Chapter 22

Product Liability

 

Objectives:

1. List types of warranties

2. Defenses to warranty actions

3. Describe strict product liability

4. Defenses to strict liability

5. Compare strict liability and implied warranty of merchantability

 

I. Warranties

          A. Types of Warranties

                   1. Warranty of title

                   2. Express warranty

                             a. Creation: Promise, description, sample

                             b. Basis of bargain

                             Felley v. Singleton, p. 406.

                             Facts: B buys car from S. S says it's a good car, no problems with brakes.  There are a couple of other problems. Car has 126,000 miles and sells for $5800. Car swiftly develops brake and clutch problems.

                             Issue: Did S give express warranty by saying car was in good condition?

                             Holding: Yes. B asked and S said the car was in good mechanical condition.

                             Note: Court does not seem to require B to prove S knew of the problem.

                   3. Implied warranty

                             a. Creation, by circumstances and by law

                             b. Implied warranty of merchantability (merchants only)

                             c. Implied warranty of fitness for a particular purpose (every seller)

                             In re L.B. Trucking, p. 409.

                             Facts: D owned both a farm and trucking company. D hires company to provide herbicide for fields, relying on their expertise. The herbicide turns out to be the wrong kind, and weeds take over. Farm does poorly compared to other farms in the are. Both of D's businesses go BK. T'ee seeks damages on behalf of BK estate.

                             Issue: Did D have benefit of some kind of warranty?

                             Holding: Yes. Both express and implied. Company promised to take care of weeds, but failed.

                   4. Obstacles

                             a. Disclaimer of warranties

                             b. Express exclusions

                   Womco v. Navistar, p. 411.

                   Facts: Company buys a bunch of IH trucks and tractors. They have overheating problems, which turn out to be from having radiators that are too small. Navistar relied on disclaimer of implied warranties.

                   Issue: Did Navistar validly disclaim its warranties?

                   Holding: No. Navistar did not make warranty info available prior to purchase. Apparently, it was not part of the contract.

                             c. Buyer's examination. Warranty does not apply to readily apparent defects.

                   5. Limitation on warranties

                             a. Privity of contract

                             b. Notice of breach of warranty

                             c. Plaintiff's conduct, No contrib., some states comparative fault, assumption of the risk applies

 

II. Strict Liability in Tort

          A. Same elements as negligence, except absolute duty if plaintiff proves product is defective and unreasonably dangerous

          B. Merchant sellers

          C. Defective Condition

                   1. Manufacturing defect

                   2. Design defect

                   3. Failure to warn

                   Dunne v. Wal-Mart, p. 416.

                   Facts: P buys DP exercise bike from Wal-Mart. She ways 500 lbs. She gets on bike, it breaks, and she falls and suffers injury. Companies introduced evidence that industry standard did not require warning if equipment could hold people up to 250 lbs. That covered 98.5% of population.

                   Issue: Were the defendants liable for failure to warn that 500 lb. person was too big for bike?

                   Holding: Yes. Industry standard does not control, and it would be easy to put in directions that people over 250 lbs. should not use it.

          D. Unreasonably dangerous condition

                   1. Item that is inherently dangerous is not automatically unreasonably dangerous.

                   Greene v. Boddie-Noell, p. 418.

                   Facts: P buys coffee at Hardees drive through. Car hits a bump, and she spills on her lap, causing severe injuries.

                   Issue: Was the coffee unreasonably dangerous?

                   Holding: No. P must show seller fell below recognized standard. Hot coffee is hot.

                   Note: Is this really an assumption of the risk case?

          E. Obstacles to recovery

                   1. Disclaimers. Rarely enforced, and then only in commercial cases

                   2. Privity. Not a limit

                   3. Plaintiff's conduct

                             a. Contributory negligence. Generally, not a defense

                             b. Comparative negligence. Most courts allow comparative negligence defense to strict liability.

                             c. Misuse or abuse of product

                             d. Alteration

                   4. Statute of Repose

                   5. Statutory limits on punitive damages