldprintinyourgrandmothersattic,youdonot
warrantwhenyousellittoaneighborthatitisfreeofanyvalidinfringementclaims.

Athirdimpliedwarrantyinthiscontextinvolvesthecourseofdealingorusageoftrade.Section2
314(3)oftheUCCsaysthatunlessmodifiedorexcludedimpliedwarrantiesmayarisefromacourseof
dealingorusageoftrade.Ifacertainwayofdoingbusinessisunderstood,itisnotnecessaryforthe
sellertostateexplicitlythathewillabidebythecustomitwillbeimplied.Atypicalexampleisthe
obligationofadogdealertoprovidepedigreepaperstoprovethedogslineageconformstothe
contract.

ProblemswithWarrantyTheory
InGeneral
Itmayseemthatapersonassertingaclaimforbreachofwarrantywillhaveagoodchanceofsuccess
underanexpresswarrantyorimpliedwarrantytheoryofmerchantabilityorfitnessforaparticular
purpose.Inpractice,though,claimantsareinmanycasesdeniedrecovery.Herearefourgeneral
problems:

Theclaimantmustprovethattherewasasale.
Thesalewasofgoodsratherthanrealestateorservices.
TheactionmustbebroughtwithinthefouryearstatuteoflimitationsunderArticle2725,when
thetenderofdeliveryismade,notwhentheplaintiffdiscoversthedefect.

UnderUCC,Section2607(3)(a)andSection2A516(3)(a),whichcoversleases,theclaimantwho
failstogivenoticeofbreachwithinareasonabletimeofhavingacceptedthegoodswillseethesuit
dismissed,andfewconsumersknowenoughtodoso,exceptwhenmakingacomplaintabouta
purchaseofspoiledmilkoraboutpaintthatwouldntdry.

Inadditiontothesegeneralproblems,theclaimantfacesadditionaldifficultiesstemmingdirectlyfrom
warrantytheory,whichwetakeuplaterinthischapter.

ExclusionorModificationofWarranties
TheUCCpermitssellerstoexcludeordisclaimwarrantiesinwholeorinpart.Thatsreasonable,given
thatthediscussionhereisaboutcontract,andpartiesarefreetomakesuchcontractsastheyseefit.But
anumberofdifficultiescanarise.

ExclusionofExpressWarranties
Thesimplestwayforthesellertoexcludeexpresswarrantiesisnottogivethem.Tobesure,Section2
316(1)oftheUCCforbidscourtsfromgivingoperationtowordsinfineprintthatnegateorlimit
expresswarrantiesifdoingsowouldunreasonablyconflictwithexpresswarrantiesstatedinthemain
bodyofthecontractas,forexample,wouldablanketstatementthatthiscontractexcludesall
warrantiesexpressorimplied.ThepurposeoftheUCCprovisionistopreventcustomersfrombeing
surprisedbyunbargainedforlanguage.

ExclusionofImpliedWarrantiesinGeneral
Impliedwarrantiescanbeexcludedeasilyenoughalso,bydescribingtheproductwithlanguagesuchas
asisorwithallfaults.Norisexclusionsimplyafunctionofwhatthesellersays.Thebuyerwhohas
eitherexaminedorrefusedtoexaminethegoodsbeforeenteringintothecontractmaynotassertan
impliedwarrantyconcerningdefectsaninspectionwouldhaverevealed.

TheConventionprovidesasimilarruleregardingabuyersrightswhenhehasfailedto
inspectthegoods(Article35):Thesellerisnotliableforanylackofconformityof
thegoodsifatthetimeoftheconclusionofthecontractthebuyerkneworcouldnot
havebeenunawareofsuchlackofconformity.

ImpliedWarrantyofMerchantability
Section2316(2)oftheUCCpermitsthesellertodisclaimormodifytheimpliedwarrantyof
merchantability,aslongasthestatementactuallymentionsmerchantabilityand,ifitiswritten,is
conspicuous.Notethatthedisclaimerneednotbeinwriting,andagainallimpliedwarrantiescan
beexcludedasnoted.

ImpliedWarrantyofFitness
Section2316(2)oftheUCCpermitstheselleralsotodisclaimormodifyanimpliedwarrantyof
fitness.Thisdisclaimerormodificationmustbeinwriting,however,andmustbeconspicuous.Itneed
notmentionfitnessexplicitlygenerallanguagewilldo.Thefollowingsentence,forexample,is
sufficienttoexcludeallimpliedwarrantiesoffitness:Therearenowarrantiesthatextendbeyondthe
descriptiononthefaceofthiscontract.

HereisastandarddisclaimerclausefoundinaDowChemicalCompanyagreement:Sellerwarrants
thatthegoodssuppliedhereshallconformtothedescriptionstatedonthefrontsidehereof,thatitwill
conveygoodtitle,andthatsuchgoodsshallbedeliveredfreefromanylawfulsecurityinterest,lien,or
encumbrance.SELLERMAKESNOWARRANTYOFMERCHANTABILITYORFITNESSFORA
PARTICULARUSE.NORISTHEREANYOTHEREXPRESSORIMPLIEDWARRANTY.

ConflictbetweenExpressandImpliedWarranties
Expressandimpliedwarrantiesandtheirexclusionorlimitationcanoftenconflict.Section2317ofthe
UCCprovidescertainrulesfordecidingwhichshouldprevail.Ingeneral,allwarrantiesaretobe
construedasconsistentwitheachotherandascumulative.Whenthatassumptionisunreasonable,the

partiesintentiongovernstheinterpretation,accordingtothefollowingrules:(a)exactortechnical
specificationsdisplaceaninconsistentsampleormodelorgenerallanguageofdescription(b)asample
fromanexistingbulkdisplacesinconsistentgenerallanguageofdescription(c)expresswarranties
displaceinconsistentimpliedwarrantiesotherthananimpliedwarrantyoffitnessforaparticular
purpose.Anyinconsistencyamongwarrantiesmustalwaysberesolvedinfavoroftheimpliedwarranty
offitnessforaparticularpurpose.Thisdoesntmeanthatwarrantycannotbelimitedorexcluded
altogether.Thepartiesmaydoso.Butincasesofdoubtwhetheritorsomeotherlanguageapplies,the
impliedwarrantyoffitnesswillhaveasuperiorclaim.

TheMagnusonMossActandPhantomWarranties
Afteryearsofdebateoverextendingfederallawtoregulatewarranties,Congressenactedthe
MagnusonMossFederalTradeCommissionWarrantyImprovementAct(morecommonlyreferredto
astheMagnusonMossAct)andPresidentFordsigneditin1975.Theactwasdesignedtoclearup
confusingandmisleadingwarranties,whereasSenatorMagnusonputitinintroducingthebill
purchasersofconsumerproductsdiscoverthattheirwarrantymaycovera25centpartbutnotthe
$100laborchargeorthatthereisfullcoverageonapianosolongasitisshippedatthepurchasers
expensetothefactory.Thereisagrowingneedtogenerateconsumerunderstandingbyclearlyand
conspicuouslydisclosingthetermsandconditionsofthewarrantyandbytellingtheconsumerwhatto
doifhisguaranteedproductbecomesdefectiveormalfunctions.TheMagnusonMossActonlyapplies
toconsumerproducts(forhouseholdanddomesticuses)commercialpurchasersarepresumedtobe
knowledgeableenoughnottoneedtheseprotections,tobeabletohirelawyers,andtobeableto
includethecostofproductfailuresintothepricestheycharge.

Theacthasseveralprovisionstomeettheseconsumerconcernsitregulatesthecontentofwarranties
andthemeansofdisclosingthosecontents.TheactgivestheFederalTradeCommission(FTC)the
authoritytopromulgatedetailedregulationstointerpretandenforceit.UnderFTCregulations,any
writtenwarrantyforaproductcostingaconsumermorethantendollarsmustdiscloseinasingle
documentandinreadilyunderstandablelanguagethefollowingnineitemsofinformation:

1. Theidentityofthepersonscoveredbythewarranty,whetheritislimitedtotheoriginalpurchaser
orfewerthanallwhomightcometoownitduringthewarrantyperiod.
2. Acleardescriptionoftheproducts,parts,characteristics,components,orpropertiescovered,and
wherenecessaryforclarity,adescriptionofwhatisexcluded.
3. Astatementofwhatthewarrantorwilldoiftheproductfailstoconformtothewarranty,including
itemsorservicesthewarrantywillpayforand,ifnecessaryforclarity,whatitwillnotpayfor.
4. Astatementofwhenthewarrantyperiodstartsandwhenitexpires.
5. Astepbystepexplanationofwhattheconsumermustdotorealizeonthewarranty,includingthe
namesandaddressesofthosetowhomtheproductmustbebrought.
6. Instructionsonhowtheconsumercanbeavailedofanyinformaldisputeresolutionmechanism
establishedbythewarranty.
7. Anylimitationsonthedurationofimpliedwarrantiessincesomestatesdonotpermitsuch
limitations,thewarrantymustcontainastatementthatanylimitationsmaynotapplytothe
particularconsumer.
8. Anylimitationsorexclusionsonrelief,suchasconsequentialdamagesasabove,thewarranty
mustexplainthatsomestatesdonotallowsuchlimitations.
9. Thefollowingstatement:Thiswarrantygivesyouspecificlegalrights,andyoumayalsohaveother
rightswhichvaryfromstatetostate.

Inadditiontotheserequirements,theactrequiresthatthewarrantybelabeledeitherafullorlimited
warranty.Afullwarrantymeans(1)thedefectiveproductorpartwillbefixedorreplacedforfree,
includingremovalandreinstallation(2)itwillbefixedwithinareasonabletime(3)theconsumerneed
notdoanythingunreasonable(likeshippingthepianotothefactory)togetwarrantyservice(4)the
warrantyisgoodforanyonewhoownstheproductduringtheperiodofthewarranty(5)theconsumer
getsmoneybackoranewproductiftheitemcannotbefixedwithinareasonablenumberofattempts.
Butthefullwarrantymaynotcoverthewholeproduct:itmaycoveronlytheharddriveinthe
computer,forexampleitmuststatewhatpartsareincludedandexcluded.Alimitedwarrantyisless
inclusive.Itmaycoveronlyparts,notlaboritmayrequiretheconsumertobringtheproducttothe
storeforserviceitmayimposeahandlingchargeitmaycoveronlythefirstpurchaser.Bothfulland
limitedwarrantiesmayexcludeconsequentialdamages.

DisclosureofthewarrantyprovisionspriortosaleisrequiredbyFTCregulationsthiscanbedoneina
numberofways.Thetextofthewarrantycanbeattachedtotheproductorplacedincloseconjunction
toit.Itcanbemaintainedinabinderkeptineachdepartmentorotherwiseeasilyaccessibletothe
consumer.Eitherthebindersmustbeinplainsightorsignsmustbepostedtocalltheprospective
buyersattentiontothem.Anoticecontainingthetextofthewarrantycanbeposted,orthewarranty
itselfcanbeprintedontheproductspackageorcontainer.

PhantomwarrantiesareaddressedbytheMagnusonMossAct.Aswehaveseen,theUCCpermitsthe
sellertodisclaimimpliedwarranties.Thisauthorityoftenledsellerstogivewhatwerecalledphantom
warrantiesthatis,theexpresswarrantycontaineddisclaimersofimpliedwarranties,thusleavingthe
consumerwithfewerrightsthanifnoexpresswarrantyhadbeengivenatall.Inthewordsofthe
legislativereportoftheact,Theboldprintgiveth,andthefineprinttakethaway.Theactabolished
thesephantomwarrantiesbyprovidingthatifthesellergivesawrittenwarranty,whetherexpressor
implied,hecannotdisclaimormodifyimpliedwarranties.However,asellerwhogivesalimited
warrantycanlimitimpliedwarrantiestothedurationofthelimitedwarranty,ifthedurationis
reasonable.

