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Chapter 20 - Product Liability
20-11
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
an express warranty, it was not the immediate seller to the plaintiffs. Furthermore,
the court rejected an agency argument, which attempted to create privity through an
L. Disclaimers and Remedy Limitations
1. First, distinguish between disclaimers and remedy limitations. Note that this distinction
distinction in making its unconscionability determination.
2. Discuss the policies for and against the enforcement of disclaimers and remedy
that the arguments for enforcing disclaimers and limitations are stronger where genuine
them. Does anybody do this?
3. Implied Warranty Disclaimers
a. Spend some time on the basic (and usually fairly mechanical) tests set by UCC §§
2-316(2),(3), and (4). Note that §§ 2-316(3) and (4) basically supplement §2-316(2)
by providing additional ways to disclaim.
everything depends on the facts of the case, but the generalizations in the text should
hold up much of the time. (Chapter 15 provides a bit more detail on the factors
courts consider.) See, however, Wilke (a text case discussed below).
c. The Magnuson-Moss Act severely limits the enforceability of implied warranty
warranty on a consumer product.
d. Problem #11 provides a general review of much of the material regarding implied
warranty disclaimers.
e. Wilke v. Woodhouse Ford, Inc. (p. 581): The Supreme Court of Nebraska holds that
an implied warranty of merchantability disclaimer that is consistent with the
which one of the plaintiffs sustains significant physical injuries very shortly after the
obstacle to their ability to win a breach of implied warranty of merchantability claim
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UCC language? (Yes. ) How so? (Said “as is” and did so conspicuously. Also said
many cases.) Was the court also thinking it had something else in its back pocket to
give to the plaintiffs? (Maybe so—the duty to inspect and the possibility of a
negligent inspection cause of action.) Why does the court conclude that used car
dealers have a duty to conduct a reasonable inspection of the vehicles they sell, even
ones that would require disassembly of vehicle.)
4. Discuss the rules for disclaimers of express warranty, negligence, 402A, and Restatement
5. Regarding remedy limitations:
a. Note that in negligence and 402A cases, remedy limitations should be effective only
when a disclaimer would be effective.
b. Discuss UCC § 2-719(3), which applies in express and implied warranty cases. Note
that some courts have incorrectly used 2-719(3) as a basis for knocking out an
implied warranty disclaimer in personal injury cases involving ordinary consumers.
c. Because Problem #11 involves a remedy limitation, you might want to discuss it here
rather than earlier, even though the court didn’t discuss § 2-719(3). In this context,
d. For discussion of disclaimers and remedy limitations in “shrinkwrap” and
“clickwrap” contexts, see the Cyberlaw in Action box at p. 586.
M. Defenses
1. Begin by noting that many of the doctrines discussed earlier can be regarded as defenses
recent decades. Note that we don't try to discuss state laws apportioning fault among
2. The Traditional Scheme
a. Discuss product misuse, assumption of risk, and contributory negligence, and give
examples of each.
Chapter 20 - Product Liability
20-13
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
b. Note that these defenses overlap in that the same behavior can give rise to all three
defenses. Contributory negligence and assumption of risk can overlap where the
plaintiff knowingly and voluntarily assumes an unreasonable risk.
c. Point out that assumption of risk and product misuse are across-the-board defenses,
text.
3. The Emergence of Comparative Principles
a. Probably the best way to introduce this subject is to note the problems caused by the
all-or-nothing scheme of recovery the traditional defenses create, and the way
comparative negligence arose for similar reasons in the negligence context. Then,
describe how comparative principles operate.
"pure" or the "mixed" fashions described in Chapter 7. Third, it is not always clear
whether comparative principles apply to all theories of recovery or all types of
damage claims.
c. Comparative fault examples: Green (discussed below); Problem #13.
Points for Discussion: Ask what the crashworthiness doctrine contemplates and why
many jurisdictions have recognized it. (Because it is foreseeable that the vehicles
they produce may become involved in accidents, manufacturers should be expected
to take reasonable design steps to lessen the severity of injuries in those foreseeable
operating the vehicle. Thus, he may have caused, or helped to cause, the accident.
