The Theories and Elements of Products Liability & Their Application on the MBE and MEE

             Products liability (hereinafter “prod liab”) can be one of the more troubling areas of the UBE, an area of law contained within the relatively “easy” subject of Torts.  Oftentimes, it is not pinpointing which theory of prod liab is being tested that causes some of this UBE angst.  With that said, let us break down the  various theories tested and further, break down the four main elements of prod liab from a strict liability theory.

Prod liab is the liability of manufacturers and sellers of products for harm caused by the products they sell. Historically, the principle of caveat emptor (Latin for “buyer beware”) meant that sellers had very little legal responsibility for products once they were sold. If a buyer wanted a guarantee regarding the quality and safety of the product, such protections had to be stipulated in a contract between buyer and seller. Unless the buyer could show fraud or misrepresentation, the seller would generally not face liability for defective products.

As concerns the various theories of prod liab, there are five theories of liability possible in products liability and they include (1) Intent; (2) Negligence; (3) Warranty; (4) Strict liability in tort (most common) and; (5) Misrepresentation.

The factual situations accounting for nearly all claims in product liability are: (1) Improperly manufactured product; (2) Defective design; (3) Failure to warn or inadequate warning and; (4) Misrepresentation.

Prod Liab applies to BOTH consumer products and industrial products – for example, products such as: appliances, sporting goods, power tools, vehicles, food, big machines, drill press, forklift.

If you get hurt by the product in question? You likely have multiple causes of action such as negligence on part of manufacturer, a strict prod liab claim, breach of warranty under the UCC, etc.

BAR EXAM NOTE - Intentional tort actions are very rare in products liability cases. On the UBE we typically see a prod liab question using the strict liability or negligence theory.

BAR EXAM NOTE – DO NOT always assume strict liability on the MBE question or MEE issue. Your plan of attack should be to see what theory the plaintiff is using and we are being tested on.  For example, if the fact pattern reads “plaintiff sues for neg?” use the elements for/of the negligence theory.  If the fact pattern demonstrates that “the plaintiff is suing claiming that the product was defective” that is likely a question asking about our knowledge of law concerning the strict liability theory. Let us examine these theories a bit more:

Strict Products Liability –

There are four elements of strict products liability and the following provides a breakdown of each of these elements:

Element 1 – Defendant is a merchant:

Someone who routinely deals in goods of this type and there are 4 ways to make this determination: 1 – a casual seller does NOT count; 2 – service provider does NOT count because they are not a merchant; 3 – a lessor of products CAN be strictly liable and; 4 – every party in distribution chain IS considered a merchant.

Element 2 – The product must be DEFECTIVE:

BAR EXAM NOTE – On the MBE, this element can be STIPULATED by saying that the product is defective so no need for us to satisfy!

There are THREE Kinds of Defects and They Include:

·       1 – Manufacturing defect – the product departs from its intended design

·       2 – Design Defect –

§  If another way it could have been built and this must meet a 3 part test –

·       1 – must be safer than version actually marketed;

·       2 – must be cost effective;

·       3 – must be practical meaning that it can’t interfere w/ product as its normally should be

            BAR EXAM NOTE – With respect to element two of the design defect test, the MBE or MEE will note that the product costs X and the fix costs Y.  You need to determine if that is cost effective and that will usually be quite obvious.  For example, a $500 with a $450 fix would NOT be cost effective whereas a $10,000 car with a $15 per unit fix WOULD be considered cost effective.  These MBE questions are common.

·       3 – Information Defect –

o   Residual risks that can’t be designed away and consumers unaware if the risks and product doesn’t have adequate warning? THAT IS a DEFECT.  If product can be redesigned under our 3 part test above? A warning is insufficient and should be redesigned.

Element 3 – The Product Was NOT Altered Since it Left The Defendant’s Hands –

Must show defect existed by the time it left the manufacturer with no deliberate or accidental alteration.  Presumption: if product moved through ordinary channels?  Burden SHIFTS to the defendant to DISPROVE that it was not the manufacturer but rather someone else who altered the product.