Aseller
sabilitytodisclaimimpliedwarrantiesisalsolimitedbystatelawintwoways.First,by
amendmenttotheUCCorbyseparatelegislation,somestatesprohibitdisclaimerswhenever
consumerproductsaresold.AnumberofstateshavespeciallawsthatlimittheuseoftheUCCimplied
warrantydisclaimerrulesinconsumersales.SomeoftheseappearinamendmentstotheUCCand
othersareinseparatestatutes.Thebroadestapproachisthatoftheninestatesthatprohibitthe
disclaimerofimpliedwarrantiesinconsumersales(Massachusetts,Connecticut,Maine,Vermont,
Maryland,theDistrictofColumbia,WestVirginia,Kansas,Mississippi,and,withrespecttopersonal
injuriesonly,Alabama).Thereisadifferenceinthesestateswhethertherulesapplytomanufacturers
aswellasretailers.Second,theUCCat2302providesthatunconscionablecontractsorclauseswillnot
beenforced.UCC2719(3)providesthatlimitationofdamagesforpersonalinjuryinthesaleof
consumergoodsisprimafacieunconscionable,butlimitationofdamageswherethelossiscommercial

isnot.

Afirstproblemwithwarrantytheory,then,isthatitspossibletodisclaimorlimitthewarranty.The
worstabusesofmanipulativeandtrickywarrantiesareeliminatedbytheMagnusonMossAct,but
thereareseveralotherreasonsthatwarrantytheoryisnotthepanaceaforclaimantswhohavesuffered
damagesorinjuriesasaresultofdefectiveproducts.

Privity
Asecondproblemwithwarrantylaw(afterexclusionandmodificationofwarranties)isthatofprivity.
Privityisthelegaltermforthedirectconnectionbetweenthesellerandbuyer,thetwocontracting
parties.Fordecades,thedoctrineofprivityhasheldthatonepersoncansueanotheronlyiftheyarein
privity.Thatworkedwellinthedayswhenmostcommercewaslocalandtheconnectionbetweenseller
andbuyerwasimmediate.Butinamodernindustrial(orpostindustrial)economy,theproductis
transportedthroughamuchlargerdistributionsystem,asdepictedinFigure9.2"Chainof
Distribution".Twoquestionsarise:(1)Isthemanufacturerorwholesaler(asopposedtotheretailer)
liabletothebuyerunderwarrantytheory?and(2)Maythebuyersfamilyorfriendsassertwarranty
rights?

Figure9.2 ChainofDistribution

HorizontalPrivity
SupposeCarlConsumerbuysanewlampforhisfamilyslivingroom.Thelampisdefective:Carlgetsa
seriouselectricalshockwhenheturnsiton.CertainlyCarlwouldbecoveredbytheimpliedwarrantyof
merchantability:hesindirectprivitywiththeseller.ButwhatifCarlsspouseCarleneisinjured?She
didntbuythelampisshecovered?OrsupposeCarlsfriendDavid,visitingforanafternoon,gets
zapped.IsDavidcovered?Thisgetstohorizontalprivity,noncontractingpartieswhosuffer
damagesfromdefectivegoods,suchasnonbuyerusers,consumers,andbystanders.Horizontalprivity
determinestowhosebenefitthewarrantyflowswhocansueforitsbreach.Inoneofitsrare
instancesofnonuniformity,theUCCdoesnotdictatetheresult.Itgivesthestatesthreechoices,labeled
inSection2318asAlternativesA,B,andC.

AlternativeAsaysthatasellerswarrantyextendstoanynaturalpersonwhoisinthefamilyor
householdofhisbuyerorwhoisaguestinhishomeprovided(1)itisreasonabletoexpecttheperson
sufferingdamagestouse,consume,orbeaffectedbythegoodsand(2)thewarrantyextendsonlyto
damagesforpersonalinjury.

AlternativeBextendstoanynaturalpersonwhomayreasonablybeexpectedtouse,consume,orbe
affectedbythegoods,andwhoisinjuredinpersonbybreachofthewarranty.Itislessrestrictivethan
thefirstalternative:itextendsprotectiontopeoplebeyondthoseinthebuyershome.Forexample,
whatifCarltookthelamptoaneighborshousetoilluminateapokertable:underAlternativeB,
anybodyattheneighborshousewhosufferedinjurywouldbecoveredbythewarranty.Butthis
alternativedoesnotextendprotectiontoorganizationsnaturalpersonmeansahumanbeing.

AlternativeCisthesameasBexceptthatitappliesnotonlytoanynaturalpersonbuttoanyperson
whoisinjuredbybreachofthewarranty.Thisisthemostfarreachingalternativebecauseitprovides
redressfordamagetopropertyaswellasforpersonalinjury,anditextendsprotectiontocorporations
andotherinstitutionalbuyers.

Onemayincidentallynotethathavingthreedifferentalternativesforwhenthirdpartynonpurchasers
cansueasellerormanufacturerforbreachofwarrantygivesrisetounintendedconsequences.First,
differentoutcomesareproducedamongjurisdictions,includingvariationsinthecommonlaw.Second,
thegreatpurposeoftheUniformCommercialCodeinpromotingnationaluniformityisundermined.
Third,battlesoverchoiceoflawwheretofilethelawsuitaregenerated.

UCC,Section2A216,providesbasicallythesamealternativesasapplicabletotheleasingofgoods.

VerticalPrivity
Thetraditionalrulewasthatremotesellingpartieswerenotliable:lackofprivitywasadefensebythe
manufacturerorwholesalertoasuitbyabuyerwithwhomtheseentitiesdidnotthemselvescontract.
Thebuyercouldrecoverdamagesfromtheretailerbutnotfromtheoriginalmanufacturer,whoafter
allmadetheproductandwhomightbemuchmorefinanciallyabletohonorthewarranty.TheUCC
takesnopositionhere,butoverthelastfiftyyearsthejudicialtrendhasbeentoabolishthisvertical
privityrequirement.(SeeFigure9.2"ChainofDistribution"theentitiesinthedistributionchainare
thoseinverticalprivitytothebuyer.)Itbeganin1958,whentheMichiganSupremeCourtoverturned

theoldtheoryinanopinionwrittenbyJusticeJohnD.Voelker(whoalsowrotethenovelAnatomyofa
Murder,underthepennameRobertTraver).Spencev.ThreeRiversBuilders&MasonrySupply,Inc.,
90N.W.2d873(Mich.1958).

ContributoryNegligence,ComparativeNegligence,andAssumptionofRisk
Afterdisclaimersandprivityissuesareresolved,otherpossibleimpedimentsfacingtheplaintiffina
productsliabilitywarrantycaseareissuesofassumptionoftherisk,contributorynegligence,and
comparativenegligence(discussedinChapter7"IntroductiontoTortLaw"ontorts).

Courtsuniformlyholdthatassumptionofriskisadefenseforsellersagainstaclaimofbreachof
warranty,whilethereisasplitofauthorityoverwhethercomparativeandcontributorynegligenceare
defenses.However,thecourtsuseofthisterminologyisoftenconflictingandconfusing.Theultimate
questionisreallyoneofcausation:wasthesellersbreachofthewarrantythecauseoftheplaintiffs
damages?

TheUCCisnotmarkedlyhelpfulinclearingawaytheconfusioncausedbyyearsofdiscussionof
assumptionofriskandcontributorynegligence.Section2715(2)(b)oftheUCCsaysthatamongthe
formsofconsequentialdamageforwhichrecoverycanbesoughtisinjurytopersonorproperty
proximatelyresultingfromanybreachofwarranty(emphasisadded).Butproximatelyisa
troublesomeword.Indeed,ultimatelyitisacircularword:itmeansnothingmorethanthatthe
defendantmusthavebeenadirectenoughcauseofthedamagesthatthecourtswillimposeliability.
Comment5tothissectionsays,Wheretheinjuryinvolvedfollowstheuseofgoodswithoutdiscovery
ofthedefectcausingthedamage,thequestionofproximateturnsonwhetheritwasreasonableforthe
buyertousethegoodswithoutsuchinspectionaswouldhaverevealedthedefects.Ifitwasnot
reasonableforhimtodoso,orifhedidinfactdiscoverthedefectpriortohisuse,theinjurywouldnot
proximatelyresultfromthebreachofwarranty.

Obviouslyifaskydiverbuysaparachuteandthendiscoversafewholesinit,hisfamilywouldnotlikely
prevailincourtwhentheysuedtorecoverforhisdeathbecausetheparachutefailedtofunctionafterhe
jumpedat5,000feet.Butthegeneralnotionthatitmusthavebeenreasonableforabuyertousegoods
withoutinspectioncanmakeawarrantycasedifficulttoprove.

KEYTAKEAWAY
Afirstbasisofrecoveryinproductsliabilitytheoryisbreachofwarranty.Therearetwotypesof
warranties:expressandimplied.Undertheimpliedcategoryarethreemajorsubtypes:theimplied
warrantyofmerchantability(onlygivenbymerchants),theimpliedwarrantyoffitnessforaparticular
purpose,andtheimpliedwarrantyoftitle.Thereareanumberofproblemswiththeuseofwarranty
theory:theremusthavebeenasaleofthegoods;theplaintiffmustbringtheactionwithinthestatute
oflimitations;andtheplaintiffmustnotifythesellerwithinareasonabletime.Thesellermaywithin
theconstraintsoftheMagnusonMossActlimitorexcludeexpresswarrantiesorlimitorexclude
impliedwarranties.Privity,orlackofit,betweenbuyerandsellerhasbeensignificantlyerodedasa
limitationinwarrantytheory,butlackofprivitymaystillaffecttheplaintiffsrecovery;theplaintiffs
assumptionoftheriskinusingdefectivegoodsmayprecluderecovery.

EXERCISES
1. Whatarethetwomaintypesofwarrantiesandtheimportantsubtypes?
2. Whocanmakeeachtypeofwarranty?
3. Whatgeneralproblemsdoesaplaintiffhaveinbringingaproductsliabilitywarrantycase?
4. Whatproblemsarepresentedconcerningexclusionormanipulativeexpresswarranties,andhow
doestheMagnusonMossActaddressthem?
5. Howareimpliedwarrantiesexcluded?
6. Whatistheproblemoflackofprivity,andhowdoesmodernlawdealwithit?

9.3Negligence

LEARNINGOBJECTIVES
1. Recognizehowthetorttheoryofnegligencemaybeofuseinproductsliabilitysuits.
2. Understandwhynegligenceisoftennotasatisfactorycauseofactioninsuchsuits:proofofitmay
bedifficult,andtherearepowerfuldefensestoclaimsofnegligence.

Negligenceisthesecondtheoryraisedinthetypicalproductsliabilitycase.Itisatorttheory(as
comparedtobreachofwarranty,whichisofcourseacontracttheory),anditdoeshavethisadvantage
overwarrantytheory:privityisneverrelevant.Apedestrianisstruckinanintersectionbyacarwhose
brakesweredefectivelymanufactured.Undernocircumstanceswouldbreachofwarrantybeauseful
causeofactionforthepedestrianthereisnoprivityatall.Negligenceisconsideredindetailinthe
Chapter7"IntroductiontoTortLaw"ontortsitbasicallymeanslackofduecare.

TypicalNegligenceClaims:DesignDefectsandInadequateWarnings
Negligencetheoryinproductsliabilityismostusefulintwotypesofcases:defectivedesignand
defectivewarnings.

DesignDefects
Manufacturerscanbe,andoftenare,heldliableforinjuriescausedbyproductsthatweredefectively
designed.Thequestioniswhetherthedesignerusedreasonablecareindesigningaproductreasonably
safeforitsforeseeableuse.Theconcernoverreasonablenessandstandardsofcareareelementsof
negligencetheory.