Obviously, he would not have been injured at all, let alone more severely than he
supposedly should have been, if the accident hadn’t occurred.) Why does the court
reject the plaintiff’s argument that his behavior shouldn’t be compared against that
4. Preemption and Regulatory Compliance
a. This was a new section added for the 14th edition. The 15th and 16th editions then
Chapter 20 - Product Liability
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© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
expanded the section with discussion of other relevant Supreme Court decisions (Riegel,
Wyeth, and Pliva; see below). the comparative merits of the preemption and regulatory
compliance defenses. Preemption, importantly, is conclusive: a plaintiff’s claim ends
completely if it is preempted. But whether preemption applies depends on the relevant
statute and its history. The regulatory compliance defense, meanwhile, is always
available to a compliant manufacturer. However, it is less likely to end a claim, and
more likely simply to weigh against it.
b. Note the text’s discussion of Levine, in which the Supreme Court held that FDA approval
holdings that the preemption provisions in the Medical Device Amendments (MDA) to
the Food, Drug, and Cosmetic Act barred state common-law product liability claims
regarding medical devices.
Points for Discussion: Justice Scalia says Congress would not have given a state jury
requirements for market clearance; common law, on the other hand, merely applies a set
of highly generalized concepts borrowed from general tort law---foreseeability,
unreasonableness, and so on. It is easy to imagine the state of New York adopting its
own FDA and effectively making policy for the whole country, but harder to imagine
IV. RECOMMENDED REFERENCES:
A. PROSSER AND KEETON ON THE LAW OF TORTS.
B. J. WHITE & R. SUMMERS, UNIFORM COMMERCIAL CODE: SALES.
V. ANSWERS TO PROBLEM CASES:
1. No. The Illinois Court of Appeals held that an express warranty was created when the seller
car. The court therefore upheld the lower court’s entry of judgment in favor of the plaintiff.
2. There was an express warranty. The fact that Forbes did not read the warranty does not
product claim. Forbes v. General Motors Corp., 935 So.2d 869 (Miss. Sup. Ct. 2006).
3. The Georgia Court of Appeals affirms the lower court's grant of summary judgment to
defendant CarMax. The court holds that a series of defects in the used car sold by CarMax
Chapter 20 - Product Liability
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© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
to the plaintiffs did not amount to a breach of the implied warranty of merchantability. There
were clearly various problems with the car, so why did the court hold that there was no
breach of the implied warranty of merchantability? (No showing of defect when purchased;
goods need not be perfect in order to be merchantable.) What does the merchantability
ordinary purpose of transporting the driver and passengers from place to place.) Crowe v.
Carmax Auto Superstores, Inc., 612 S.E.2d 90 (Ga. Ct. App. 2005).
4. The reasonable expectation test and the foreign-natural test were both available, but the court
83 (D. Md. 1987).
5. The Bakos lost on both claims. Regarding the implied warranty of merchantability claim, the
stain did what it was supposed to do by coloring the wood. There was no need to warn of the
purpose claim against Crystal if they had provided timely notice, for they relied on the
judgment of the paint lab employee in purchasing the sealant. But they waited too long to
2120 (Ohio App. 2001).
6. No. A federal district court granted summary judgment in favor of Ford. The court observed
that in negligent design cases, the focus is on whether the manufacturer failed to take into
negligent failure-to-warn claim, the court observed that Ford’s obligation to warn extended
only as to dangers associated with reasonably foreseeable uses of the car. Daniell’s use of
has no duty to warn of dangers that are open and obvious. The court also noted that the
efficacy of any warning was doubtful anyway, given Daniell’s decision to make a suicide
7. No. The Seventh Circuit observed that a reasonable jury could conclude that the mower was
defective and a proximate cause of Malen’s injuries. Malin’s evidence, presented through an
the availability of a “fail safe” version of the safety system could support a design defect
claim. Even if Malen himself was negligent and perhaps partially responsible for the harm he
Chapter 20 - Product Liability
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not have been granted in favor of the defendants. Malen v. MTD Products, Inc., 628 F.3d
296 (7th Cir. 2010).
