Business Torts and Product Liability

Table of contents

The scope of product liability usually exposes the manufacturers, sellers, product designers or licensres to the sphre of the legal actions. Here the word ‘product’ is not only indicate the finished or final products but it covers the supplimentary items which is intimately associated to consumer expectations . Moreover, the term produt saftey can be a part of a product, which is related, with any kind of chain of distribution. The manufacturers and other entities involved with market are liable for the products, which are defective in nature .


The distributors, dealers, retailers, representatives and employers can also brought in to the action if their products are turned to be defective. The American common law adopted the concept of strict liability under consumer perspectives in early 1960’s. They began to adopt the view that the sellers should bear the cost of injuries or defects in their products as they are in the best position to distinguish the risks associated with their products. The American law institutes call for the various state law departments to recapitulate the developments in strict liability in Section 402A of the Restatement (Second) of Torts in 1977.

However, it happens that the defenadnts may undergo harsh facets of the torts and action for their unintentional act or ommission. The courts of modern times also provide the sellers the indisputable liability for their defective products without the negligence or fault on the part of the seller. (1) For such victims the rules and judgements may appear too harsh but the genuine culprits desreves so.

Restatement (Third) of Torts products liability, 1999 Business Torts and Product Liability 2

Introduction “He can excuse himself by showing that the escape was owing to plaintiff’s default; but as nothing of this sort exists here, it si unnecessary to inquire to what excuse would be sufficient. ” – Blackburn J Generally there are cases that where a defaulter can be held responsible for an injury even where no negligence or evil intent can be shown. The doctrine of strict liability imposes legal responsibility for injuries sustained by or because of an actor’s conduct, whether or not the actor used reasonable care and regardless of the actor’s state of mind.

Strict liability cases are limited to certain narrowly-defined areas of the law, including products liability, ultrahazardous activities, care of animals and certain statutory offenses. However, the question arises whether such liability and the treatment against the alleged wrong doer is too hurtful or not. To analyse this, firstly, we shall discuss the scope of the torts and product liability in buisiness. Buisiness torts and product liability

The general principle is that, seller of any defective product which is unreasonably dangerous to the user or consumer, is subject to liability for physical harm thereby caused to the ultimate user or consumer or to his property, if the product is expected to and does reach the user or consumer, without substantial change in the condition in which it is sold. (Restatement (Second) of Torts, 1977)(1). It does not matter that the seller has exercised all possible care in the preparation and sale of his product; and the user or Sec. 402A of Restatement (Second) of Torts, 1977

Business Torts and Product Liability 3 consumer has not bought the product from or entered into any contractual relation with the seller. In Rylands Vs Fletcher,(2) the court found that even if the defendant was not negligent or rather, even if the defendant did not intentionally cause the harm or he was careful, he could still be made liable. The defendant may excuse himself by showing that the occurrence was owing to the plaintiff’s default or that was the consequence of vis major or the act of good.

The liability arises not because there was ant fault or negligence on the part of persons, but because he kept such defective products and the same was caused some sort of personal damage to another. The liability of the defective products was well explained in the famous case Donogue Vs Stevenson (3) as, a person who is for gain engages in the business of manufacturing articles of food and drink intended for consumption by members of the public in the form he issues them, is under a duty to take care in the manufacture of these articles. That duty must be to whom he intends to consume his products.

The law has enumerated a number of rules to provide maximam penalty to the wrongdoer’s for his misconduct regarding the products. .whether this way of gauging the act and ommissions of the wrongdoers for their product liability is justifiable or not? Are they undergoing ruthless treatment than they deserve? Whether the treatment under product liability is harsh or not Recently in the case, Wyeth vs. Levine (4) the Vermont Supreme Court

Rylands Vs Fletcher (1868) L. R 3 H. L 330

Donogue Vs Stevenson [1932] AC 562 (HL) (Sc) 4. Wyeth vs. Levine, Pharmaseutical industry Today, News, 22 Nov 2008 Business Torts and Product Liability 4 confirmed a nearly $6. 8 million product liability claim against Wyeth because the company’s FDA-approved warning label on anti-nausea drug Phenergan only cautioned physicians about a quick-injection method. The injection caused the palintiff’s vein nicked and caused gangrene in an arm that eventually led to amputation. Here, it can be accepted that defendant faced the consequences because of his negative conduct to the consumers.