Defectivedesigncasescanposesevereproblemsformanufacturingandsafetyengineers.Moresafety
meansmorecost.Designsalteredtoimprovesafetymayimpairfunctionalityandmaketheproduct
lessdesirabletoconsumers.Atwhatpointsafetycomesintoreasonablebalancewithperformance,
cost,anddesirability(seeFigure9.3"TheReasonableDesignBalance")isimpossibletoforecast
accurately,thoughsomefactorscanbetakenintoaccount.Forexample,ifothermanufacturersare
marketingcomparableproductswhosedesignareintrinsicallysafer,thelesssafeproductsarelikelyto
loseatestofreasonablenessincourt.

Figure9.3 TheReasonableDesignBalance

WarningDefects
Wenotedthataproductmaybedefectiveifthemanufacturerfailedtowarntheuserofpotential
dangers.Whetherawarningshouldhavebeenaffixedisoftenaquestionofwhatisreasonably
foreseeable,andthefailuretoaffixawarningwillbetreatedasnegligence.Themanufacturerofaweed
killerwithpoisonousingredientsiscertainlyactingnegligentlywhenitfailstowarntheconsumerthat
thecontentsarepotentiallylethal.

Thelawgoverningthenecessitytowarnandtheadequacyofwarningsiscomplex.Whatisreasonable
turnsonthedegreetowhichaproductislikelytobemisusedand,asthedisturbingLaapericase
(Section9.6.3"FailuretoWarn")illustrates,whetherthehazardisobvious.

ProblemswithNegligenceTheory
Negligenceisanancientcauseofactionand,aswasdiscussedinthetortschapter,itcarrieswithita
numberofwelldevelopeddefenses.Twocategoriesmaybementioned:commonlawdefensesand
preemption.

CommonLawDefensesagainstNegligence

Amongtheproblemsconfrontingaplaintiffwithaclaimofnegligenceinproductsliabilitysuits(again,
theseconceptsarediscussedinthetortschapter)arethefollowing:

Provingnegligenceatall:justbecauseaproductisdefectivedoesnotnecessarilyprovethe
manufacturerbreachedadutyofcare.
Proximatecause:eveniftherewassomenegligence,theplaintiffmustproveherdamagesflowed
proximatelyfromthatnegligence.
Contributoryandcomparativenegligence:theplaintiffsownactionscontributedtothedamages.
Subsequentalterationoftheproduct:generallythemanufacturerwillnotbeliableiftheproduct
hasbeenchanged.
Misuseorabuseoftheproduct:usingalawnmowertotrimahedgeortakingtoomuchofadrug
areexamples.
Assumptionoftherisk:knowinglyusingtheproductinariskyway.

Preemption
Preemption(orpreemption)isillustratedbythisproblem:supposethereisafederalstandard
concerningtheproduct,andthedefendantmanufacturermeetsit,butthestandardisnotreallyvery
protective.(Itisnotuncommon,ofcourse,forfederalstandardmakersofalltypestobesignificantly
influencedbylobbyistsfortheindustriesbeingregulatedbythestandards.)Isitenoughforthe
manufacturertopointtoitssatisfactionofthestandardsothatsuchsatisfactionpreempts(takesover)
anycommonlawnegligenceclaim?Webuiltthemachinetofederalstandards:wecantbeliable.Our
compliancewiththefederalsafetystandardisanaffirmativedefense.

Preemptionistypicallyraisedasadefenseinsuitsabout(1)cigarettes,(2)FDAapprovedmedical
devices,(3)motorboatpropellers,(4)pesticides,and(5)motorvehicles.Thisisacomplexareaoflaw.
Questionsinevitablyariseastowhethertherewasfederalpreemption,expressorimplied.Sometimes
courtsfindpreemptionandtheconsumerlosessometimesthecourtsdontfindpreemptionandthe
casegoesforward.Accordingtoonelawyerwhoworksinthisfield,therehasbeenincreasingpressure
onboththeregulatoryandcongressionalfrontstopreemptstatelaws.Thatis,theusualdefendants
(manufacturers)pushCongressandtheregulatoryagenciestostateexplicitlyinthelawthatthefederal
standardspreemptanddefeatstatelaw.C.RichardNewsomeandAndrewF.Knopf,Federal
Preemption:ProductsLawyersBeware,FloridaJusticeAssociationJournal,July27,2007,accessed
March1,2011,http://www.newsomelaw.com/resources/articles/federalpreemptionproducts
lawyersbeware.

KEYTAKEAWAY
Negligenceisasecondpossiblecauseofactionforproductsliabilityclaimants.Amainadvantageis
thatnoissuesofprivityarerelevant,butthereareoftenproblemsofproof;thereareanumberof
robustcommonlawdefenses,andfederalpreemptionisarecurringconcernforplaintiffslawyers.

EXERCISES
1. Whattwotypesofproductsliabilitycasesaremostoftenbroughtundernegligence?
2. Howcoulditbesaidthatmerelybecauseapersonsuffersinjuryastheresultofadefective
product,proofofnegligenceisnotnecessarilymade?
3. Whatispreemptionandhowisitusedasaswordtodefeatproductsliabilityplaintiffs?

9.4StrictLiabilityinTort
LEARNINGOBJECTIVES
1. Knowwhatstrictproductsliabilitymeansandhowitdiffersfromtheothertwoproducts
liabilitytheories.
2. Understandthebasicrequirementstoprovestrictproductsliability.
3. Seewhatobstaclestorecoveryremainwiththisdoctrine.

ThewarrantiesgroundedintheUniformCommercialCode(UCC)areoftenineffectiveinassuring
recoveryforaplaintiffsinjuries.Thenoticerequirementsandtheabilityofasellertodisclaimthe
warrantiesremainbothersomeproblems,asdoestheprivityrequirementinthosestatesthatcontinue
toadheretoit.

Negligenceasaproductsliabilitytheoryobviatesanyprivityproblems,butnegligencecomeswitha
numberoffamiliardefensesandwiththeproblemsofpreemption.

Toovercometheobstacles,judgeshavegonebeyondthecommercialstatutesandtheancientconcepts
ofnegligence.Theyhavefashionedatorttheoryofproductsliabilitybasedontheprincipleofstrict
productsliability.Onecourtexpressedtherationaleforthedevelopmentoftheconceptasfollows:
Theruleofstrictliabilityfordefectiveproductsisanexampleofnecessarypaternalismjudicially
shiftingriskoflossbyapplicationoftortdoctrinebecause[theUCC]schemefailstoadequatelycover
thesituation.Judicialpaternalismistolossshiftingwhatgarlicistoastewsometimesnecessaryto
givefullflavortostatutorylaw,alwaysdistinctlynoticeableinitsresult,overwhelmingly
counterproductiveifexcessive,andneveranendinitself.KaiserSteelCorp.v.WestinghouseElectric
Corp.,127Cal.Rptr.838(Cal.1976).Paternalismornot,strictliabilityhasbecomeaveryimportant
legaltheoryinproductsliabilitycases.

StrictLiabilityDefined
TheformulationofstrictliabilitythatmostcourtsuseisSection402AoftheRestatementofTorts
(Second),setouthereinfull:

(1)Onewhosellsanyproductinadefectiveconditionunreasonablydangeroustotheuserorconsumer
ortohispropertyissubjecttoliabilityforphysicalharmtherebycausedtotheultimateuseror
consumer,ortohisproperty,if

(a)thesellerisengagedinthebusinessofsellingsuchaproduct,and

(b)itisexpectedtoanddoesreachtheuserorconsumerwithoutsubstantialchangeintheconditionin
whichitissold.

(2)Thisruleapplieseventhough

(a)thesellerhasexercisedallpossiblecareinthepreparationandsaleofhisproduct,and

(b)theuserorconsumerhasnotboughttheproductfromorenteredintoanycontractualrelationwith
theseller.

Section402AoftheRestatementavoidsthewarrantyboobytraps.Itstatesaruleoflawnotgoverned
bytheUCC,solimitationsandexclusionsinwarrantieswillnotapplytoasuitbasedonthe
Restatementtheory.Andtheconsumerisundernoobligationtogivenoticetothesellerwithina
reasonabletimeofanyinjuries.PrivityisnotarequirementthelanguageoftheRestatementsaysit
appliestotheuserorconsumer,butcourtshavereadilyfoundthatbystandersinvarioussituations
areentitledtobringactionsunderRestatement,Section402A.Theformulationofstrictliability,
though,islimitedtophysicalharm.Manycourtshaveheldthatapersonwhosufferseconomicloss
mustresorttowarrantylaw.

Strictliabilityavoidssomenegligencetraps,too.Noproofofnegligenceisrequired.SeeFigure9.4
"MajorDifferencebetweenWarrantyandStrictLiability".

Figure9.4 MajorDifferencebetweenWarrantyandStrictLiability

Section402AElements
ProductinaDefectiveCondition
SalesofgoodsbutnotsalesofservicesarecoveredundertheRestatement,Section402A.
Furthermore,theplaintiffwillnotprevailiftheproductwassafefornormalhandlingandconsumption
whensold.Aglasssodabottlethatisproperlycappedisnotinadefectiveconditionmerelybecauseit
canbebrokeniftheconsumershouldhappentodropit,makingthejaggedglassdangerous.Chocolate
candybarsarenotdefectivemerelybecauseyoucanbecomeillbyeatingtoomanyofthematonce.On
theotherhand,asellerwouldbeliableforaproductdefectivelypackaged,sothatitcouldexplodeor
deteriorateandchangeitschemicalcomposition.Aproductcanalsobeinadefectiveconditionifthere
isdangerthatcouldcomefromananticipatedwrongfuluse,suchasadrugthatissafeonlywhentaken
inlimiteddoses.Underthosecircumstances,failuretoplaceanadequatedosagewarningonthe
containermakestheproductdefective.

Theplaintiffbearstheburdenofprovingthattheproductisinadefectivecondition,andthisburden
canbedifficulttomeet.Manyproductsaretheresultofcomplexfeatsofengineering.Expertwitnesses
arenecessarytoprovethattheproductsweredefectivelymanufactured,andthesearenotalwayseasy
tocomeby.Thisdifficultyofproofisonereasonwhymanycasesraisethefailuretowarnasthe
dispositiveissue,sinceintherightcasethatissueisfareasiertoprove.TheAndersoncase(detailedin
theexercisesattheendofthischapter)demonstratesthattheplaintiffcannotprevailunderstrict
liabilitymerelybecausehewasinjured.Itisnotthefactofinjurythatisdispositivebutthedefective
conditionoftheproduct.

UnreasonablyDangerous
Theproductmustbenotmerelydangerousbutunreasonablydangerous.Mostproductshave
characteristicsthatmakethemdangerousincertaincircumstances.AstheRestatementcommentators
note,Goodwhiskeyisnotunreasonablydangerousmerelybecauseitwillmakesomepeopledrunk,
andisespeciallydangeroustoalcoholicsbutbadwhiskey,containingadangerousamountoffueloil,is
unreasonablydangerous.Goodbutterisnotunreasonablydangerousmerelybecause,ifsuchbethe
case,itdepositscholesterolinthearteriesandleadstoheartattacksbutbadbutter,contaminatedwith
poisonousfishoil,isunreasonablydangerous.Restatement(Second)ofContracts,Section402A(i).
UnderSection402A,thearticlesoldmustbedangeroustoanextentbeyondthatwhichwouldbe
contemplatedbytheordinaryconsumerwhopurchasesit,withtheordinaryknowledgecommontothe
communityastoitscharacteristics.

Evenhighrisksofdangerarenotnecessarilyunreasonable.Someproductsareunavoidablyunsafe
rabiesvaccines,forexample,cancausedreadfulsideeffects.Butthediseaseitself,almostalwaysfatal,
isworse.Aproductisunavoidablyunsafewhenitcannotbemadesafeforitsintendedpurposegiven
thepresentstateofhumanknowledge.Becauseimportantbenefitsmayflowfromtheproductsuse,its
producerorselleroughtnottobeheldliableforitsdanger.

