Part 4- Sales, Chapter 20: Product Liability, Doc 4

Key Points Summary on Product Liability: Strict Liability and the Restatement (Third) Framework 1. Strict Liability under Restatement (Second) § 402A    Requirements for Strict Liability: o Seller’s Engagement in Business: The seller must be in the business of selling the product that caused harm. o Defective Condition: The product must be in a defective condition and “unreasonably dangerous” to the user. o No Substantial Modification: If a product is substantially modified after sale, strict liability may not apply if the modification contributed to the harm. Unreasonably Dangerous Standard: o Manufacturing Defects: Courts apply the “reasonable-expectationsof-the-consumer” test to determine if a defect makes the product more dangerous than an average consumer would expect. o Design Defects: Often evaluated using the risk-utility test, which weighs the design's safety benefits against its risks. Unavoidably Unsafe Products: Comment k to § 402A provides that products with unavoidable risks (like certain drugs) are not defective if properly made and accompanied by adequate warnings. 2. The Restatement (Third) of Torts: Product Liability    Basic Rule: A seller or distributor of a defective product is liable for harm caused by the defect if the product was sold or distributed in that condition. Unlike § 402A, this rule doesn’t require the product to be “unreasonably dangerous.” Types of Defects: 1. Manufacturing Defects: Defined as deviations from the intended design, including incorrect assembly or flaws. These cases are often treated as strict liability. 2. Inadequate Warnings: Requires manufacturers to provide reasonable instructions or warnings about foreseeable risks. This approach resembles negligence, as it considers factors like the effectiveness and feasibility of warnings. 3. Design Defects: Liability is assessed through a risk-utility analysis, similar to negligence standards. Plaintiffs must show that a safer, reasonable alternative design was available. Key Distinctions: The Restatement (Third) integrates aspects of both negligence and strict liability, tailoring its approach based on the type of defect rather than uniformly applying strict liability principles. 3. Admissibility of Similar Incident Evidence (Croskey v. BMW of North America, Inc.)    Case Summary: Croskey sued BMW, claiming that a design defect in the radiator led to a radiator failure, resulting in severe burns. He sought to introduce evidence of similar radiator failures in BMWs as proof of negligence in design. Legal Standard: Michigan law requires that prior incidents must be “substantially similar” to be admissible. Substantial similarity means incidents occurred under similar circumstances or with a similar cause, helping to demonstrate a pattern or risk BMW could foresee. Court Ruling: The court ruled that Croskey’s evidence of similar incidents was relevant and admissible to support his design defect claim. BMW was allowed to counter this by showing the total number of cars sold with the same radiator to argue that such failures were rare. This summary captures the evolution and current framework of product liability law, particularly in cases involving design, manufacturing, and warning defects. The Restatement (Third) emphasizes specific criteria for different types of defects, allowing nuanced analyses that balance consumer safety with practical considerations for manufacturers.