Part 4- Sales, Chapter 20: Product Liability, Doc 6

Summary of Key Concepts in Product Liability Law (Pages 541-544) 1. Post-Manufacture Evidence in Product Liability Cases  In product liability suits, whether a product is defective must be evaluated based on the information available at the time of its manufacture and sale. Post-manufacture evidence, including knowledge or incidents that emerged after production, is generally inadmissible to determine liability in design defect claims. Courts discourage the use of hindsight to judge a manufacturer's decisions, aiming instead to evaluate those decisions as they were made, given the available information. 2. Misrepresentation in Product Liability  Liability for misrepresentation can arise if a seller (in the business of selling the product) makes false statements about a product’s material facts, affecting a reasonable buyer’s decision. Sellers are not liable for minor misstatements, opinions, or “sales talk,” and the plaintiff does not need to prove they directly relied on the misrepresentation if it resulted in injury or damage. 3. Industrywide Liability  Industrywide liability addresses causation issues when multiple firms produce a harmful standardized product, making it difficult to identify which company’s product caused harm. Courts have sometimes apportioned liability among firms based on market share, especially in cases involving widespread health issues, such as those arising from DES (a synthetic estrogen) or asbestos exposure. 4. Damages in Product Liability Cases  There are various types of damages available depending on the theory of liability: o Basis-of-the-Bargain Damages: These direct economic damages compensate buyers for the difference between the promised value of goods and the value actually received, mainly awarded in warranty cases with privity (a direct contractual relationship). o Consequential Damages: Includes personal injury, property damage, lost profits, and non-economic losses like pain and suffering. Tort theories, like negligence and strict liability, allow claims for these types of damages, which can sometimes include punitive damages if willful misconduct by the seller is proven. 5. Time Limitations on Product Liability Claims  Claims must be filed within set time limits, typically under statutes of limitations or statutes of repose: o Statutes of Limitations: For warranty claims under the UCC, the limitation is generally four years from the sale date. Tort cases may have shorter limits, but they begin only when the defect or injury is discovered. o Statutes of Repose: These provide a hard limit (often 10-12 years) from the product’s sale date, after which no claims can be made, regardless of when the injury occurred. This is meant to protect manufacturers from indefinite liability. 6. Punitive Damages  Punitive damages are awarded to punish particularly egregious conduct and deter future harm. They are only available in cases of extreme negligence or willful misconduct, and their availability varies by state. 7. The Role of Privity in Warranty Cases  In tort cases, plaintiffs can often sue without a direct contractual relationship with the defendant (privity). However, in warranty claims, privity may be necessary, although some exceptions exist if a warranty was made publicly, like through advertising. This summary outlines the legal complexities in product liability cases, the different types of damages and their application across theories, and the rules around evidence, time limits, and damages, illustrating the balance between protecting consumers and setting fair boundaries for manufacturers.