However,thefailuretowarnapotentialuserofpossiblehazardscanmakeaproductdefectiveunder
Restatement,Section402A,whetherunreasonablydangerousorevenunavoidablyunsafe.Thedairy
farmerneednotwarnthosewithcommonallergiestoeggs,becauseitwillbepresumedthattheperson
withanallergicreactiontocommonfoodstuffswillbeawareofthem.Butwhentheproductcontainsan
ingredientthatcouldcausetoxiceffectsinasubstantialnumberofpeopleanditsdangerisnotwidely
known(orifknown,isnotaningredientthatwouldcommonlybesupposedtobeintheproduct),the
lackofawarningcouldmaketheproductunreasonablydangerouswithinthemeaningofRestatement,
Section402A.Manyofthesuitsbroughtbyasbestosworkerschargedexactlythispoint
Theutilityof
aninsulationproductcontainingasbestosmayoutweightheknownorforeseeablerisktotheinsulation
workersandthusjustifyitsmarketing.Theproductcouldstillbeunreasonablydangerous,however,if
unaccompaniedbyadequatewarnings.Aninsulationworker,nolessthananyotherproductuser,hasa
righttodecidewhethertoexposehimselftotherisk.
Borelv.FibreboardPaperProductsCorp.,493
F.Zd1076(5thCir.1973).ThisruleoflawcametohaunttheManvilleCorporation:itwassoburdened
withlawsuits,broughtandlikelytobebroughtforitssaleofasbestos
aknowncarcinogen
thatit
declaredChapter11bankruptcyin1982andshuckeditsliability.InreJohnsManvilleCorp.,36R.R.
727(So.Dist.N.Y.1984).

EngagedintheBusinessofSelling

Restatement,Section402A(1)(a),limitsliabilitytosellersengagedinthebusinessofsellingsucha
product.Theruleisintendedtoapplytopeopleandentitiesengagedinbusiness,nottocasualone
timesellers.Thebusinessneednotbesolelyinthedefectiveproductamovietheaterthatsellspopcorn
witharazorbladeinsideisnolessliablethanagrocerystorethatdoesso.Butstrictliabilityunderthis
ruledoesnotattachtoaprivateindividualwhosellshisownautomobile.Inthissense,Restatement,
Section402A,isanalogoustotheUCCslimitationofthewarrantyofmerchantabilitytothemerchant.

Therequirementthatthedefendantbeinthebusinessofsellinggetstotherationaleforthewhole
conceptofstrictproductsliability:businessesshouldshoulderthecostofinjuriesbecausetheyarein
thebestpositiontospreadtheriskanddistributetheexpenseamongthepublic.Thissamepolicyhas
beentherationaleforholdingbailorsandlessorsliablefordefectiveequipmentjustasiftheyhadbeen
sellers.Martinv.RyderRental,Inc.,353A.2d581(Del.1976).

ReachestheUserwithoutChangeinCondition
Restatement,Section402A(1)(b),limitsstrictliabilitytothosedefectiveproductsthatareexpectedto
anddoreachtheuserorconsumerwithoutsubstantialchangeintheconditioninwhichtheproductsare
sold.Aproductthatissafewhendeliveredcannotsubjectthesellertoliabilityifitissubsequently
mishandledorchanged.Theseller,however,mustanticipateinappropriatecasesthattheproductwill
bestoredfaultypackagingorsterilizationmaybethegroundsforliabilityiftheproductdeteriorates
beforebeingused.

LiabilityDespiteExerciseofAllDueCare
StrictliabilityappliesundertheRestatementruleeventhoughthesellerhasexercisedallpossiblecare
inthepreparationandsaleofhisproduct.Thisisthecruxofstrictliabilityanddistinguishesitfrom
theconventionaltheoryofnegligence.Itdoesnotmatterhowreasonablytheselleractedorhow
exemplaryisamanufacturersqualitycontrolsystemwhatmattersiswhethertheproductwas
defectiveandtheuserinjuredasaresult.Supposeanautomatedbottlefactorymanufactures1,000
bottlesperhourunderexactingstandards,witharigorousandcostlyqualitycontrolprogramdesigned
toweedoutanybottlesshowingevenaninfinitesimalamountofstress.Theplantisstateoftheart,
anditscomputerizedqualitycontroloperationisthebestintheworld.Itregularlydetectstheoneout
ofevery10,000bottlesthatanalysishasshownwillbedefective.Despitethisintenseeffort,itproves
impossibletoweedouteverydefectivebottleoneoutofonemillion,say,willstillescapedetection.
Assumethatabottle,filledwithsoda,findsitswayintoaconsumershome,explodeswhenhandled,
sendsglassshardsintohiseye,andblindshim.Undernegligence,thebottlerhasnoliabilityunder
strictliability,thebottlerwillbeliabletotheconsumer.

LiabilitywithoutContractualRelation
UnderRestatement,Section402A(2)(b),strictliabilityapplieseventhoughtheuserhasnotpurchased
theproductfromthesellernorhastheuserenteredintoanycontractualrelationwiththeseller.In
short,privityisabolishedandtheinjuredusermayusethetheoryofstrictliabilityagainst
manufacturersandwholesalersaswellasretailers.Here,however,thecourtshavevariedintheir
approachesthetrendhasbeentoallowbystandersrecovery.TheRestatementexplicitlyleavesopen
thequestionofthebystandersrighttorecoverunderstrictliability.

ProblemswithStrictLiability
Strictliabilityisliabilitywithoutproofofnegligenceandwithoutprivity.Itwouldseemthatstrict
liabilityistheholygrailofproductsliabilitylawyers:thecompleteanswer.Well,no,itsnottheholy
grail.Itiscertainlytruethat402Aabolishesthecontractualproblemsofwarranty.Restatement,
Section402A,Commentm,says,

TherulestatedinthisSectionisnotgovernedbytheprovisionsoftheUniformCommercialCode,asto
warrantiesanditisnotaffectedbylimitationsonthescopeandcontentofwarranties,orbylimitation
tobuyerandsellerinthosestatutes.Noristheconsumerrequiredtogivenoticetothesellerofhis
injurywithinareasonabletimeafteritoccurs,asprovidedbytheUniformAct.Theconsumerscauseof
actiondoesnotdependuponthevalidityofhiscontractwiththepersonfromwhomheacquiresthe
product,anditisnotaffectedbyanydisclaimerorotheragreement,whetheritbebetweentheseller

andhisimmediatebuyer,orattachedtoandaccompanyingtheproductintotheconsumershands.In
short,warrantymustbegivenanewanddifferentmeaningifitisusedinconnectionwiththisSection.
Itismuchsimplertoregardtheliabilityherestatedasmerelyoneofstrictliabilityintort.

InherentintheRestatementslanguageistheobviouspointthatiftheproducthasbeenaltered,losses
causedbyinjuryarenotthemanufacturersliability.Beyondthattherearestillsomelimitationsto
strictliability.

Disclaimers
CommentmspecificallysaysthecauseofactionunderRestatement,Section402A,isnotaffectedby
disclaimer.Butinnonconsumercases,courtshaveallowedclearandspecificdisclaimers.In1969,the
NinthCircuitobserved:InKaiserSteelCorp.the[CaliforniaSupremeCourt]courtupheldthe
dismissalofastrictliabilityactionwhentheparties,dealingfrompositionsofrelativelyequaleconomic
strength,contractedinacommercialsettingtolimitthedefendantsliability.Thecourtwentontohold
thatinthissituationthestrictliabilitycauseofactiondoesnotapplyatall.Inreachingthisconclusion,
thecourtinKaiserreasonedthatstrictliabilityisdesignedtoencompasssituationsinwhichthe
principlesofsaleswarrantiesservetheirpurposefitfullyatbest.[Citation]Itconcludedthatinsuch
commercialsettingstheUCCprinciplesworkwellandtoapplythetortdoctrinesofproductsliability
willdisplacethestatutorylawratherthanbringoutitsfullflavor.IdahoPowerCo.v.Westinghouse
ElectricCorp.,596F.2d924,9CA(1979).

PlaintiffsConduct
Conductbytheplaintiffherselfmaydefeatrecoveryintwocircumstances.

AssumptionofRisk
Courtshaveallowedthedefenseofassumptionoftheriskinstrictproductsliabilitycases.Aplaintiff
assumestheriskofinjury,thusestablishingdefensetoclaimofstrictproductsliability,whenheis
awaretheproductisdefective,knowsthedefectmakestheproductunreasonablydangerous,has
reasonableopportunitytoelectwhethertoexposehimselftothedanger,andneverthelessproceedsto
makeuseoftheproduct.Therulemakessense.

MisuseorAbuseoftheProduct
Wheretheplaintiffdoesnotknowauseoftheproductisdangerousbutneverthelessusesforan
incorrectpurpose,adefensearises,butonlyifsuchmisusewasnotforeseeable.Ifitwas,the
manufacturershouldwarnagainstthatmisuse.InEastmanv.StanleyWorks,acarpenteruseda
framinghammertodrivemasonrynailstheclawofthehammerbrokeoff,strikinghiminthe
eye.Eastmanv.StanleyWorks,907N.E.2d768(OhioApp.2009).Hesued.Thecourtheldthatwhile
adefensedoesexistwheretheproductisusedinacapacitywhichisunforeseeablebythemanufacturer
andcompletelyincompatiblewiththeproductsdesignmisuseofaproductsuggestsausewhichwas
unanticipatedorunexpectedbytheproductmanufacturer,orunforeseeableandunanticipated[but]it
wasnotthecasethatreasonablemindscouldonlyconcludethatappelleemisusedthe[hammer].
Thoughtheplaintiffsuseofthehammermighthavebeenunreasonable,unreasonableuseisnota
defensetoastrictproductliabilityactionortoanegligenceaction.

LimitedRemedy
TheRestatementsaysrecoveryunderstrictliabilityislimitedtophysicalharmtherebycausedtothe
ultimateuserorconsumer,ortohisproperty,butnototherlossesandnoteconomiclosses.InAtlas
Airv.GeneralElectric,aNewYorkcourtheldthattheeconomiclossrule(norecoveryforeconomic
losses)barredstrictproductsliabilityandnegligenceclaimsbythepurchaserofausedairplaneagainst
theairplaneenginemanufacturerfordamagetotheplanecausedbyanemergencylandingnecessitated
byenginefailure,wherethepurchasermerelyallegedeconomiclosseswithrespecttotheplaneitself,
andnotdamagesforpersonalinjury(recoveryfordamagetotheenginewasallowed).AtlasAirv.
GeneralElectric,16A.D.3d444(N.Y.A.D.2005).

Butthereareexceptions.InDuffinv.IdahoCropImp.Assn,thecourtrecognizedthataparty
generallyowesnodutytoexerciseduecaretoavoidpurelyeconomicloss,butifthereisaspecial

relationshipbetweenthepartiessuchthatitwouldbeequitabletoimposesuchaduty,thedutywillbe
imposed.Duffinv.IdahoCropImp.Assn,895P.2d1195(Idaho1995).Inotherwords,thereisan
extremelylimitedgroupofcaseswherethelawofnegligenceextendsitsprotectionstoapartys
economicinterest.

