{"id":652,"date":"2015-04-22T22:37:08","date_gmt":"2015-04-22T22:37:08","guid":{"rendered":"https:\/\/courses.candelalearning.com\/masterybusiness1xngcxmaster\/?post_type=chapter&#038;p=652"},"modified":"2015-07-11T06:38:37","modified_gmt":"2015-07-11T06:38:37","slug":"reading-product-liability","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/clinton-introbusinesswmopen\/chapter\/reading-product-liability\/","title":{"raw":"Reading: Product Liability","rendered":"Reading: Product Liability"},"content":{"raw":"<div id=\"collins-ch16_s04_n01\" class=\"im_learning_objectives im_editable im_block\">\r\n<h2 class=\"im_title\">Product Liability<\/h2>\r\n<p class=\"im_title\">In addition to intentional and negligence torts, U.S. law recognizes a third category of torts: <span class=\"im_margin_term\"><span class=\"im_glossterm\">strict liability torts<\/span><\/span> involve actions that are inherently dangerous and for which a party may be liable no matter how carefully he or she (or it) performs them. To better appreciate the issues involved in cases of strict liability, let\u2019s take up the story of your legal adventures in the world of business, where we left off:<\/p>\r\n\r\n<\/div>\r\n<p style=\"padding-left: 30px;\">Having escaped the house-painting business relatively unscathed, you head back home to rethink your options for gainful employment over your summer vacation. You\u2019ve stored your only remaining capital assets\u2014the two ladders and the platform that you\u2019d used for scaffolding\u2014in your father\u2019s garage, where one afternoon, your uncle notices them.<\/p>\r\n<p style=\"padding-left: 30px;\">Examining one of the ladders, he asks you how much weight it\u2019s designed to hold, and you tell him what the department manager at Ladders \u2019N\u2019 Things told you\u2014three hundred pounds per rung. He nods as if this is a good number, and, sensing that he might want to buy them, you hasten to add that though you got them at a cut-rate price because of a little rust, they\u2019re virtually brand-new. As it turns out, he doesn\u2019t want to buy them, but he does offer to pay you $35 an hour to take them to his house and help him put up new roofing. He\u2019s easygoing, he\u2019s family, and he probably won\u2019t sue you for anything, so you jump at the opportunity.<\/p>\r\n<p style=\"padding-left: 30px;\">Everything goes smoothly until day two, when you\u2019re working on the scaffolding two stories off the ground. As you\u2019re in the process of unwrapping a bundle of shingles, one of the ladders buckles, bringing down the platform and depositing you on your uncle\u2019s stone patio with a cervical fracture.<\/p>\r\n<p style=\"padding-left: 30px;\">Fortunately, there\u2019s no damage to your spinal cord, but you\u2019re in pain and you need surgery. Now it\u2019s your turn to sue somebody. But whom? And for what?<\/p>\r\n\r\n<div id=\"collins-ch16_s04_s01\" class=\"im_section\">\r\n<h2 class=\"im_title im_editable im_block\">Pursuing a Claim of Product Liability<\/h2>\r\nIt comes as no surprise when your lawyer advises an action for <span class=\"im_margin_term\"><span class=\"im_glossterm\">product liability<\/span><\/span>\u2014a claim of injury suffered because of a defective product (in your case, of course, the ladder). The legal concept of product liability, he explains, developed out of the principles of tort law. He goes on to say that in cases of product liability, there are three grounds for pursuing a claim and seeking damages\u2014what lawyers call three \u201ctheories of recovery\u201d:\r\n<ul id=\"collins-ch16_s04_s01_l01\" class=\"im_itemizedlist im_editable im_block\">\r\n\t<li>Negligence<\/li>\r\n\t<li>Strict liability<\/li>\r\n\t<li>Breach of warranty<\/li>\r\n<\/ul>\r\nAs the plaintiff, he emphasizes, you\u2019ll want to use as many of these three grounds as possible<span id=\"fwk-collins-fn16_020\" class=\"im_footnote\">.<\/span>\r\n<div id=\"collins-ch16_s04_s01_s01\" class=\"im_section\">\r\n<h3 class=\"im_title im_editable im_block\">Grounds of Negligence<\/h3>\r\nIn selecting defendants in your case, you\u2019ll start with the manufacturer of the ladder. Manufacturer\u2019s negligence\u2014carelessness\u2014can take three different forms:<span id=\"fwk-collins-fn16_021\" class=\"im_footnote\"><\/span>\r\n<ul id=\"collins-ch16_s04_s01_s01_l01\" class=\"im_itemizedlist im_editable im_block\">\r\n\t<li><em class=\"im_emphasis\">Negligent failure to warn<\/em>. The manufacturer may be liable if the company knew (or should have known) that, without a warning, the ladder would be dangerous in ordinary use or in any reasonably foreseeable use. It\u2019s possible, for example, that you made the ladder\u2019s collapse more likely by placing it at a less than optimal angle from the wall of the house. That mistake, however, is a reasonably foreseeable use of the product, and if the manufacturer failed to warn you of this possibility, the company is liable for failure to warn.\r\n<ul id=\"collins-ch16_s04_s01_s01_l10\" class=\"im_itemizedlist\">\r\n\t<li><em class=\"im_emphasis\">Negligent failure to warn<\/em>. The manufacturer may be liable if the company knew (or should have known) that, without a warning, the ladder would be dangerous in ordinary use or in any reasonably foreseeable use. It\u2019s possible, for example, that you made the ladder\u2019s collapse more likely by placing it at a less than optimal angle from the wall of the house. That mistake, however, is a reasonably foreseeable use of the product, and if the manufacturer failed to warn you of this possibility, the company is liable for failure to warn.