Element 4 – The Defendant is Only Liable if The Plaintiff is Making A Foreseeable Use of the Product -

BAR EXAM NOTE - Popular on MBE – trick = misuse MAY be foreseeable and thus fine! For Example: Think about moving wire used to hang pictures which is completely routine.  However, if the use is completely improper and unforeseeable? That will DEFEAT a strict liability claim.

Negligence Theory –

Duty: Privity is not an issue, plaintiff simply must be a foreseeable plaintiff. Defendant has a duty to exercise reasonable care in design, manufacture, inspection, warning, marketing, etc. A retailer has no duty to inspect if the product comes sealed from the manufacturer, unless they have reason to know it is defective. Choice of defendant is important, as obviously in a case of defective manufacture the defendant should be the manufacturer rather than the retailer. Duty can be established by statute, a type of negligence per se.

Breach: Apply risk/utility analysis to the conduct, whether it is mis-manufacture, defective design, or failure to warn. For negligent design, analyze reasonable alternative design. Analyze these factors: usefulness and desirability of the product, availability of safer alternative products, dangers of product that have been identified at time of trial, likelihood and probable seriousness of injury, obviousness of danger, normal public expectation of danger, avoidance of injury by care in use or product, feasibility of eliminating the danger.

Common problems with defects are when plaintiff misused the product (manufacturer may be required to anticipate reasonably foreseeable misuse), when the risk is scientifically unknowable (no liability where manufacturer could not have known of risk), or when the plaintiff has an allergy (modern trend is to require warnings).

Causation and Damages: Determined as in ordinary negligence.

Warranty Theory –

Duty and breach: Warranty claims arise under principles of contract. The duty is contractual and the breach is breach of contract.

Privity has some role: only the consumer or member of consumer’s household may sue. The defendant is the entity which offers the warranty. For express warranty and implied warranty of merchantability, the defendant must be a commercial entity which normally sells such products. The implied warranty of fitness for a particular purpose, however, has no requirement that the seller ordinarily sells such goods.

Warranty may be express or implied. Express warranty is a written warranty or a statement by a seller. Implied warranty is the implied warranty of merchantability or implied warranty of fitness for a particular purpose. It is possible to breach, one, two, or all three of these warranties.

An express warranty must be a factual statement about the product, not mere “puffery.”

The UCC provides that every new product has an implied warranty of merchantability for its ordinary purpose, when sold by a merchant who normally sells such goods. The warranty is that the product will perform as an ordinary consumer would expect.

The UCC provides that when a seller has specialized knowledge about a product and says that it is fit for a particular purpose, and the buyer relies upon that expertise and recommendation, a warranty of fitness for a particular purpose arises.

Causation: Breach of warranty must have proximately caused the harm.

Damages: A plaintiff may recover under warranty even if the only damage is to the product itself.

Misrepresentation Theory –

Misrepresentation is used as a cause of action when any person is injured in reliance on the product seller’s misrepresentation of fact (e.g. assurances of a product’s safety).

Unlike warranty, plaintiff must prove actual reliance.

Unlike strict liability, the product need not be dangerously defective.

BAR EXAM NOTE – The following two nuance areas of prod liab were tested on the MBE questions released by the NCBE in early 2022.  We should add these two rules of law to our prod liab repertoire.

1     A commercial seller of non-defective component parts that are incorporated into a finished product will not be strictly liable for a defective finished product unless the seller participated in the integration of the parts into the design of the finished product.

2    Strict products liability does not apply when a defective product causes only economic loss, as opposed to personal injury or property damage (Economic Loss Doctrine).

Conclusion

            It is extremely important to understand the difference between the various theories of prod liab as well as the elements of same.  Success on the likely 3-5 MBE questions in this area of law, and perhaps success on a MEE issue depends on your knowledge of the law. For more information concerning this section of Tort law, another area of Tort law, or a different legal topic tested on the UBE, please do not hesitate to contact us at PassYourBarExam@gmail.com