TheThirdRestatement
Thelawdevelops.Whatseemedfittingin1964whentheRestatement(Second)announcedthestateof
thecommonlawrulesforstrictliabilityinSection402Aseemed,by1997,nottobetrackingcommon
lawentirelyclosely.TheAmericanLawInstitutecameoutwiththeRestatement(Third)inthatyear.
TheRestatementchangessomethings.Mostnotablyitabolishestheunreasonablydangeroustest
andsubstitutesariskutilitytest.Thatis,aproductisnotdefectiveunlessitsriskinessoutweighsits
utility.Moreimportant,theRestatement(Third),Section2,nowrequirestheplaintifftoprovidea
reasonablealternativedesigntotheproductinquestion.Inadvancingareasonablealternativedesign,
theplaintiffisnotrequiredtoofferaprototypeproduct.Theplaintiffmustonlyshowthatthe
proposedalternativedesignexistsandissuperiortotheproductinquestion.TheRestatement(Third)
alsomakesitmoredifficultforplaintiffstosuedrugcompaniessuccessfully.Onelegalscholar
commentedasfollowsontheRestatement(Third):

TheprovisionsoftheThirdRestatement,ifimplementedbythecourts,willestablishadegreeof
fairnessintheproductsliabilityarena.IfcourtsadopttheThirdRestatementseliminationofthe
consumerexpectationstest,thischangealonewillstripjuriesoftheabilitytorenderdecisionsbased
onpotentiallysubjective,capriciousandunscientificopinionsthataparticularproductdesignisunduly
dangerousbasedonitsperformanceinasingleincident.Moreimportant,plaintiffswillberequiredto
proposeareasonablealternativedesigntotheproductinquestion.Sucharequirementwillforce
plaintiffstoprovethatabetterproductdesignexistsotherthanintheunprovenanduntesteddomain
oftheirexpertsimaginations.QuinlivanWexlerLLP,The3rdRestatementofTortsShapingthe
FutureofProductsLiabilityLaw,June1,1999,accessedMarch1,2011,
http://library.findlaw.com/1999/Jun/1/127691.html.

Ofcoursesomepeopleputmorefaithinjuriesthanisevidenthere.ThenewRestatementhasbeen
adoptedbyafewjurisdictionsandsomecasestheadoptingjurisdictionsincorporatesomeofitsideas,
butcourtsappearreluctanttoabandonfamiliarprecedent.

KEYTAKEAWAY
Becausethedoctrinesofbreachofwarrantyandnegligencedidnotprovideadequaterelieftothose
sufferingdamagesorinjuriesinproductsliabilitycases,beginninginthe1960scourtsdevelopeda
newtorttheory:strictproductsliability,restatedintheSecondRestatement,section402A.Basically
thedoctrinesaysthatifgoodssoldareunreasonablydangerousordefective,themerchantsellerwill
beliablefortheimmediatepropertylossandpersonalinjuriescausedthereby.Butthereremain
obstaclestorecoveryevenunderthisexpandedconceptofliability:disclaimersofliabilityhavenot
completelybeendismissed,theplaintiffsconductorchangestothegoodsmaylimitrecovery,and
withsomeexceptionstheremediesavailablearelimitedtopersonalinjury(anddamagetothe
goodsthemselves);economiclossisnotrecoverable.Almostfortyyearsofexperiencewiththe
SecondRestatementssectiononstrictliabilityhasseenchangesinthelaw,andtheThird
Restatementintroducesthose,butithasnotbeenwidelyacceptedyet.

EXERCISES
1. Whatwasperceivedtobeinadequateaboutwarrantyandnegligencetheoriesthatnecessitated
thedevelopmentofstrictliability?
2. Brieflydescribethedoctrine.
3. Whatdefectsingoodsrendertheirsellersstrictlyliable?
4. Whocountsasaliableseller?
5. Whatobstaclesdoesaplaintiffhavetoovercomehere,andwhatlimitationsarethereto
recovery?

9.5TortReform
LEARNINGOBJECTIVES
1. Seewhytortreformisadvocated,whyitisopposed,andwhatintereststakeeachside.
2. Understandsomeofthesignificantstatereformsinthelasttwodecades.
3. Knowwhatfederalreformshavebeeninstituted.

TheCryforReform
In1988,TheConferenceBoardpublishedastudythatresultedfromasurveyofmorethan500chief
executiveofficersfromlargeandsmallcompaniesregardingtheeffectsofproductsliabilityontheir
firms.ThestudyconcludedthatUScompaniesarelesscompetitiveininternationalbusinessbecauseof
theseeffectsandthatproductsliabilitylawsmustbereformed.Thereformefforthasbeenunderway
eversince,withvaryingdegreesofalarmsandfingerpointingastowhoistoblameforthetortcrisis,
ifthereevenisone.Businessandprofessionalgroupsbeatthedrumsfortortreformasameansto
guaranteefairnessinthecourtsaswellasspurUSeconomiccompetitivenessinaglobalmarketplace,
whileplaintiffsattorneysandconsumeradvocatesclaimthatbusinessessimplywanttoexternalize
costsbydenyingrecoverytovictimsofgreedandcarelessness.

Eachsidevilifiestheotherinveryunseemlylanguage:probusinessadvocatescallconsumeroriented
statesjudicialhellholesandcomplainofwellorchestratedcampaign[s]bytortlawyerlobbyistsand
alliestoundoyearsoftortreformatthestatelevel,AmericanTortReformAssociationwebsite,
accessedMarch1,2011,http://www.atra.org.whileproplaintiffinterestsclaimthatthereisscant
evidenceofanytortabuse.http://www.shragerlaw.com/html/legal_rights.html.Itwouldbemore
amusingifitwerenotsoshrillandpartisan.Perhapsthemostonecansaywithanycertaintyisthat
peoplesperceptionofrealityishighlycoloredbytheirselfinterest.Inanyevent,therehavebeen
reforms(or,asthedetractorssay,deforms).

StateReforms
Proddedbyastutelobbyingbymanufacturingandotherbusinesstradeassociations,statelegislatures
respondedtothecriesofmanufacturersaboutthehardshipsthatthejudicialtransformationofthe
productsliabilitylawsuitostensiblyworkedonthem.Moststatelegislatureshaveenactedatleastone
ofsomethreedozenreformproposalpressedonthemoverthelasttwodecades.Someofthese
measuresdolittlemorethanaffirmandclarifycaselaw.Amongthemostthathavepassedinseveral
statesareoutlinedinthenextsections.

StatutesofRepose
Perhapsnothingsofrightensthemanufacturerastheoccasionalreportsofcasesinvolvingproducts
thatwerefiftyorsixtyyearsoldormoreatthetimetheyinjuredtheplaintiff.Manystateshave
addressedthisproblembyenactingthesocalledstatuteofrepose.Thisstatuteestablishesatime
period,generallyrangingfromsixtotwelveyearsthemanufacturerisnotliableforinjuriescausedby
theproductafterthistimehaspassed.

StateoftheArtDefense
Severalstateshaveenactedlawsthatpreventadvancesintechnologyfrombeingheldagainstthe
manufacturer.Thefearisthataplaintiffwillconvinceajuryaproductwasdefectivebecauseitdidnot
usetechnologythatwaslateravailable.Manufacturershaveoftenfailedtoadoptnewadvancesin
technologyforfearthatthechangewillbeheldagainsttheminaproductsliabilitysuit.Thesenew
statutesdeclarethatamanufacturerhasavaliddefenseifitwouldhavebeentechnologicallyimpossible
tohaveusedthenewandsafertechnologyatthetimetheproductwasmanufactured.

FailuretoWarn
Sinceitisofteneasiertoprovethataninjuryresultedbecausethemanufacturerfailedtowarnagainsta
certainusethanitistoproveaninjurywascausedbyadefectivedesign,manufacturersaresubjectedto

aconsiderabledegreeofhindsight.Someofthestatestatuteslimitthedegreetowhichthefailureto
warncanbeusedtoconnecttheproductandtheinjury.Forexample,themanufacturerhasavalid
defenseifitwouldhavebeenimpossibletoforeseethattheconsumermightmisusetheproductina
certainway.

ComparativeFaultforConsumerMisuse
Contributorynegligenceisgenerallynotadefenseinastrictliabilityaction,whileassumptionofriskis.
Instatesthathaveenactedsocalledcomparativefaultstatutes,theusersdamagesarepeggedtothe
percentageofresponsibilityfortheinjurythatthedefendantbears.Thusiftheconsumersmisuseof
theproductisassessedashavingbeen20percentresponsiblefortheaccident(orfortheextentofthe
injuries),theconsumerisentitledtoonly80percentofdamages,theamountforwhichthedefendant
manufacturerisresponsible.

CriminalPenalties
Notallstatereformisfavorabletomanufacturers.UndertheCaliforniaCorporateCriminalLiability
Act,whichtookeffecttwentyyearsago,companiesandmanagersmustnotifyastateregulatoryagency
iftheyknowthataproducttheyaresellinginCaliforniahasasafetydefect,andthesameruleapplies
undercertainfederalstandards,asToyotaexecutiveswereinformedbytheirlawyersfollowingalarms
aboutsuddenaccelerationinsomeToyotaautomobiles.Failuretoprovidenoticemayresultin
corporateandindividualcriminalliability.

FederalReform
Piecemealreformofproductsliabilitylawineachstatehascontributedtothebasiclackofuniformity
fromstatetostate,givingitacrazyquilteffect.Inthenineteenthcentury,thismighthavemadelittle
difference,buttodaymostmanufacturerssellinthenationalmarketandaresubjectedtothevarying
requirementsofthelawineverystate.ForyearstherehasbeentalkinandoutofCongressofenacting
afederalproductsliabilitylawthatwouldincludereformsadoptedinmanystates,asdiscussedearlier.
Sofar,theseeffortshavebeenwithoutmuchsuccess.

Congressionaltortlegislationisnottheonlypossiblefederalactiontocopewithproductsrelated
injuries.In1972,CongresscreatedtheConsumerProductSafetyCommission(CPSC)andgavethe
commissionbroadpowertoacttopreventunsafeconsumerproducts.TheCPSCcanissuemandatory
safetystandardsgoverningdesign,construction,contents,performance,packaging,andlabelingof
morethan10,000consumerproducts.Itcanrecallunsafeproducts,recovercostsonbehalfofinjured
consumers,prosecutethosewhoviolatestandards,andrequiremanufacturerstoissuewarningson
hazardousproducts.Italsoregulatesfourfederallawspreviouslyadministeredbyotherdepartments:
theFlammableFabricsAct,theHazardousSubstancesAct,thePoisonPreventionPackagingAct,and
theRefrigeratorSafetyAct.Initsearlyyears,theCPSCissuedstandardsforbicycles,powermowers,
televisionsets,architecturalglass,extensioncords,bookmatches,poolslides,andspaceheaters.But
thelistofproductsislong,andtheCPSCsrecordismixed:ithascomeunderfireforbeingshorton
regulationandfortakingtoolongtopromulgatetherelativelyfewsafetystandardsithasissuedina
decade.

KEYTAKEAWAY
BusinessadvocatesclaimtheAmericantortsystemproductsliabilitylawincludedisbrokenand
corruptedbygraspingplaintiffslawyers;plaintiffslawyerssaybusinessesaregreedyandcarelessand
needtobesmackedintorecognitionofitsresponsibilitiestobemorecareful.Thedebaterageson,
decadeafterdecade.Buttherehavebeensomereformsatthestatelevel,andatthefederallevelthe
ConsumerProductSafetyActsetsoutstandardsforsafeproductsandrequiresrecallsfordefective
ones.Itisregularlycastigatedfor(1)beingofficiousandmeddlingor(2)beingtootimid.

EXERCISES
1. WhyisitsodifficulttodetermineiftherereallyisatortcrisisintheUnitedStates?
2. Whatreformshavebeenmadetostatetortlaw?
3. Whatfederallegislationaffectsconsumersafety?

9.6Cases
ImpliedWarrantyofMerchantabilityandtheRequirementofaSale
Sheeskinv.GiantFood,Inc.

318A.2d874(Md.App.1974)

Davidson,J.