<span id=\"fwk-collins-fn16_022\" class=\"im_footnote\"><\/span><\/li>\r\n\t<li><em class=\"im_emphasis\">Negligent design<\/em>. As the term suggests, this principle applies to defectively designed products. In law, a product is defective if, despite any warnings, the risk of harm outweighs its usefulness in doing what it\u2019s designed to do. If, for example, your ladder left the manufacturer\u2019s facility with rivets that were likely to break when weight was placed on it, the ladder may be judged defective in its design.<\/li>\r\n<\/ul>\r\n<\/li>\r\n\t<li><em class=\"im_emphasis\">Negligent design<\/em>. As the term suggests, this principle applies to defectively designed products. In law, a product is defective if, despite any warnings, the risk of harm outweighs its usefulness in doing what it\u2019s designed to do. If, for example, your ladder left the manufacturer\u2019s facility with rivets that were likely to break when weight was placed on it, the ladder may be judged defective in its design.<\/li>\r\n\t<li><em class=\"im_emphasis\">Negligence per se<\/em>. The manufacturer may be liable if the ladder fails to meet legal standards. According to standards set by the Occupational Safety and Health Administration (OSHA), for example, the rungs on your ladder should be corrugated or covered with skid-resistant material to minimize slipping. If you\u2019re injured because they\u2019re not, the manufacturer may be liable on grounds of negligence per se.<span id=\"fwk-collins-fn16_023\" class=\"im_footnote\"><\/span><\/li>\r\n<\/ul>\r\nIf you decide to apply the concept of negligence in suing the manufacturer of the ladder, you must prove the four elements of a negligence case that we detailed above\u2014namely, the following:\r\n<ol id=\"collins-ch16_s04_s01_s01_l03\" class=\"im_orderedlist im_editable im_block\">\r\n\t<li>That the defendant (the manufacturer) owed you a duty of care<\/li>\r\n\t<li>That the defendant breached this duty of care<\/li>\r\n\t<li>That the defendant\u2019s breach of duty of care caused injury to you or your property<\/li>\r\n\t<li>That the defendant\u2019s action did in fact cause the injury in question<\/li>\r\n<\/ol>\r\n<\/div>\r\n<div id=\"collins-ch16_s04_s01_s02\" class=\"im_section\">\r\n<h3 class=\"im_title im_editable im_block\">Grounds of Strict Liability<\/h3>\r\nFor the sake of argument, let\u2019s say that your lawyer isn\u2019t very confident about pursuing a claim of negligence against the manufacturer of your ladder. The company doesn\u2019t appear to have been careless in any of the three forms prescribed by law, and it will in any case be difficult to demonstrate all four elements required in negligence cases. He suggests instead that you proceed on grounds of strict liability, pointing out that the principle of strict liability often makes the plaintiff\u2019s legal task less exacting. But (you ask) if the company wasn\u2019t <em class=\"im_emphasis\">negligent<\/em>, how can it be <em class=\"im_emphasis\">liable<\/em>, either \u201cstrictly\u201d or in any other sense? Under the <em class=\"im_emphasis\">doctrine of strict liability in tort<\/em>, he replies, you don\u2019t have to prove negligence on the manufacturer\u2019s part. He goes on to explain that under this doctrine, your right to compensation for injury is based on two legal suppositions:\r\n<ol id=\"collins-ch16_s04_s01_s02_l01\" class=\"im_orderedlist im_editable im_block\">\r\n\t<li>Certain products put people at risk of injury no matter how much care is taken to prevent injury.<\/li>\r\n\t<li>Consumers should have some means of seeking compensation if they\u2019re injured while using these products.<\/li>\r\n<\/ol>\r\nDay in and day out, of course, people use ladders quite successfully. According to the Consumer Product Safety Commission (CPSC), however, every year accidents involving ladders cause three hundred deaths and one hundred thirty thousand injuries requiring emergency medical treatment. In a certain number of these instances, the ladder is defective, and in cases of strict liability, it doesn\u2019t matter how much care was taken by the manufacturer to prevent defects. This seems a little harsh to you, but your lawyer explains that, in establishing the doctrine of strict liability in tort, the court cited the following two reasons for making the grounds of liability so strict:<span id=\"fwk-collins-fn16_026\" class=\"im_footnote\"><\/span>\r\n<ol id=\"collins-ch16_s04_s01_s02_l02\" class=\"im_itemizedlist im_editable im_block\">\r\n\t<li>The manufacturer can protect itself by taking steps to anticipate and prevent hazardous product features, but the public can\u2019t.<\/li>\r\n\t<li>The manufacturer can protect itself by purchasing insurance and passing the cost on to the public in the form of higher product prices. Again, the public enjoys no such protection.