Product Liability Overview

Product Liability

• Growing concern: Businesses face increasing legal responsibility for injuries caused by their products.
• Example: A Mumbai-based TV manufacturer could be held liable if its TVs explode, causing harm.
• Varying legal systems: Liability rules differ across countries. In Europe and the USA, a company is more likely to be held responsible.
• Trend towards consumer protection: Many countries are shifting to protect consumers, increasing manufacturer/seller liability.
• Traditional approach: Traditionally handled by contract (caveat emptor – "let the buyer beware!") and tort (negligence).
• Modern approach (e.g., USA): Caveat vendor – "let the seller beware!" (with exceptions)
• Tort principles: People owe a duty of care to others to prevent harm. Negligence and resulting compensation are critical in lawsuits.
• Strict liability: Some systems hold manufacturers liable for damages, even without negligence (especially for inherently dangerous products).
• Liability bases: Countries use different combinations of contract, negligence, and strict liability for product liability.
• Common law countries (USA, British Commonwealth): Use all three (contract, negligence, strict).
• European Union: Primarily relies on strict liability.

Product Liability Defenses

• Contributory negligence: Injured consumers' negligence contributed to the injury. Complete or partial defense.
• Assumption of risk: Consumers explicitly understood and accepted the risks of using the product. Exceptions if product could be safer and no alternatives available.
• State of scientific/technical knowledge: The manufacturer lacked the knowledge to detect the defect at the time (as a defense).
• Warnings and disclaimers: Manufacturers provided warnings about product risks; limited responsibility for consumer misuse.

Consumer Protection

• Government involvement: Governments increasingly play a role in protecting consumers.
• Globalization impact: Growing global trade and consumer transactions necessitate more protection.
• EU Green Paper: The EU has consumer protection objectives, but their full implementation is yet to be seen in member states.

Consumer Protection Examples

• Fairness in contracts: Standard-form contracts often lack consumer power. Regulations might include: replacement of defective items, a process for disagreements with the seller/manufacturer.
• Deception and fraud: Laws prohibit misleading consumers. Fraud (intentional misrepresentation.) requires specific elements (misrepresentation, intent, knowledge, reliance, injury)
• Product information disclosure: Laws require companies, like banks and financial services companies, to disclose product (financial product, kitchen appliance, food product) information (fees, safety, ingredients, instructions)
• Prohibition of certain sales practices: Disallowing unfair clauses in insurance contracts.
• Financial information access: Consumers should have access to business info, assisting their financial decisions.
• Representative actions/class actions: Provide a meaningful solution for consumers against large businesses.