EveryFridayforovertwoyearsNathanSeigel,age73,shoppedwithhiswifeataGiantFoodStore.This
complexproductsliabilitycaseisbeforeusbecauseononeoftheseFridays,23October1970,Mr.
SeigelwascarryingasixpackcartonofCocaColafromadisplaybinattheGianttoashoppingcart
whenoneormoreofthebottlesexploded.Mr.Seigellosthisfooting,felltothefloorandwasinjured.

IntheCircuitCourtforMontgomeryCounty,Mr.SeigelsuedboththeGiantFood,Inc.,andthe
WashingtonCocaColaBottlingCompany,Inc.,fordamagesresultingfromtheirallegednegligenceand
breachofanimpliedwarranty.AttheconclusionofthetrialJudgeWalterH.Moormandirecteda
verdictinfavorofeachdefendant.

Inanactionbasedonbreachofwarrantyitisnecessaryfortheplaintifftoshowtheexistenceofthe
warranty,thefactthatthewarrantywasbrokenandthatthebreachofwarrantywastheproximate
causeofthelosssustained.[UCC]2314.Theretailer,GiantFood,Inc.,contendsthatappellantfailed
toprovethatanimpliedwarrantyexistedbetweenhimselfandtheretailerbecausehefailedtoprove
thattherewasasalebytheretailertohimoracontractofsalebetweenthetwo.Theretailermaintains
thattherewasnosaleorcontractofsalebecauseatthetimethebottlesexplodedMr.Seigelhadnotyet
paidforthem.Wedonotagree.

[UCC]2314(1)statesinpertinentpart:

Unlessexcludedormodified,awarrantythatthegoodsshallbemerchantableisimpliedinacontract
fortheirsaleifthesellerisamerchantwithrespecttogoodsofthatkind.UniformCommercialCode,
Section2316.(emphasisadded)

Thus,inorderfortheimpliedwarrantiesof2314tobeapplicabletheremustbeacontractforsale.
InMarylandithasbeenrecognizedthatneitheracompletedsalenorafullyexecutedcontractforsale
isrequired.Itisenoughthattherebeinexistenceanexecutorycontractforsale.

Here,theplaintiffhastheburdenofshowingtheexistenceofthewarrantybyestablishingthatatthe
timethebottlesexplodedtherewasacontractfortheirsaleexistingbetweenhimselfandtheGiant.
[Citation]Mr.Titus,themanageroftheGiant,testifiedthattheretailerisaselfservicestoreinwhich
theonlywayacustomercanbuyanythingistoselectithimselfandtakeittothecheckoutcounter.He
statedthatthereareoccasionswhenacustomermayselectaniteminthestoreandthenchangehis
mindandputtheitemback.Therewasnoevidencetoshowthattheretailereverrefusedtosellanitem
toacustomeronceithadbeenselectedbyhimorthattheretailerdidnotconsiderhimselfboundtosell
anitemtothecustomeraftertheitemhadbeenselected.Finally,Mr.Titussaidthatanemployeeof
GiantplacedthesixpackofCocaColaselectedbyMr.Seigelontheshelfwiththepurchaseprice
alreadystampeduponit.Mr.Seigeltestifiedthathepickedupthesixpackwiththeintenttopurchase
it.

Wethinkthatthereissufficientevidencetoshowthattheretailersactofplacingthebottlesuponthe
shelfwiththepricestampeduponthesixpackinwhichtheywerecontainedmanifestedanintentto
offerthemforsale,thetermsoftheofferbeingthatitwouldpasstitletothegoodswhenMr.Seigel
presentedthematthecheckoutcounterandpaidthestatedpriceincash.Wealsothinkthatthe
evidenceissufficienttoshowthatMr.Seigelsactoftakingphysicalpossessionofthegoodswiththe
intenttopurchasethemmanifestedanintenttoaccepttheofferandapromisetotakethemtothe
checkoutcounterandpayforthemthere.

[UCC]2206providesinpertinentpart:

(1)Unlessotherwiseunambiguouslyindicatedbythelanguageorcircumstances

(a)Anoffertomakeacontractshallbeconstruedasinvitingacceptanceinanymannerandbyany
mediumreasonableinthecircumstances.

TheOfficialComment1tothissectionstates:

Anyreasonablemannerofacceptanceisintendedtoberegardedasavailableunlesstheofferorhas
madequiteclearthatitwillnotbeacceptable.

Inourviewthemannerbywhichacceptancewastobeaccomplishedinthetransactionhereininvolved
wasnotindicatedbyeitherlanguageorcircumstances.Thesellerdidnotmakeitclearthatacceptance
couldnotbeaccomplishedbyapromiseratherthananact.Thusitisequallyreasonableunderthe
termsofthisspecificofferthatacceptancecouldbeaccomplishedinanyofthreeways:1)bytheactof
deliveringthegoodstothecheckoutcounterandpayingforthem2)bythepromisetopayforthe
goodsasevidencedbytheirphysicaldeliverytothecheckoutcounterand3)bythepromisetodeliver
thegoodstothecheckoutcounterandtopayforthemthereasevidencedbytakingphysicalpossession
ofthegoodsbytheirremovalfromtheshelf.

Thefactthatcustomers,havingonceselectedgoodswiththeintenttopurchasethem,arepermittedby
thesellertoreturnthemtotheshelvesdoesnotprecludethepossibilitythataselectionofthegoods,as
evidencedbytakingphysicalpossessionofthem,couldconstituteareasonablemodeofacceptance.
Section2106(3)provides:

Terminationoccurswheneitherpartypursuanttoapowercreatedbyagreementorlawputsanend
tothecontractotherwisethenforitsbreach.Onterminationallobligationswhicharestillexecutory
onbothsidesaredischargedbutanyrightbasedonpriorbreachorperformancesurvives.

Heretheevidencethattheretailerpermitsthecustomertochangehismindindicatesonlyan
agreementbetweenthepartiestopermittheconsumertoendhiscontractwiththeretailerirrespective
ofabreachoftheagreementbytheretailer.Itdoesnotindicatethatanagreementdoesnotexistprior
totheexerciseofthisoptionbytheconsumer.

HereMr.Seigeltestifiedthatallofthecircumstancessurroundinghisselectionofthebottleswere
normalthatthecartoninwhichthebottlescamewasnotdefectivethatinliftingthecartonfromthe
shelfandmovingittowardhisbasketthebottlesneithertouchednorweretouchedbyanythingother
thanhishandthattheyexplodedalmostinstantaneouslyafterheremovedthemfromtheshelfand
thatasaresultoftheexplosionhefellinjuringhimself.ItisobviousthatCocaColabottleswhichwould
breakundernormalhandlingarenotfitfortheordinaryuseforwhichtheywereintendedandthatthe
relinquishmentofphysicalcontrolofsuchadefectivebottletoaconsumerconstitutesabreachof
warranty.Thustheevidencewassufficienttoshowthatwhenthebottleslefttheretailerscontrolthey
didnotconformtotherepresentationsofthewarrantyofmerchantability,andthatthisbreachofthe
warrantywasthecauseofthelosssustained.

[JudgmentinfavorofGiantFoodsisreversedandthecaseremandedforanewtrial.Judgmentinfavor
ofthebottlerisaffirmedbecausetheplaintifffailedtoprovethatthebottlesweredefectivewhenthey
weredeliveredtotheretailer.]

CASEQUESTIONS
1. Whatwarrantydidtheplaintiffcomplainwasbreachedhere?
2. Bydisplayingthesodapop,thestoremadeanoffertoitscustomers.Howdidthecourtsaysuch
offersmightbeaccepted?
3. Whydidthecourtgetintothediscussionaboutterminationofthecontract?
4. Whatisthecontrollingruleoflawappliedinthiscase?

StrictLiabilityandBystanders

Embsv.PepsiColaBottlingCo.ofLexington,Kentucky,Inc.

528S.W.2d703(Ky.1975)

Jukowsky,J.

OntheafternoonofJuly25,1970plaintiffappellantenteredtheselfserviceretailstoreoperatedby
thedefendantappellee,StampersCashMarket,Inc.,forthepurposeofbuyingsoftdrinksforthe
kids.Shewenttoanuprightsoftdrinkcooler,removedfivebottlesandplacedtheminacarton.
Unnoticedbyher,acartonofSevenUpwassittingonthefloorattheedgeoftheproducecounter
aboutonefootfromwhereshewasstanding.Assheturnedawayfromthecoolersheheardan
explosionthatsoundedlikeashotgun.Whenshelookeddownshesawagashinherleg,poponher
leg,greenpiecesofabottleonthefloorandtheSevenUpcartoninthemidstofthedebris.Shedidnot
kickorotherwisecomeintocontactwiththecartonofSevenUppriortotheexplosion.Herson,who
waswithher,recognizedthegreenpiecesofglassaspartofaSevenUpbottle.

ShewasimmediatelytakentothehospitalbyMrs.Stamper,amanagingagentofthestore.Mrs.
StampertoldherthataSevenUpbottlehadexplodedandthatseveralbottleshadexplodedthatweek.
BeforeleavingthestoreMrs.Stamperinstructedoneofherchildrentocleanupthemess.Apparently,
allofthephysicalevidencewentoutwiththetrash.ThelocationoftheSevenUpcartonimmediately
beforetheexplosionwasnotaplacewheresuchitemswereordinarilykept.

Whensherestedhercase,thedefendantsappelleesmovedforadirectedverdictintheirfavor.Thetrial
courtgrantedthemotiononthegroundsthatthedoctrineofstrictproductliabilityintortdoesnot
extendbeyondusersandconsumersandthattheevidencewasinsufficienttopermitaninferencebya
reasonablyprudentmanthatthebottlewasdefectiveorifitwas,whenitbecameso.

In[Citation]weadoptedtheviewofstrictproductliabilityintortexpressedinSection402Aofthe
AmericanLawInstitutesRestatementofTorts2d.

402A.SpecialLiabilityofSellerofProductforPhysicalHarmtoUseror
Consumer
(1)Onewhosellsanyproductinadefectiveconditionunreasonablydangeroustotheuserortohis
propertyissubjecttoliabilityforphysicalharmtherebycausedtotheultimateuserorconsumer,orto
hisproperty,if

(a)thesellerisengagedinthebusinessofsellingsuchaproduct,and

(b)itisexpectedtoanddoesreachtheuserorconsumerwithoutsubstantialchangeintheconditionin
whichitwassold.

(2)TherulestatedinSubsection(1)appliesalthough

(a)thesellerhasexercisedallpossiblecareinthepreparationandsaleofhisproduct,and

(b)theuserorconsumerhasnotboughttheproductfromorenteredintoanycontractualrelationwith
theseller.

Commentfonthatsectionmakesitabundantlyclearthatthisruleappliestoanypersonengagedinthe
businessofsupplyingproductsforuseorconsumption,includinganymanufacturerofsuchaproduct
andanywholesaleorretaildealerordistributor.

Commentcpointsoutthatonwhatevertheory,thejustificationfortherulehasbeensaidtobethatthe
seller,bymarketinghisproductforuseandconsumption,hasundertakenandassumedaspecial
responsibilitytowardanymemberoftheconsumingpublicwhomaybeinjuredbyitthatthepublichas
therighttoanddoesexpectthatreputablesellerswillstandbehindtheirgoodsthatpublicpolicy
demandsthattheburdenofaccidentalinjuriescausedbyproductsintendedforconsumptionbeplaced
uponthosewhomarketthem,andbetreatedasacostofproductionagainstwhichliabilityinsurance

canbeobtainedandthattheconsumerofsuchproductsisentitledtothemaximumofprotectionat
thehandsofsomeone,andtheproperpersonstoafforditarethosewhomarkettheproducts.