<\/li>\r\n<\/ol>\r\nUnder these conditions, the manufacturer is willing to take a risk\u2014namely, the risk of making available a product that\u2019s potentially dangerous, especially if defective. The manufacturer thus takes the first step in a process whereby this product reaches a consumer who may suffer \u201coverwhelming misfortune\u201d by using it, especially if it has become defective <em class=\"im_emphasis\">during the process that takes it from the manufacturer to the user<\/em>. \u201cEven if he is not negligent in the manufacture of the product,\u201d declared the court, the manufacturer \u201cis <em class=\"im_emphasis\">responsible for its reaching the market<\/em>\u201d (italics added). There\u2019s no way of telling when or how a product will become defective or of predicting how or how many people will be injured by it. Defects and injuries, however, are \u201cconstant\u201d dangers when people use such products, and users must therefore have some form of \u201cconstant protection\u201d under law. That protection is established by the doctrine of strict liability in tort. Why should the manufacturer be held responsible for such defects and injuries? Because, reasoned the court, \u201cthe manufacturer is best situated to afford . . . protection.\u201d\r\n\r\nAnd this, explains your lawyer, is why you\u2019re going to sue the manufacturer of your ladder on grounds of strict liability.\r\n<div id=\"collins-ch16_s04_s01_s02_s01\" class=\"im_section\">\r\n<h2 class=\"im_title im_editable im_block\">Strict Liability in the Distribution Chain<\/h2>\r\nYou\u2019re excited about the prospect of recovering monetary damages from the manufacturer of your ladder, but you continue to wonder (on completely hypothetical grounds, of course) whether the doctrine of strict liability is as fair as it should be. What about all the other businesses involved in the process of getting the product from the manufacturer to the user\u2014especially the one that did in fact introduce the defect that caused all the trouble? Does the doctrine of strict liability relieve them of all liability in the case? Indeed not, your lawyer assures you. The concept of strict liability not only provides more practical grounds for suing the manufacturer but also supports your right to pursue claims against members of the manufacturer\u2019s distribution chain. That\u2019s one reason, he points out, why product-liability lawsuits against businesses that sell such \u201cunreasonably dangerous\u201d products as ladders (or even deliver them to worksites) went up a hundredfold between 1950 and 2001, to a total of $205 billion.<span id=\"fwk-collins-fn16_028\" class=\"im_footnote\"><\/span>\r\n\r\nNow, let\u2019s say that your lawyer has given your defective ladder to a forensic laboratory in order to find out exactly what caused it to buckle and you to fall. As it turns out, the clue to the problem is the small patch of rust that brought down the price you paid for the ladder when you bought it. The ladder, concludes the lab, had for some time been in close proximity to liquid nitrogen, which can corrode various metals, including aluminum. Sure enough, further investigation reveals that the entire shipment of ladders had been stored for nearly two years in a Ladders \u2019N\u2019 Things warehouse next to an inventory of liquid-nitrogen\u2013based fertilizer. Your lawyer advises you that, in addition to your strict-liability case against the manufacturer of the ladder, you have a strong negligence case against the retailer from which you purchased it.\r\n\r\n<a href=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1120\/2015\/05\/02031750\/negligence.jpg\"><img class=\" wp-image-2091 aligncenter\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1120\/2015\/05\/02031750\/negligence-1024x1009.jpg\" alt=\"Negligence vs. Strict liability. In a negligence lawsuit, the consumer injured by a defective product can only take action against the negligent party. If the manufacturer made a defective product, the wholesaler and retailer are not liable. In a strict liability lawsuit, all parties in the distribution chain (the manufacturer, wholesaler, and retailer) are liable.\" width=\"575\" height=\"566\" \/><\/a>\r\n\r\n<\/div>\r\n<\/div>\r\n<div id=\"collins-ch16_s04_s01_s03\" class=\"im_section\">\r\n<h2 class=\"im_title im_editable im_block\">Grounds of Breach of Warranty<\/h2>\r\nMoreover, adds your lawyer, there\u2019s one more matter to be considered in determining liability for your injury. Had not the department manager at Ladders \u2019N\u2019 Things assured you that the ladder would support a weight of three hundred pounds per rung? Your uncle had asked you about the weight capacity of the ladder because he knew that the roofing job meant putting heavy bundles of shingles on the scaffold. A ladder that holds three hundred pounds per rung is a Type IA extra-heavy\u2013duty ladder suitable for such jobs as roofing and construction. According to the lab, however, the construction of your ladder is that of a Type II medium-duty\u2013commercial ladder made for lighter-weight tasks. The manager at Ladders \u2019N\u2019 Things, explains your lawyer, may have been guilty of <em class=\"im_emphasis\">breach of warranty<\/em>\u2014yet further grounds for holding the retailer liable in your product-liability case.\r\n<div id=\"collins-ch16_s04_s01_s03_s01\" class=\"im_section\">\r\n<h2 class=\"im_title im_editable im_block\">Key Takeaways<\/h2>\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n<div id=\"collins-ch16_s04_s02\" class=\"im_section\">\r\n<div id=\"collins-ch16_s04_s02_s02\" class=\"im_section\">\r\n<div id=\"collins-ch16_s04_s02_s02_n01\" class=\"im_key_takeaways im_editable im_block\">\r\n<div class=\"keytakeaways\">\r\n\t<h3>KEY TAKEAWAYS<\/h3>\r\n<ul id=\"collins-ch16_s04_s02_s02_l01\" class=\"im_itemizedlist\">\r\n\t<li><strong class=\"im_emphasis im_bold\">Product liability<\/strong> is a claim of injury suffered because of a defective product. In such cases, there are three grounds for pursuing a claim and seeking damages (that is, three \u201ctheories of recovery\u201d): negligence, strict liability, and breach of warranty. Most plaintiffs use as many of these three grounds as possible.