Privity of Contract

The first part of this book covers the liability of a seller of goods for misrepresentations and for breaches of the express and implied terms of a contract of sale. Reference is also made to certain analogous transactions such as contracts for the hire-purchase or hire of goods and contracts for work and materials.

Product Liability and the Conflict of Laws

The conflict of laws is one of the names given to the subject that deals with the resolution of private law disputes between private law parties where the facts have a connection to more than one legal system. Such situations arise frequently in product liability. For example, a product is assembled in State A using different components manufactured in States B, C, and D. Alternatively, a product is manufactured in State A, placed upon the market in State B, and consumed by the purchaser in State C, causing him injury which requires treatment in State D. In product liability litigation the fact that there are foreign issues means that a lawyer presented with such a case by the claimant must consider additionally three basic and interrelated questions. First, can the desired court hear the case the claimant would present to it? This is the jurisdiction question. If the answer is ‘No’, the claimant’s case will not proceed in that forum but may be able to be presented in another forum. If the answer is ‘Yes’, this means that the rules of jurisdiction may allow the claimant’s case to proceed as desired. The question of jurisdiction has a general and a specific aspect: the court must have the jurisdiction to hear the claim considered both in a general sense and in the specific sense involving the specific parties that the claimant would involve in the litigation he hopes to conduct before it.

Statutory Defences to Liability

Section 4 of the Consumer Protection Act 1987 provides a number of defences to liability which mirror those provided by Article 7 of Council Directive 85/374/EEC (the Product Liability Directive). By s 1(1), the Act and hence the defences must be construed so as to give effect to Article 7 and consistently with it. The defences cover such matters as:

Causation, Remoteness of Damage, and Defences

One of the most important and complex elements in many product liability actions is the establishment of a causative link between the allegedly defective product and the relevant damage. Indeed, the significance of causation cannot be overstated since, whether the claim is in negligence or under the Consumer Protection Act 1987, proof of causation will often lead to either a settlement or a successful claim.

Persons Subject To Liability

There is ample room for debate as to the category of persons who should be required to assume responsibility for damage caused by a defective product. The most obvious is the producer or manufacturer for usually they will have actively created the defect or at least have failed to eliminate it. However, in recognition of the fact that not all such producers will be solvent, readily identifiable, and available to be sued, it is widely recognized that others should also be potentially liable. The most obvious is the commercial importer and distributor of a defective product since in the absence of such liability an injured claimant would be left with the alternative of suing in a foreign jurisdiction. Secondly, there is the case of own-brand products. As the Law Commissions observed, many commercial organizations ‘sell products under their brand name as if they themselves had produced them, although the products were in fact made by their suppliers’.

The Requirement Of A Defect: Introductory Issues

The removal of a requirement of proving negligence, which is usually regarded as the distinguishing feature of the system of strict liability introduced by Pt I of the Consumer Protection Act 1987, will in all probability shift the focus of attention to the question of whether the claimant has established that the product is defective. As will be seen, the question gives rise to many difficult issues. Indeed, one writer has observed that ‘the problem of defining defectiveness has exercised the minds of legal scholars perhaps more than any other aspect of product liability law’.

Defects In Warnings And Instructions For Use

It has long since been recognized that liability in negligence may be incurred where there has been a failure to warn of a product’s dangerous characteristics and there is no shortage of modern examples to illustrate the point. The lack of a warning or directions for use may also render an otherwise acceptably safe product defective for the purposes of strict liability.

Introduction And Modern Historical Outline

The expression ‘product liability’ is usually understood to refer to the civil liability of manufacturers and others where damage or loss is caused by products which fail to meet the standards claimed expressly or impliedly for them or which are dangerous or otherwise defective. Such liability may arise either in contract or in tort and both aspects are covered in some detail in the course of this work. A further aspect which is discussed in less detail involves the use of the criminal law. Relevant provisions may apply either to particular types of product or be of more general application. The former are referred to only in passing whilst examples of the latter include Pt II of the Consumer Protection Act 1987 and other measures concerned with general product safety.

Exemption Clauses And Unfair Contract Terms

Parties to contracts frequently seek to exclude or modify the liabilities and remedies which would otherwise arise through breach of the express and implied terms discussed in earlier chapters. Such exemption or exclusion clauses may take a variety of forms. For example, there may be a simple statement that the goods are sold as is, or with all faults; or the clause may be exhaustively comprehensive. Similarly there may be an attempt to place a time limit on claims, to circumscribe the ability to reject defective goods, to limit the damages recoverable whether by reference to a specified sum or by excluding claims for consequential loss, or to substitute lesser obligations for those which would arise under the general law. There is nothing inherently objectionable in this where the parties are bargaining on an equal footing and the contract is the result of a genuine agreement between them. In principle commercial enterprises ought to be free to decide on the allocation of risks (and so of insurance cover) under their contract. They are unlikely to approve of well-meaning attempts to override the effect of their bargain.

The Liability in Negligence of Persons Other than Producers

Although this book is concerned primarily with the contractual liability of sellers of goods and with the liability in tort of manufacturers, we include here reference to other persons who may incur liability for defective products. The contractual liability of persons other than sellers has already been noted. Persons other than manufacturers who may incur liability in tort include retailers and persons who hire out or provide services involving the use of a product; donors and gratuitous bailors; wholesalers and importers; those who repair, service, recondition, assemble, install, or carry out work on a product; and probably also such persons or bodies as inspectors, engineers, testing agencies, and endorsers or certifiers of safety or quality. Finally, reference is made to the position of building contractors and builder-vendors. The discussion generally assumes that the claimant is suing in respect of personal injury or perhaps property damage, rather than economic loss simpliciter.