ThecaveattothesectionprovidesthattheInstituteexpressesnoopinionastowhethertherulemay
notapplytoharmtopersonsotherthanusersorconsumers.CommentoncaveatostatestheInstitute
expressesneitherapprovalnordisapprovalofexpansionoftheruletopermitrecoverybycasual
bystandersandotherswhomaycomeincontactwiththeproduct,andadmitstheremaybenoessential
reasonwhysuchplaintiffsshouldnotbebroughtwithinthescopeofprotectionafforded,otherthan
theydonothavethesamereasonsforexpectingsuchprotectionastheconsumerwhobuysamarketed
product,andthatthesocialpressurewhichhasbeenlargelyresponsibleforthedevelopmentoftherule
hasbeenaconsumerspressure,andthereisnotthesamedemandfortheprotectionofcasual
strangers.

Thecaveatarticulatestheessentialpoint:Oncestrictliabilityisaccepted,bystanderrecoveryisfait
accompli.

Ourexpressedpublicpolicywillbefurtheredifweminimizetheriskofpersonalinjuryandproperty
damagebychargingthecostsofinjuriesagainstthemanufacturerwhocanprocureliabilityinsurance
anddistributeitsexpenseamongthepublicasacostofdoingbusinessandsincetheriskofharmfrom
defectiveproductsexistsformerebystandersandpassersbyaswellasforthepurchaseroruser,there
isnosubstantialreasonforprotectingoneclassofpersonsandnottheother.Thesamepolicyrequires
ustomaximizeprotectionfortheinjuredthirdpartyandpromotethepublicinterestindiscouraging
themarketingofproductshavingdefectsthatareamenacetothepublicbyimposingstrictliability
uponretailersandwholesalersinthedistributivechainresponsibleformarketingthedefectiveproduct
whichinjuresthebystander.Theimpositionofstrictliabilityplacesnounreasonableburdenupon
sellersbecausetheycanadjustthecostofinsuranceprotectionamongthemselvesinthecourseoftheir
continuingbusinessrelationship.

Wemustnotshirkfromextendingtheruletothemanufacturerforfearthattheretailerormiddleman
willbeimpaledontheswordofliabilitywithoutregardtofault.Theirliabilitywasalreadyestablished
underSection402AoftheRestatementofTorts2d.Asamatterofpublicpolicytheretaileror
middlemanaswellasthemanufacturershouldbeliablesincethelossforinjuriesresultingfrom
defectiveproductsshouldbeplacedonthosemembersofthemarketingchainbestabletopaytheloss,
whocanthendistributesuchriskamongthemselvesbymeansofinsuranceandindemnityagreements.
[Citation]

Theresultwhichwereachdoesnotgivethebystanderafreeride.Whenproductsandconsumersare
consideredintheaggregate,bystanders,asaclass,purchasemostofthesameproductstowhichthey
areexposedasbystanders.Thus,asaclass,theyindirectlysubsidizetheliabilityofthemanufacturer,
middlemanandretailerandinthissensedopayfortheinsurancepolicytiedtotheproduct.

Forthesakeofclaritywerestatetheextensionoftherule.TheprotectionsofSection402Aofthe
RestatementofTorts2dextendtobystanderswhoseinjuryfromthedefectiveproductisreasonably
foreseeable.

ThejudgmentisreversedandthecauseisremandedtotheClarkCircuitCourtforfurtherproceedings
consistentherewith.

Stephenson,J.(dissenting):

Irespectfullydissentfromthemajorityopiniontotheextentthatitsubjectsthesellertoliability.Every
ruleoflawinmymindshouldhavearationalbasis.Iseenonehere.

Liabilityofthesellertotheuser,orconsumer,isbaseduponwarranty.Restatement,Second,Tortss
403A.Toextendthisliabilitytoinjuriessufferedbyabystanderistodepartfromanyreasonablebasis
andimposeliabilitybyjudicialfiatuponanotherwiseinnocentdefendant.Idonotbelievethatthe
expressioninthemajorityopinionwhichjustifiesthisruleforthereasonthatthesellermayprocure
liabilityinsuranceprotectionisavalidlegalbasisforimposingliabilitywithoutfault.Irespectfully
dissent.

CASEQUESTIONS
1. Whydidnttheplaintiffhereusewarrantyasatheoryofrecovery,asMr.Seigeldidinthe
previouscase?
2. Thecourtoffersarationaleforthedoctrineofstrictproductsliability.Whatisit?
3. Restatement,Section402A,byitstermsextendsprotectiontotheultimateuserorconsumer,
butMrs.Embs[plaintiffappellant]wasnotthat.Whatrationaledidthecourtgiveforexpanding
theprotectionhere?
4. Amongtheentitiesintheverticaldistributionchainmanufacturer,wholesaler,retailerwhois
liableunderthisdoctrine?
5. WhatargumentdidJudgeStephensonhaveindissent?Isitagoodone?
6. Whatisthecontrollingruleoflawdevelopedinthiscase?

FailuretoWarn
Laaperiv.Sears,Roebuck&Co.,Inc.

787F.2d726C.A.1(Mass.1986)

Campbell,J.

InMarch1976,plaintiffAlbinLaaperipurchasedasmokedetectorfromSears.Thedetector,
manufacturedbythePittwayCorporation,wasdesignedtobepoweredbyAC(electrical)current.
Laaperiinstalledthedetectorhimselfinoneofthetwoupstairsbedroomsinhishome.

EarlyinthemorningofDecember27,1976,afirebrokeoutintheLaaperihome.Thethreeboysinone
oftheupstairsbedroomswerekilledintheblaze.Laaperis13yearolddaughterJanet,whowas
sleepingintheotherupstairsbedroom,receivedburnsover12percentofherbodyandwashospitalized
forthreeweeks.

Theuncontrovertedtestimonyattrialwasthatthesmokedetectordidnotsoundanalarmonthenight
ofthefire.Thecauseofthefirewaslaterfoundtobeashortcircuitinanelectricalcordthatwaslocated
inacedarclosetintheboysbedroom.TheLaaperihomehadtwoseparateelectricalcircuitsinthe
upstairsbedrooms:onewhichprovidedelectricitytotheoutletsandonewhichpoweredthelighting
fixtures.Thesmokedetectorhadbeenconnectedtotheoutletcircuit,whichwasthecircuitthatshorted
andcutoff.Becausethecircuitwasshorted,theACoperatedsmokedetectorreceivednopoweronthe
nightofthefire.Therefore,althoughthedetectoritselfwasinnosensedefective(indeed,afterthefire
thecharreddetectorwastestedandfoundtobeoperable),noalarmsounded.

LaaperibroughtthisdiversityactionagainstdefendantsSearsandPittway,assertingnegligentdesign,
negligentmanufacture,breachofwarranty,andnegligentfailuretowarnofinherentdangers.The
partiesagreedthattheapplicablelawisthatofMassachusetts.Beforetheclaimswenttothejury,
verdictsweredirectedinfavorofdefendantsonalltheoriesofliabilityotherthanfailuretowarn.

Laaperisclaimunderthefailuretowarntheorywasthathewasunawareofthedangerthatthevery
shortcircuitwhichmightigniteafireinhishomecould,atthesametime,incapacitatethesmoke
detector.Hecontendedthathadhebeenwarnedofthisdanger,hewouldhavepurchasedabattery
poweredsmokedetectorasabackuportakensomeotherprecaution,suchaswiringthedetectortoa
circuitofitsown,inorderbettertoprotecthisfamilyintheeventofanelectricalfire.

ThejuryreturnedverdictsinfavorofLaaperiinallfouractionsonthefailuretowarnclaim.Thejury
assesseddamagesintheamountof$350,000[$1,050,000,orabout$3,400,000in2010dollars]
eachofthethreeactionsbroughtonbehalfofthedeceasedsons,and$750,000[about$2,500,000in
2010dollars]intheactionbroughtonbehalfofJanetLaaperi.Thedefendantsmotionsfordirected
verdictandjudgmentnotwithstandingtheverdictweredenied,anddefendantsappealed.

DefendantsaskustodeclarethattheriskthatanelectricalfirecouldincapacitateanACpowered
smokedetectorissoobviousthattheaverageconsumerwouldnotbenefitfromawarning.Thisisnota
trivialargumentinearliersomemightsaysounderdays,wemighthaveacceptedit.Oursenseof

thecurrentstateofthetortlawinMassachusettsandmostotherjurisdictions,however,leadsusto
concludethat,today,thematterbeforeusposesajuryquestionthatobviousnessinasituationsuch
asthiswouldbetreatedbytheMassachusettscourtsaspresentingaquestionoffact,notoflaw.Tobe
sure,itwouldbeobvioustoanyonethatanelectricaloutagewouldcausethissmokedetectortofail.But
theaveragepurchasermightnotcomprehendthespecificdangerthatafirecausingelectricalproblem
cansimultaneouslyknockoutthecircuitintowhichasmokedetectoriswired,causingthedetectorto
failattheverymomentitisneeded.Thus,whilethefailureofadetectortofunctionastheresultofan
electricalmalfunctiondue,say,toabrokenpowerlineoraneighborhoodpoweroutagewould,we
think,beobviousasamatteroflaw,thefailurethatoccurredhere,beingassociatedwiththeveryrisk
fireforwhichthedevicewaspurchased,wasnot,orsoajurycouldfind.

Finally,defendantscontendthattheawardof$750,000[$2.5millionin2010dollars]indamagesto
JanetLaaperiwasexcessive,andshouldhavebeenoverturnedbythedistrictcourt.

JanetLaaperitestifiedthatonthenightofthefire,shewokeupandsmelledsmoke.Shewokeher
friendwhowassleepinginherroom,andtheyclimbedouttotheicyroofofthehouse.Herfather
grabbedherfromtheroofandtookherdownaladder.Shewastakentothehospital.Althoughshewas
inmilddistress,shewasfoundtobealert,awake,[and]cooperative.Herchestwasclear.Shewas
diagnosedashavingfirstandseconddegreeburnsofherrightcalf,bothbuttocksandheels,andherleft
lowerback,orapproximately12percentofhertotalbodyarea.Shealsosufferedfromaburnofher
tracheobronchialmucosa(i.e.,theliningofherairway)duetosmokeinhalation,andmultiple
superficiallacerationsonherrighthand.

Thejuryundoubtedly,andunderstandably,feltagreatdealofsympathyforayounggirlwho,attheage
of13,lostthreebrothersinatragicfire.Butbylawthejurywasonlypermittedtocompensateherfor
thosedamagesassociatedwithherowninjuries.Herinjuriesincludedfrightandpainatthetimeofand
afterthefire,athreeweekhospitalstay,someminordiscomfortforseveralweeksafterdischarge,and
apermanentscaronherlowerback.Plaintiffhaspointedtonocases,andwehavediscoverednone,in
whichsuchalargeverdictwassustainedforsuchrelativelyminorinjuries,involvingnocontinuing
disability.

ThejudgmentsinfavorofAlbinLaaperiinhiscapacityasadministratoroftheestatesofhisthreesons
areaffirmed.IntheactiononbehalfofJanetLaaperi,theverdictofthejuryissetaside,thejudgment
ofthedistrictcourtvacated,andthecauseremandedtothatcourtforanewtriallimitedtotheissueof
damages.

CASEQUESTIONS
1. TheC.A.1underthetitleofthecasemeansitisaUSCourtofAppealscasefromtheFirstCircuit
inMassachusetts.Whyisthiscaseinfederalcourt?
2. WhydoesthecourttalkaboutitssenseofthecurrentstateoftortlawinMassachusettsand
howthiscasewouldbetreatedbytheMassachusettscourts,asifitwerenotinthestateatall
butsomehowoutside?
3. Whatruleoflawisinplayhereastothedefendantsliability?
4. Thisisatragiccasethreeboysdiedinahousefire.Speakingdispassionatelyifnotheartlessly
though,didthefireactuallycostMr.Laaperi,ordidhelose$3.4million(in2010dollars)asthe
resultofhissonsdeaths?Doesitmakesensethatheshouldbecomeamillionaireasaresult?
Whoendsuppayingthisamount?(Thelawyersfeesprobablytookabouthalf.)
5. Isitlikelythatsmokealarmmanufacturesandsellerschangedtheinstructionsasaresultofthis
case?