<\/li>\r\n\t<li>In a product-liability case, a manufacturer\u2019s negligence can take three different forms:\r\n<ul>\r\n\t<li><em class=\"im_emphasis\">Negligent failure to warn<\/em>. The manufacturer may be liable if the company knew (or should have known) that, without a warning, the ladder would be dangerous in ordinary use or in any reasonably foreseeable use.<\/li>\r\n\t<li><em class=\"im_emphasis\">Negligent design<\/em>. A product is defective if, despite any warnings, the risk of harm outweighs its usefulness in doing what it\u2019s designed to do.<\/li>\r\n\t<li><em class=\"im_emphasis\">Negligence per se<\/em>. The manufacturer may be liable if the ladder fails to meet legal standards.<\/li>\r\n<\/ul>\r\n<\/li>\r\n\t<li><strong class=\"im_emphasis im_bold\">Strict liability torts<\/strong> involve actions that are inherently dangerous and for which a party may be liable no matter how carefully he or she performs them. Under the <em class=\"im_emphasis\">doctrine of strict liability in tort<\/em>, the plaintiff doesn\u2019t have to prove negligence on the manufacturer\u2019s part, nor does it matter how much care was taken by the manufacturer to prevent defects. The doctrine of strict liability rests on two legal conclusions, as follows:\r\n<ul>\r\n\t<li>The manufacturer can protect itself by taking steps to anticipate and prevent hazardous product features, but the public can\u2019t.<\/li>\r\n\t<li>The manufacturer can protect itself by purchasing insurance and passing the cost on to the public in the form of higher product prices; the consumer has no such protection. The manufacturer is liable under the doctrine of strict liability for any harm that comes to a person from using the product, especially if it has become defective during the process of getting the product from the manufacturer to the user. The concept of strict liability also supports the plaintiff\u2019s right to pursue claims against members of the manufacturer\u2019s distribution chain.<\/li>\r\n<\/ul>\r\n<\/li>\r\n\t<li>Breaching a <strong class=\"im_emphasis im_bold\">warranty<\/strong>\u2014a guarantee that a product meets certain standards of performance\u2014is grounds for recovering in a product-liability case. An <strong class=\"im_emphasis im_bold\">express warranty<\/strong> is created when a seller affirms that a product meets certain standards of quality, description, performance, or condition. An <strong class=\"im_emphasis im_bold\">implied warranty<\/strong> arises automatically out of a transaction and takes one of two forms: (1) an <em class=\"im_emphasis\">implied warranty of merchantability<\/em> (which states that the product is reasonably fit for ordinary use) and (2) an <em class=\"im_emphasis\">implied warranty of fitness for a particular purpose<\/em> (which states that the product is fit for some specific use).<\/li>\r\n\t<li><strong class=\"im_emphasis im_bold\">Agency<\/strong> is a legal relationship between two parties in which one party acts on behalf of, and under the control of, another. In a <em class=\"im_emphasis\">principal\u2013agent relationship<\/em>, the <em class=\"im_emphasis\">agent<\/em> is acting on behalf of the <em class=\"im_emphasis\">principal<\/em>. Employer-employee relationships are also agency relationships.<\/li>\r\n\t<li>The primary goal of tort law is restoring the victim to the condition that he or she would have been in had no injury ever taken place. Likewise, the primary goal of contract law is restoring the nonbreaching party to the condition that he or she would have been in had the contract not been breached. To achieve these goals, the legal system provides for monetary awards in the form of <strong class=\"im_emphasis im_bold\">compensatory damages<\/strong>. Another form of monetary award, <strong class=\"im_emphasis im_bold\">punitive damages<\/strong>, is intended to punish, to deter similar injurious conduct in the future, or to set an example.<\/li>\r\n<\/ul>\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n<\/div>","rendered":"<div id=\"collins-ch16_s04_n01\" class=\"im_learning_objectives im_editable im_block\">\n<h2 class=\"im_title\">Product Liability<\/h2>\n<p class=\"im_title\">In addition to intentional and negligence torts, U.S. law recognizes a third category of torts: <span class=\"im_margin_term\"><span class=\"im_glossterm\">strict liability torts<\/span><\/span> involve actions that are inherently dangerous and for which a party may be liable no matter how carefully he or she (or it) performs them. To better appreciate the issues involved in cases of strict liability, let\u2019s take up the story of your legal adventures in the world of business, where we left off:<\/p>\n<\/div>\n<p style=\"padding-left: 30px;\">Having escaped the house-painting business relatively unscathed, you head back home to rethink your options for gainful employment over your summer vacation. You\u2019ve stored your only remaining capital assets\u2014the two ladders and the platform that you\u2019d used for scaffolding\u2014in your father\u2019s garage, where one afternoon, your uncle notices them.