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BMJ Stone
Echelon Masonry
EZG Manufacturing
Federated Insurance
Fraco USA, Inc.
Hohmann and Barnard, Inc.
Hydro Mobile, Inc.
iQ Power Tools
Kennison Forest Products, Inc.
Mortar Net Solutions
Non-Stop Scaffolding
Pullman Ermator
SPEC MIX LLC
Stabila
Tradesmen's Software, Inc.
November 10, 2003 7:12 AM CST

Buyer Beware: Defective Products

By

We deal with products every second of our lives. From the bed we sleep on, to the shoes we wear, to the ladder we climb, to the pain relief we take for headaches, we constantly buy, touch, use or ingest products. Inevitably, some products fail and cause injury and loss, or otherwise disappoint the product user's expectations. Legal liability for such failure may be based on various theories and extend to many parties. This article explores those theories, and discusses related issues regarding warranties, liability of product distributors and retailers, and suggestions for product manufacturers and buyers.

Types of Product Defects
Product liability is based upon product defect. But defect is not limited to a product with a broken part. Rather, liability may also arise because of deficient product design, a mistake in the manufacturing process, or failure of the product maker or seller to provide warnings of the risks of product use.

For example, a design defect occurs on the drawing board, where, for instance, a scaffold should be, but is not designed to carry minimal, expected loads. As such every scaffold is defective by virtue of its design failure. By contrast, a manufacturing defect arises where the scaffold is properly designed, but as the scaffolding components are fabricated by the manufacturer, a worker poorly welds a component on one such scaffold. As a result, that specific scaffold will later fail to support a reasonably anticipated load.

Finally, a product may be defective because the manufacturer or seller fails to warn of the dangers or risks of injury associated with the product. Here, the scaffold manufacturer fails to warn that its product should not be assembled above a certain height because it will be more susceptible to collapse.

Failure to warn is one of the most tortured areas of product liability law. Many of us recall the infamous coffee burn lawsuits in which plaintiffs were awarded significant damages because they burned themselves after claiming that they were not warned that steaming hot coffee in a Styrofoam cup placed between their legs could burn. Similarly, anyone purchasing an electric drill or hammer may be humored or amazed by the increasing use of warning labels, some cautioning that the drill should not be placed into a bathtub filled with water, or that one should not strike their hand with the hammer. The manufacturers of such products undoubtedly believe that these warnings are silly as well, but feel compelled to add them to their products given the astounding verdicts in cases where the product user should simply have used common sense to avoid injury.

Injured Party Claims
Once a product defect causes injury or loss, the injured person may assert various claims. Breach of warranty is a common claim. Contrary to common belief, a warranty claim does not depend upon the issuance of a written warranty (although a written form helps prove the claim), but arises by law. Products that constitute "goods" under the Uniform Commercial Code in most states, carry with them implied warranties that the product will be fit for its ordinary purposes. If the product fails to satisfy this requirement, the injured person may seek to recover his or her resulting damages for breach of implied warranty. Express warranties also arise where the product seller makes specific written or oral claims about its product, and those claims become part of the reason the buyer purchases the product. Similarly, a display model may also create an express warranty that the product will perform as displayed.

Another common claim is negligence, based on the product manufacturer's or seller's failure to exercise reasonable care in the design, manufacture, testing or sale of its product. The viability of such a claim is generally dependent upon showing that the manufacturer or seller did not exercise the same degree of care as that exercised by a reasonable manufacturer or seller.

A related claim is strict liability, where the focus is not on whether the manufacturer or seller exercised reasonable care, but whether the product is unreasonably dangerous to the product user or bystander. Thus, a manufacturer that expends significant resource to design and produce its product may still face liability if the product remains unreasonably dangerous either because of the inherent risks of using the product or the lack of adequate warning and instruction as to safe product use.

Fraud can also be alleged where an injured product user has relied upon a manufacturer's or seller's false product claims. This can be a more difficult claim to prove, however, where most states require that the product user show clear and convincing evidence that the manufacturer or seller intended to defraud the product user. An increasing number of states have also enacted consumer protection and false advertising statutes that provide another means of pursuing claims involving defective products. Many of these statutes allow more favorable relief than claims for breach of warranty or negligence because they may permit recovery of attorney's fees and, in some instances, treble damages.

Manufacturer and Retailer Issues
Many product distributors and retailers erroneously believe that they bear less liability for defective products than do manufacturers who design, test and produce the products. Generally, the law imposes the same degree of liability upon all in the stream of commerce, and thus, the mom and pop corner store retailer may be held as liable for the sale of a defective product sold in a sealed container as the remote manufacturer who made and packaged the product. In short, if you make, market or sell a defective product, you are potentially liable to an injured party. Under certain circumstances, however, many retailers may seek reimbursement from the product manufacturer, but such recovery may be protracted and costly.

Many manufacturers and product sellers endeavor to limit their liability through use of "warranty forms" which deny liability, exclude most warranties, or preclude or limit the recovery of damages. Many such forms are no defense to product liability claims based on negligence, strict liability or fraud. Nevertheless, some courts will enforce these warranty exclusions and limitations, and as such, product buyers should "read and beware," before purchase.

In the hundreds of product liability claims I have handled, perhaps the most common manufacturer failure is the lack of product testing. Time and again manufacturers market their products for specific uses, or claim that a product is suitable under many conditions, and yet, they have done little, if anything, to verify or test the product for those uses or under those conditions. Many standardized testing protocols have been established by scientific organizations and trade groups to analyze virtually any product. Manufacturers would be well served to pursue such testing, and document that they evaluated the foreseeable environments in which their products will be used. This testing not only supports their marketing claims, but provides a defense to future liability claims.

Finally, any product producer or retailer is advised to review their insurance coverage and confirm that they have adequate protection for claims involving their products. Many insurance policies contain exclusions that, to the average reader, might not appear to deny coverage, but in reality, support the insurer's decision to deny coverage.

Product Purchaser Issues
Product buyers should evaluate factors in addition to price, particularly if the product should serve a particularly important function. Among other things a prospective purchaser should review any written warranty to determine what exclusions and limitations apply. In some instances the purchaser may be able to negotiate modification of warranty terms.

Further, a purchaser should ask what testing and product evaluations have been performed to substantiate marketing claims. For the same reasons that manufacturers should test and evaluate their products, buyers should scrutinize product claims and ask the seller what has been done to adequately test the product for its touted uses. Where the product involved is particularly expensive or serves a vital role, the buyer should consider contacting the manufacturer directly, requesting written confirmation of test results and document the oral representations of the manufacturer. In other words: buyer beware. Don't rely solely on flashy marketing materials to determine the suitability of a product for your critical needs.


About the Author

Warren Lutz, Esq., is a Director with the Washington, D.C., law firm of Jackson & Campbell, P.C. He specializes in product liability, toxic torts and construction litigation.

This article is not intended to provide legal advice, but to raise issues on legal matters. You should consult with an attorney regarding your legal issues, as the advice you may receive will depend upon your facts and the laws of your jurisdiction.

 

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