9.7SummaryandExercises

Summary
Productsliabilitydescribesatypeofclaimforinjurycausedbyadefectiveproductandnota
separatetheoryofliability.Inthetypicalcase,threelegaldoctrinesmaybeasserted:(1)warranty,

(2)negligence,and(3)strictliability.

Ifasellerassertsthataproductwillperforminacertainmannerorhascertaincharacteristics,he
hasgivenanexpresswarranty,andhewillbeheldliablefordamagesifthewarrantyisbreached
thatis,ifthegoodsdonotliveuptothewarranty.Noteveryconceivableclaimisanexpress
warrantythecourtspermitacertaindegreeofpuffing.

Animpliedwarrantyisonecreatedbylaw.Goodssoldbyamerchantsellercarryanimplied
warrantyofmerchantability,meaningthattheymustpossesscertaincharacteristics,suchasbeing
ofaveragequalityforthetypedescribedandbeingfitfortheordinarypurposesforwhichtheyare
intended.

Animpliedwarrantyoffitnessforaparticularpurposeiscreatedwheneverasellerknowsorhas
reasontoknowthatthebuyerisrelyingonthesellersknowledgeandskilltoselectaproductfor
thebuyersparticularpurposes.

UnderUCCArticle2,theselleralsowarrantsthatheisconveyinggoodtitleandthatthegoodsare
freeofanyrightfulclaimbyathirdperson.

UCCArticle2permitssellerstoexcludeordisclaimwarrantiesinwholeorinpart.Thusaseller
mayexcludeexpresswarranties.Hemayalsodisclaimmanyimpliedwarrantiesforexample,by
notingthatthesaleisasis.TheMagnusonMossActsetsoutcertaintypesofinformationthat
mustbeincludedinanywrittenwarranty.Theactrequiresthemanufacturerorsellertolabelthe
warrantyaseitherfullorlimiteddependingonwhattypesofdefectsarecoveredandwhatthe
customermustdotoobtainrepairorreplacement.Theactalsoabolishesphantomwarranties.

Privityoncestoodasabartorecoveryinsuitsbroughtbythoseoneormorestepsremovedinthe
distributionchainfromthepartywhobreachedawarranty.Butthenearlyuniversaltrendinthe
statecourtshasbeentoabolishprivityasadefense.

Becausevariousimpedimentsstandinthewayofwarrantysuits,courtshaveadoptedatorttheory
ofstrictliability,underwhichasellerisliableforinjuriesresultingfromthesaleofanyproductina
defectiveconditionifitisunreasonablydangeroustotheuserorconsumer.Typicalissuesinstrict
liabilitycasesarethese:Isthedefendantasellerengagedinthebusinessofselling?Wasthe
productsoldinadefectivecondition?Wasitunreasonablydangerous,eitheronitsfaceorbecause
ofafailuretowarn?Didtheproductreachtheconsumerinanunchangedcondition?Strictliability
appliesregardlessofhowcarefulthesellerwasandregardlessofhislackofcontractualrelation
withtheconsumeroruser.

Manufacturerscanalsobeheldliablefornegligencemostoftenforfaultydesignofproductsand
inadequatewarningsaboutthehazardsofusingtheproduct.

Theproductsliabilityrevolutionpromptedmanystatelegislaturestoenactcertainlawslimitingto
somedegreethemanufacturersresponsibilityfordefectiveproducts.Theselawsincludestatutes
ofreposeandprovideanumberofotherdefenses.

EXERCISES
1. RalphsHardwareupdateditsaccountingsystemandagreedtopurchaseacomputersystemfrom
amanufacturer,BitsandBytes(BB).Duringcontractnegotiations,BBssalesrepresentative
promisedthatthesystemwasA1andperfect.However,thewrittencontract,whichthe
partieslatersigned,disclaimedallwarranties,expressandimplied.Afterinstallationthecomputer
producedonlyrandomnumbersandletters,ratherthanthedesiredaccountinginformation.IsBB
liableforbreachinganexpresswarranty?Why?
2. Kateownedasmallgrocerystore.OnedayJohnwenttothestoreandpurchasedacanofchipdip
thatwas,unknowntoKateorJohn,adulterated.Johnbecameseriouslyillaftereatingthedipand
suedKatefordamagesonthegroundsthatshebreachedanimpliedwarrantyofmerchantability.
IsKateliable?Why?
3. Carrievisitedaneighborhoodstoretopurchasesomeham,whichasalespersoncutbymachinein

thestore.Thenextdayshemadeahamsandwich.Ineatingthesandwich,Carriebitintoapiece
ofcartilageintheham.Asaresult,Carrielostatooth,hadtoundergorootcanaltreatments,and
mustnowwearafullcoveragecrowntoreplacethetooth.Isthestoreliableforthedamage?
Why?
4. Clarence,abusinessexecutive,decidedtoholdagaragesale.Atthesale,hisneighborBetty
mentionedtoClarencethatshewasthecatcheronhercityleaguebaseballteamandwashaving
troublecatchingknuckleballpitches,whichrequiredaspecialcatchersmitt.Clarencepulledan
oldmittfromapileofitemsthatwereonsaleandsaid,Here,trythis.Bettypurchasedthemitt
butdiscoveredduringhernextgamethatitdidntwork.HasClarencebreachedanexpressor
impliedwarranty?Why?
5. Sarahpurchasedseveralelegantpictureframestohanginherdormroom.Shealsopurchaseda
packageofselfstickinghangers.Lateoneevening,whileSarahwasstudyingbusinesslawinthe
library,thehangerscamelooseandherframescamecrashingtothefloor.AfterSarahreturnedto
herroomanddiscoveredtherubble,sheexaminedtheboxinwhichthehangerswerepackaged
andfoundthefollowinglanguage:Therearenowarrantiesexceptforthedescriptiononthis
packageandspecificallythereisNOIMPLIEDWARRANTYOFMERCHANTABILITY.Assumingthe
hangersarenotoffair,average,ordinaryquality,wouldthehangercompanybeliablefor
breachinganimpliedwarrantyofmerchantability?Why?
6. AthirteenyearoldboyreceivedaGolfingGizmoadevicefortrainingnovicegolfersasagift
fromhismother.Thelabelontheshippingcartonandthecoveroftheinstructionbookleturged
playerstodrivetheballwithfullpowerandfurtherstated:COMPLETELYSAFEBALLWILLNOT
HITPLAYER.Butwhileusingthedevice,theboywashitintheeyebytheball.Shouldlackof
privitybeadefensetothemanufacturer?ThemanufacturerarguedthattheGizmowasa
completelysafetrainingdeviceonlywhentheballishitsquarely,andthedefendantargued
plaintiffscouldnotreasonablyexpecttheGizmotobecompletelysafeunderallcircumstances,
particularlythoseinwhichtheplayerhitsbeneaththeball.Whatlegalargumentisthis,andisit
valid?
7. AbankrepossessedaboatandsoldittoDonald.DuringthenegotiationswithDonald,Donald
statedthathewantedtousetheboatforcharterserviceinFlorida.Thebankofficershandlingthe
salemadenorepresentationsconcerningtheboatduringnegotiations.Donaldlaterdiscovered
thattheboatwasdefectiveandsuedthebankforbreachofwarranty.Isthebankliable?Why?
8. TomAnderson,theproducemanagerattheThriftwayMarketinPasco,Washington,removeda
boxofbananasfromthetopofastackofproduce.Whenhereachedforalugofradishesthathad
beenunderthebananas,asixinchspiderHeteropodavenatoria,commonlycalledabanana
spiderleapedfromsomewetburlapontohislefthandandbithim.Ninemonthslaterhediedof
heartfailure.HiswifebroughtanactionagainstAssociatedGrocers,parentcompanyofThriftway
Market,ontheoriesof(1)strictproductsliabilityunderRestatement,Section402(a);(2)breachof
theimpliedwarrantyofmerchantability;and(3)negligence.Thetrialcourtruledagainstthe
plaintiffonallthreetheories.Wasthatacorrectruling?Explain.
9. AbrokenwaterpipefloodedaswitchboardatRCAsoffice.Thefloodtrippedtheswitchboard
circuitbreakersanddeactivatedtheairconditioningsystem.Threeemployeeswereassignedto
fixit:anelectricaltechnicianwithtwelveyearsonthejobtraining,alicensedelectrician,andan
electricalengineerwithtwentyyearsofexperiencewhohadstudiedpowerengineeringincollege.
Theyswitchedononeofthecircuitbreakers,althoughtheengineersaidheknewthatonewas
supposedtotesttheoperationofawetswitchboardbeforeputtingitbackintouse.Therewasa
snapandeveryoneranfromtheroomupthestairsandabigballoffirecameafterthemup
thestairs.Theplaintiffsarguedthatthemanufacturerofthecircuitbreakerhadbeennegligentin
failingtogiveRCAadequatewarningsaboutthecircuitbreakers.Howshouldthecourtrule,and
onwhattheoryshoulditrule?
10. PlaintiffsbusinesswastoconvertvanstoRVs,andforthispurposeithaduseda3Madhesiveto
laminatecarpetingtothevanwalls.Thisadhesive,however,failedtoholdthefabricinplacein
hotweather,soPlaintiffapproachedNorthernAdhesiveCo.,amanufacturerofadhesives,tofind
abetterone.PlaintifftoldNorthernwhyitwantedtheadhesive,andNorthernDefendantsent
severalsamplestoPlaintifftoexperimentwith.NortherntoldPlaintiffthatoneoftheadhesives,
Adhesive7448,wasamatchforthe3Mproductthatpreviouslyfailed.Plaintifftestedthe
samplesinacoolplantanddeterminedthatAdhesive7448wasbetterthanthe3Mproduct.
Defendanthadsaidnothingexceptthatwhattheywouldshipwouldbelikethesample.Itwould
bethesamechemistry.Plaintiffusedtheadhesiveduringthefallandwinter;byspring
complaintsofdelaminationcamein:Adhesive7448failedjustasthe3Mproducthad.Over500
vanshadtoberepaired.HowshouldthecourtruleonPlaintiffsclaimsofbreachof(1)express

warranty,(2)impliedwarrantyofmerchantability,and(3)impliedwarrantyoffitnessfora
particularpurpose?

SELFTESTQUESTIONS
1.

Inaproductsliabilitycase
a. onlytorttheoriesaretypicallyasserted
b. bothtortandcontracttheoriesaretypicallyasserted
c. strictliabilityisassertedonlywhennegligenceisnotasserted
d. breachofwarrantyisnotassertedalongwithstrictliability

2.

Animpliedwarrantyofmerchantability
a. iscreatedbyanexpresswarranty
b. iscreatedbylaw
c. isimpossibleforasellertodisclaim
d. canbedisclaimedbyaselleronlyifthedisclaimerisinwriting

3.

Apossibledefensetobreachofwarrantyis
a. lackofprivity
b. absenceofanexpresswarranty
c. disclaimerofimpliedwarranties
d. alloftheabove

4.

UnderthestrictliabilityruleinRestatement,Section402A,thesellerisliableforall
injuriesresultingfromaproduct
a. eventhoughallpossiblecarehasbeenexercised
b. regardlessofthelackofacontractwiththeuser
c. inbothoftheabovesituations
d. innoneoftheabovesituations

5.

Anindividualsellinghercarcouldbeliable
a. forbreachingtheimpliedwarrantyofmerchantability
b. underthestrictliabilitytheory
c. forbreachingtheimpliedwarrantyoffitness
d. undertwooftheabove

SELFTESTANSWERS
1. b
2. b
3. d
4. c
5. d

Previous
Chapter

TableofContents

NextChapter