<\/p>\n<p style=\"padding-left: 30px;\">Examining one of the ladders, he asks you how much weight it\u2019s designed to hold, and you tell him what the department manager at Ladders \u2019N\u2019 Things told you\u2014three hundred pounds per rung. He nods as if this is a good number, and, sensing that he might want to buy them, you hasten to add that though you got them at a cut-rate price because of a little rust, they\u2019re virtually brand-new. As it turns out, he doesn\u2019t want to buy them, but he does offer to pay you $35 an hour to take them to his house and help him put up new roofing. He\u2019s easygoing, he\u2019s family, and he probably won\u2019t sue you for anything, so you jump at the opportunity.<\/p>\n<p style=\"padding-left: 30px;\">Everything goes smoothly until day two, when you\u2019re working on the scaffolding two stories off the ground. As you\u2019re in the process of unwrapping a bundle of shingles, one of the ladders buckles, bringing down the platform and depositing you on your uncle\u2019s stone patio with a cervical fracture.<\/p>\n<p style=\"padding-left: 30px;\">Fortunately, there\u2019s no damage to your spinal cord, but you\u2019re in pain and you need surgery. Now it\u2019s your turn to sue somebody. But whom? And for what?<\/p>\n<div id=\"collins-ch16_s04_s01\" class=\"im_section\">\n<h2 class=\"im_title im_editable im_block\">Pursuing a Claim of Product Liability<\/h2>\n<p>It comes as no surprise when your lawyer advises an action for <span class=\"im_margin_term\"><span class=\"im_glossterm\">product liability<\/span><\/span>\u2014a claim of injury suffered because of a defective product (in your case, of course, the ladder). The legal concept of product liability, he explains, developed out of the principles of tort law. He goes on to say that in cases of product liability, there are three grounds for pursuing a claim and seeking damages\u2014what lawyers call three \u201ctheories of recovery\u201d:<\/p>\n<ul id=\"collins-ch16_s04_s01_l01\" class=\"im_itemizedlist im_editable im_block\">\n<li>Negligence<\/li>\n<li>Strict liability<\/li>\n<li>Breach of warranty<\/li>\n<\/ul>\n<p>As the plaintiff, he emphasizes, you\u2019ll want to use as many of these three grounds as possible<span id=\"fwk-collins-fn16_020\" class=\"im_footnote\">.<\/span><\/p>\n<div id=\"collins-ch16_s04_s01_s01\" class=\"im_section\">\n<h3 class=\"im_title im_editable im_block\">Grounds of Negligence<\/h3>\n<p>In selecting defendants in your case, you\u2019ll start with the manufacturer of the ladder. Manufacturer\u2019s negligence\u2014carelessness\u2014can take three different forms:<span id=\"fwk-collins-fn16_021\" class=\"im_footnote\"><\/span><\/p>\n<ul id=\"collins-ch16_s04_s01_s01_l01\" class=\"im_itemizedlist im_editable im_block\">\n<li><em class=\"im_emphasis\">Negligent failure to warn<\/em>. The manufacturer may be liable if the company knew (or should have known) that, without a warning, the ladder would be dangerous in ordinary use or in any reasonably foreseeable use. It\u2019s possible, for example, that you made the ladder\u2019s collapse more likely by placing it at a less than optimal angle from the wall of the house. That mistake, however, is a reasonably foreseeable use of the product, and if the manufacturer failed to warn you of this possibility, the company is liable for failure to warn.\n<ul id=\"collins-ch16_s04_s01_s01_l10\" class=\"im_itemizedlist\">\n<li><em class=\"im_emphasis\">Negligent failure to warn<\/em>. The manufacturer may be liable if the company knew (or should have known) that, without a warning, the ladder would be dangerous in ordinary use or in any reasonably foreseeable use. It\u2019s possible, for example, that you made the ladder\u2019s collapse more likely by placing it at a less than optimal angle from the wall of the house. That mistake, however, is a reasonably foreseeable use of the product, and if the manufacturer failed to warn you of this possibility, the company is liable for failure to warn.<span id=\"fwk-collins-fn16_022\" class=\"im_footnote\"><\/span><\/li>\n<li><em class=\"im_emphasis\">Negligent design<\/em>. As the term suggests, this principle applies to defectively designed products. In law, a product is defective if, despite any warnings, the risk of harm outweighs its usefulness in doing what it\u2019s designed to do. If, for example, your ladder left the manufacturer\u2019s facility with rivets that were likely to break when weight was placed on it, the ladder may be judged defective in its design.<\/li>\n<\/ul>\n<\/li>\n<li><em class=\"im_emphasis\">Negligent design<\/em>. As the term suggests, this principle applies to defectively designed products. In law, a product is defective if, despite any warnings, the risk of harm outweighs its usefulness in doing what it\u2019s designed to do. If, for example, your ladder left the manufacturer\u2019s facility with rivets that were likely to break when weight was placed on it, the ladder may be judged defective in its design.<\/li>\n<li><em class=\"im_emphasis\">Negligence per se<\/em>. The manufacturer may be liable if the ladder fails to meet legal standards. According to standards set by the Occupational Safety and Health Administration (OSHA), for example, the rungs on your ladder should be corrugated or covered with skid-resistant material to minimize slipping. If you\u2019re injured because they\u2019re not, the manufacturer may be liable on grounds of negligence per se.