Product liability law deals with injuries that arise from the use or sale of a product. Historically, if you were injured by a product, you had no basis for recovery. The original rule of law regarding purchasing goods was caveat emptor.
Product Liability Historically
Caveat emptor, which in Latin means “let the buyer beware”, arose during a time when people would go daily to market to purchase produce and goods. Given the daily nature of market shopping, a purchaser would soon learn which vendors consistently sold quality goods and which did not. To the courts at that time, it made sense to require a purchaser to inspect the produce before buying. After all, the idea was, if the purchaser had an opportunity to examine the object thoroughly and failed to detect a defect, whose fault was that?
Privity of contract followed caveat emptor as the next product liability standard. During industrialization products became more complicated and as such, the merchant would know more about the product than the purchaser could discover with a quick inspection. In addition, the relationship between merchant and purchaser was no longer a face-to-face, personal relationship as it had been in the market. So the court responded by finding a new obligation for merchants, one to provide safe goods based in a contract.
The relationship between buyer and seller involves a contract, an exchange of value for value. This contract not only proved the purchaser received the goods from this seller, it allowed the court to pinpoint to correct party who caused the harm. However, there were a couple problems with basing liability on contract:
- Courts in the nineteenth and twentieth centuries began to recognize that people other than the purchaser were being injured by these products. As these people had no contract with the seller (because they did not purchase the product) they could not recover for their injuries.
- With the birth of more complex products, components that made up the product could also cause harm. Did a purchaser have a contractual relationship with every manufacturer of every part of a product simply by buying the final product?
For these reasons, the courts began to move away from basing recovery on breach of contract
Product Liability Law Today
These days courts will impose liability for a breach of a duty of reasonable care in the design and/or inspection of the goods. Since the manufacturer has control over the product’s design and manufacturing process, the courts look to see that the manufacturer has followed the safety practices common to the industry and those duties imposed under the law.
The rationale behind product liability law is consumer protection. Manufacturers of dangerous products should be deterred from putting them on the market. As such, manufacturers would be the best parties to handle this liability. Not only are they responsible for putting the dangerous product out in the market, they could include the cost of insurance premiums for a policy that could be used to pay damages as part of the selling price of the product. In the end, it is the same rationale that existed at the time of caveat emptor, simply shifted to the manufacturer as we as the consumer can no longer tell a dangerous product on sight.