Still there is a question arises about the magnitude of the penalty usually provides in such cases. The fact is that such liability causes negative impact on the day-to-day conduct of buisiness also. The product liability always compel the the manufacturers to internalize the cost of the product. When the manufacturer assigned all the liabilities for the injuries caused, he is forced to take account all the harms caused and this may lead the manufacturer unable to profit from producing the product Due to strict imposition of law in various manners, the manufacturer may not produce the socially optimal level of goods.

Under such conditions the manufacturer cannot pass on the economic costs to the consumers as insurance as the most of the consumers are highly price sensitive. This may harm the production of the products and complete removal from the market. Apart from this, there is a chance of instituting high-level substantial higher transaction costs due to the high-level apllication and the sucsequent penalty of the product liability. Moreover, this causes lowering the consumer surplus from these transactions. (Miller,Goldberg ,2004)

Miller, C. J, Goldberg, R. S (September 30, 2004) Product liability, 2 edition Publisher: Oxford University Press, USA; ISBN-13: 978-019825678 Business Torts and Product Liability 5 Some times the damage may cause due to the default of the palintiff . The palitiff may misuse the product. Moreover, there is a chance that the product has been altered and modified by the palintiff without the knowledge of the manufacturer.

The defects may cause due to the conduct of the third party who is neither defendant’s servant nor does the defendant have any control over him. Or else there is a chance of the product is being manufactured or designed according to the industry custom and standards and government standards related to the manufacture and design. In such cases there is no point in treating the defendant with a extreme penalty. (6)(Salmond, 1996) The cases like Fardon Vs harcourt Rivingston (7) and Glosgow Corp. Vs Muir (8) clearly laid down the priniciple regading the minimising the liability of the wrong doer under such circumstances..

If the possibility of the incident emerging is only a mere possibility which could never occur to the mind of eth reasonable man ,there is no negligence in not having taken extraordinary precautions. People must guard against reasonable probablities but they are not bound to guard against fantastic possibilities. Conclusion Since the product liability is the legal responsibility of manufacturers and sellers to buyers, users and bystanders for damages or injuries suffered, the strict liability of these sections are firmly observed. However, a manufacturer of a product cannot be considered the absolute guarantor of its product’s safety.

It can be said that there is a utilitarian Salmond, Heuston (1996) , Law of Torts, , p443 publisher: Sweet & Maxwell; 21Rev Ed edition (24 Oct 1996) ISBN-13: 978-0421533509 7. Fardon Vs harcourt Rivingston (1932) 146 L. T 391 8. Glosgow Corp. Vs Muir ((1943) A. C 488 principle revolved under the imposition of such liability. Because the people determined to cling to the responsible persons for their actions even though there is no negligence on their part.

Because there are some derivation of benefits likes improved products, safety and accountability, which is generally, prevail over the burden on the defendant in strict liability proceedings. So in such cases in order to fulfill the public policy of minimizing the injury, it is more reasonable to introduce the burden of finding and correcting such dangers upon the manufacturer rather than taking away the defective products from the consumer.


  1. Faegre & Benson, 2003 UK Trade and Investment, US product liability law, Nov. 2003
  2. Kubasek, Nancy K. ; Browne, Neil M. ; Giampetro-Meyer, Barkacs, Linda, Andrea; Herron, Dan; Dynamic Business law (January 4, 2008) McGraw-Hill ISBN 0073524913 / 9780073524917
  3. Miller, C. J, Goldberg, R. S (September 30, 2004) Product liability, 2 edition Publisher: Oxford University Press, USA; ISBN-13: 978-0198256786
  4. Restatement (second) of Torts products liability, 1977
  5. Restatement (Third) of Torts products liability, 1999
  6. Salmond, Heuston (1996) , Law of Torts, , p443 publisher: Sweet & Maxwell; 21Rev Ed edition (24 Oct 1996) ISBN-13: 978-0421533509

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