<span id=\"fwk-collins-fn16_023\" class=\"im_footnote\"><\/span><\/li>\n<\/ul>\n<p>If you decide to apply the concept of negligence in suing the manufacturer of the ladder, you must prove the four elements of a negligence case that we detailed above\u2014namely, the following:<\/p>\n<ol id=\"collins-ch16_s04_s01_s01_l03\" class=\"im_orderedlist im_editable im_block\">\n<li>That the defendant (the manufacturer) owed you a duty of care<\/li>\n<li>That the defendant breached this duty of care<\/li>\n<li>That the defendant\u2019s breach of duty of care caused injury to you or your property<\/li>\n<li>That the defendant\u2019s action did in fact cause the injury in question<\/li>\n<\/ol>\n<\/div>\n<div id=\"collins-ch16_s04_s01_s02\" class=\"im_section\">\n<h3 class=\"im_title im_editable im_block\">Grounds of Strict Liability<\/h3>\n<p>For the sake of argument, let\u2019s say that your lawyer isn\u2019t very confident about pursuing a claim of negligence against the manufacturer of your ladder. The company doesn\u2019t appear to have been careless in any of the three forms prescribed by law, and it will in any case be difficult to demonstrate all four elements required in negligence cases. He suggests instead that you proceed on grounds of strict liability, pointing out that the principle of strict liability often makes the plaintiff\u2019s legal task less exacting. But (you ask) if the company wasn\u2019t <em class=\"im_emphasis\">negligent<\/em>, how can it be <em class=\"im_emphasis\">liable<\/em>, either \u201cstrictly\u201d or in any other sense? Under the <em class=\"im_emphasis\">doctrine of strict liability in tort<\/em>, he replies, you don\u2019t have to prove negligence on the manufacturer\u2019s part. He goes on to explain that under this doctrine, your right to compensation for injury is based on two legal suppositions:<\/p>\n<ol id=\"collins-ch16_s04_s01_s02_l01\" class=\"im_orderedlist im_editable im_block\">\n<li>Certain products put people at risk of injury no matter how much care is taken to prevent injury.<\/li>\n<li>Consumers should have some means of seeking compensation if they\u2019re injured while using these products.<\/li>\n<\/ol>\n<p>Day in and day out, of course, people use ladders quite successfully. According to the Consumer Product Safety Commission (CPSC), however, every year accidents involving ladders cause three hundred deaths and one hundred thirty thousand injuries requiring emergency medical treatment. In a certain number of these instances, the ladder is defective, and in cases of strict liability, it doesn\u2019t matter how much care was taken by the manufacturer to prevent defects. This seems a little harsh to you, but your lawyer explains that, in establishing the doctrine of strict liability in tort, the court cited the following two reasons for making the grounds of liability so strict:<span id=\"fwk-collins-fn16_026\" class=\"im_footnote\"><\/span><\/p>\n<ol id=\"collins-ch16_s04_s01_s02_l02\" class=\"im_itemizedlist im_editable im_block\">\n<li>The manufacturer can protect itself by taking steps to anticipate and prevent hazardous product features, but the public can\u2019t.<\/li>\n<li>The manufacturer can protect itself by purchasing insurance and passing the cost on to the public in the form of higher product prices. Again, the public enjoys no such protection.<\/li>\n<\/ol>\n<p>Under these conditions, the manufacturer is willing to take a risk\u2014namely, the risk of making available a product that\u2019s potentially dangerous, especially if defective. The manufacturer thus takes the first step in a process whereby this product reaches a consumer who may suffer \u201coverwhelming misfortune\u201d by using it, especially if it has become defective <em class=\"im_emphasis\">during the process that takes it from the manufacturer to the user<\/em>. \u201cEven if he is not negligent in the manufacture of the product,\u201d declared the court, the manufacturer \u201cis <em class=\"im_emphasis\">responsible for its reaching the market<\/em>\u201d (italics added). There\u2019s no way of telling when or how a product will become defective or of predicting how or how many people will be injured by it. Defects and injuries, however, are \u201cconstant\u201d dangers when people use such products, and users must therefore have some form of \u201cconstant protection\u201d under law. That protection is established by the doctrine of strict liability in tort. Why should the manufacturer be held responsible for such defects and injuries? Because, reasoned the court, \u201cthe manufacturer is best situated to afford . . . protection.\u201d<\/p>\n<p>And this, explains your lawyer, is why you\u2019re going to sue the manufacturer of your ladder on grounds of strict liability.<\/p>\n<div id=\"collins-ch16_s04_s01_s02_s01\" class=\"im_section\">\n<h2 class=\"im_title im_editable im_block\">Strict Liability in the Distribution Chain<\/h2>\n<p>You\u2019re excited about the prospect of recovering monetary damages from the manufacturer of your ladder, but you continue to wonder (on completely hypothetical grounds, of course) whether the doctrine of strict liability is as fair as it should be. What about all the other businesses involved in the process of getting the product from the manufacturer to the user\u2014especially the one that did in fact introduce the defect that caused all the trouble? Does the doctrine of strict liability relieve them of all liability in the case? Indeed not, your lawyer assures you. The concept of strict liability not only provides more practical grounds for suing the manufacturer but also supports your right to pursue claims against members of the manufacturer\u2019s distribution chain. That\u2019s one reason, he points out, why product-liability lawsuits against businesses that sell such \u201cunreasonably dangerous\u201d products as ladders (or even deliver them to worksites) went up a hundredfold between 1950 and 2001, to a total of $205 billion.<span id=\"fwk-collins-fn16_028\" class=\"im_footnote\"><\/span><\/p>\n<p>Now, let\u2019s say that your lawyer has given your defective ladder to a forensic laboratory in order to find out exactly what caused it to buckle and you to fall. As it turns out, the clue to the problem is the small patch of rust that brought down the price you paid for the ladder when you bought it. The ladder, concludes the lab, had for some time been in close proximity to liquid nitrogen, which can corrode various metals, including aluminum. Sure enough, further investigation reveals that the entire shipment of ladders had been stored for nearly two years in a Ladders \u2019N\u2019 Things warehouse next to an inventory of liquid-nitrogen\u2013based fertilizer. Your lawyer advises you that, in addition to your strict-liability case against the manufacturer of the ladder, you have a strong negligence case against the retailer from which you purchased it.<\/p>\n<p><a href=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1120\/2015\/05\/02031750\/negligence.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-2091 aligncenter\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1120\/2015\/05\/02031750\/negligence-1024x1009.jpg\" alt=\"Negligence vs. Strict liability. In a negligence lawsuit, the consumer injured by a defective product can only take action against the negligent party. If the manufacturer made a defective product, the wholesaler and retailer are not liable. In a strict liability lawsuit, all parties in the distribution chain (the manufacturer, wholesaler, and retailer) are liable.\" width=\"575\" height=\"566\" \/><\/a><\/p>\n<\/div>\n<\/div>\n<div id=\"collins-ch16_s04_s01_s03\" class=\"im_section\">\n<h2 class=\"im_title im_editable im_block\">Grounds of Breach of Warranty<\/h2>\n<p>Moreover, adds your lawyer, there\u2019s one more matter to be considered in determining liability for your injury. Had not the department manager at Ladders \u2019N\u2019 Things assured you that the ladder would support a weight of three hundred pounds per rung? Your uncle had asked you about the weight capacity of the ladder because he knew that the roofing job meant putting heavy bundles of shingles on the scaffold. A ladder that holds three hundred pounds per rung is a Type IA extra-heavy\u2013duty ladder suitable for such jobs as roofing and construction. According to the lab, however, the construction of your ladder is that of a Type II medium-duty\u2013commercial ladder made for lighter-weight tasks. The manager at Ladders \u2019N\u2019 Things, explains your lawyer, may have been guilty of <em class=\"im_emphasis\">breach of warranty<\/em>\u2014yet further grounds for holding the retailer liable in your product-liability case.<\/p>\n<div id=\"collins-ch16_s04_s01_s03_s01\" class=\"im_section\">\n<h2 class=\"im_title im_editable im_block\">Key Takeaways<\/h2>\n<\/div>\n<\/div>\n<\/div>\n<div id=\"collins-ch16_s04_s02\" class=\"im_section\">\n<div id=\"collins-ch16_s04_s02_s02\" class=\"im_section\">\n<div id=\"collins-ch16_s04_s02_s02_n01\" class=\"im_key_takeaways im_editable im_block\">\n<div class=\"keytakeaways\">\n<h3>KEY TAKEAWAYS<\/h3>\n<ul id=\"collins-ch16_s04_s02_s02_l01\" class=\"im_itemizedlist\">\n<li><strong class=\"im_emphasis im_bold\">Product liability<\/strong> is a claim of injury suffered because of a defective product. In such cases, there are three grounds for pursuing a claim and seeking damages (that is, three \u201ctheories of recovery\u201d): negligence, strict liability, and breach of warranty. Most plaintiffs use as many of these three grounds as possible.<\/li>\n<li>In a product-liability case, a manufacturer\u2019s negligence can take three different forms:\n<ul>\n<li><em class=\"im_emphasis\">Negligent failure to warn<\/em>. The manufacturer may be liable if the company knew (or should have known) that, without a warning, the ladder would be dangerous in ordinary use or in any reasonably foreseeable use.<\/li>\n<li><em class=\"im_emphasis\">Negligent design<\/em>. A product is defective if, despite any warnings, the risk of harm outweighs its usefulness in doing what it\u2019s designed to do.<\/li>\n<li><em class=\"im_emphasis\">Negligence per se<\/em>. The manufacturer may be liable if the ladder fails to meet legal standards.<\/li>\n<\/ul>\n<\/li>\n<li><strong class=\"im_emphasis im_bold\">Strict liability torts<\/strong> involve actions that are inherently dangerous and for which a party may be liable no matter how carefully he or she performs them. Under the <em class=\"im_emphasis\">doctrine of strict liability in tort<\/em>, the plaintiff doesn\u2019t have to prove negligence on the manufacturer\u2019s part, nor does it matter how much care was taken by the manufacturer to prevent defects. The doctrine of strict liability rests on two legal conclusions, as follows:\n<ul>\n<li>The manufacturer can protect itself by taking steps to anticipate and prevent hazardous product features, but the public can\u2019t.<\/li>\n<li>The manufacturer can protect itself by purchasing insurance and passing the cost on to the public in the form of higher product prices; the consumer has no such protection. The manufacturer is liable under the doctrine of strict liability for any harm that comes to a person from using the product, especially if it has become defective during the process of getting the product from the manufacturer to the user. The concept of strict liability also supports the plaintiff\u2019s right to pursue claims against members of the manufacturer\u2019s distribution chain.<\/li>\n<\/ul>\n<\/li>\n<li>Breaching a <strong class=\"im_emphasis im_bold\">warranty<\/strong>\u2014a guarantee that a product meets certain standards of performance\u2014is grounds for recovering in a product-liability case. An <strong class=\"im_emphasis im_bold\">express warranty<\/strong> is created when a seller affirms that a product meets certain standards of quality, description, performance, or condition. An <strong class=\"im_emphasis im_bold\">implied warranty<\/strong> arises automatically out of a transaction and takes one of two forms: (1) an <em class=\"im_emphasis\">implied warranty of merchantability<\/em> (which states that the product is reasonably fit for ordinary use) and (2) an <em class=\"im_emphasis\">implied warranty of fitness for a particular purpose<\/em> (which states that the product is fit for some specific use).<\/li>\n<li><strong class=\"im_emphasis im_bold\">Agency<\/strong> is a legal relationship between two parties in which one party acts on behalf of, and under the control of, another. In a <em class=\"im_emphasis\">principal\u2013agent relationship<\/em>, the <em class=\"im_emphasis\">agent<\/em> is acting on behalf of the <em class=\"im_emphasis\">principal<\/em>. Employer-employee relationships are also agency relationships.<\/li>\n<li>The primary goal of tort law is restoring the victim to the condition that he or she would have been in had no injury ever taken place. Likewise, the primary goal of contract law is restoring the nonbreaching party to the condition that he or she would have been in had the contract not been breached. To achieve these goals, the legal system provides for monetary awards in the form of <strong class=\"im_emphasis im_bold\">compensatory damages<\/strong>. Another form of monetary award, <strong class=\"im_emphasis im_bold\">punitive damages<\/strong>, is intended to punish, to deter similar injurious conduct in the future, or to set an example.<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-652\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Revision and adaptation. <strong>Authored by<\/strong>: Linda Williams and Lumen Learning. <strong>Provided by<\/strong>: Tidewater Community College. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-nc-sa\/4.0\/\">CC BY-NC-SA: Attribution-NonCommercial-ShareAlike<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>An Introduction to Business. <strong>Authored by<\/strong>: Anonymous. <strong>Provided by<\/strong>: Anonymous. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"http:\/\/2012books.lardbucket.org\/books\/an-introduction-to-business-v1.0\/s20-04-product-liability.html\">http:\/\/2012books.lardbucket.org\/books\/an-introduction-to-business-v1.0\/s20-04-product-liability.html<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-nc-sa\/4.0\/\">CC BY-NC-SA: Attribution-NonCommercial-ShareAlike<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":78,"menu_order":13,"template":"","meta":{"_candela_citation":"[{\"type\":\"cc\",\"description\":\"An Introduction to Business\",\"author\":\"Anonymous\",\"organization\":\"Anonymous\",\"url\":\"http:\/\/2012books.lardbucket.org\/books\/an-introduction-to-business-v1.0\/s20-04-product-liability.html\",\"project\":\"\",\"license\":\"cc-by-nc-sa\",\"license_terms\":\"\"},{\"type\":\"original\",\"description\":\"Revision and adaptation\",\"author\":\"Linda Williams and Lumen Learning\",\"organization\":\"Tidewater Community College\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by-nc-sa\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"efa61152-af2e-4640-9fcd-4b33d10557d0","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-652","chapter","type-chapter","status-publish","hentry"],"part":84,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-introbusinesswmopen\/wp-json\/pressbooks\/v2\/chapters\/652","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-introbusinesswmopen\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-introbusinesswmopen\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/clinton-introbusinesswmopen\/wp-json\/wp\/v2\/users\/78"}],"version-history":[{"count":20,"href":"https:\/\/courses.lumenlearning.com\/clinton-introbusinesswmopen\/wp-json\/pressbooks\/v2\/chapters\/652\/revisions"}],"predecessor-version":[{"id":4935,"href":"https:\/\/courses.lumenlearning.com\/clinton-introbusinesswmopen\/wp-json\/pressbooks\/v2\/chapters\/652\/revisions\/4935"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-introbusinesswmopen\/wp-json\/pressbooks\/v2\/parts\/84"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-introbusinesswmopen\/wp-json\/pressbooks\/v2\/chapters\/652\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-introbusinesswmopen\/wp-json\/wp\/v2\/media?parent=652"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/clinton-introbusinesswmopen\/wp-json\/pressbooks\/v2\/chapter-type?post=652"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/clinton-introbusinesswmopen\/wp-json\/wp\/v2\/contributor?post=652"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/clinton-introbusinesswmopen\/wp-json\/wp\/v2\/license?post=652"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}