8. To win his strict liability claim, Simo needed to prove that the vehicle was both defective and
unreasonably dangerous as of the time it left Mitsubishi’s hands, that Mitsubishi was a seller
utilized by Mitsubishi. He proved this largely through the testimony of an expert witness.
By proving the elements of the strict liability claim, Simo would become entitled to
appeal, the Fourth Circuit upheld the jury verdict. Simo v. Mitsubishi Motors N. Am., Inc.,
2007 U.S. App. LEXIS 19421 (4th Cir. 2007).
9. Hyundai Motor America, Inc. v. Goodin, 882 N.E.2d 947 (Ind. 2005). The Supreme Court of
Indiana holds that there need not be privity between a consumer and a manufacturer in order
for the consumer to have a claim against the manufacturer for breach of the implied warranty
of merchantability.
rein on the subject of privity.) What have other jurisdictions done on the privity issue
present in this case? (Many, though not all, have said no privity required.) Was the court
influenced by a desire to give the plaintiff a reasonable chance at a remedy? Note that if the
consumer couldn't go over the manufacturer here, the consumer would have no recourse.
decision?
10. The Supreme Court of Indiana held that the trial court was correct in granting summary
judgment in favor of the defendants on each of the four claims pleaded by the plaintiffs. The
court indicated that even assuming for the sake of argument that the medicine cup was not fit
in dosage, but the undisputed evidence revealed a erroneous double dosage of codeine (a
dosage known to be improper). Thus, Matthew’s death was not caused by an imprecise
measurement attributable to the cup’s design or to a failure to warn. It was caused by the
clearly erroneous double dosage. Kovach v. Caligor Midwest, 913 N.E.2d 193 (Ind. Sup. Ct.
2009).
Chapter 20 - Product Liability
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11. The portion of the capitalized language beginning with "IT MAKES NO..." and ending with
"OR OTHERWISE" is an attempted disclaimer of (among other things) the implied
necessary to disclaim the implied warranty of fitness, it would have disclaimed that implied
warranty under § 2-316 as well.
disclaimer and the remedy limitation unconscionable on the facts before it. It found each
procedurally unconscionable because Harris was a large national seed producer and Martin a
did not know of the change and thus were in little position to protect themselves from its
consequences. When making its unconscionability determination, the court considered the
disclaimer and the remedy limitation together.
12. Croskey v. BMW of North America, Inc., 532 F.3d 511 (6th Cir. 2008). Yes. The district
court erred in preventing Croskey from admitting evidence from prior similar incidents in
order to prove a negligent design claim. “[U]nder Michigan law, a plaintiff must show that
the product was ‘not reasonably safe for its foreseeable uses’ and that a ‘risk-utility analysis’
light of certain factors ‘the manufacturer exercised reasonable care in making the design
choices it made.’” Prentis v. Yale Mfg. Co., 421 Mich. 670, 688, 365 N.W.2d 176 (1984).
Under Michigan's risk-utility test, a plaintiff must show:
(1) that the severity of the injury was foreseeable by the manufacturer;
(6) that the omission of the available and practicable reasonable alternative design
rendered the defendant's product not reasonably safe.
The court held under this theory, admitting evidence of substantially similar incidents is not
266333, 2007 WL 1345866 (Mich.Ct.App. May 8, 2007).
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13. Traditionally, product misuse was a complete defense for the defendant in a strict liability
14. The two possible tests are the foreign-natural test and reasonable expectations of the
consumer test. The modern trend is to adopt the latter test, which in this case would seem to
require proof that the Goo Goo cluster was defective and unreasonably dangerous. The court
considering the case denied the defendants’ motion for summary judgment and held that the
(D. Neb. 2008).
15. The Minnesota Supreme Court refused to let that state's privity provision, which resembles
parties such as employees of firms that failed because of the defendant's breach of warranty.
1997).
16. No. As the text states, goods need not be perfect to be merchantable. Here, the car had
accumulation of defects makes the car a "lemon." Taterka v. Ford Motor Co., 271 N.W.2d
653 (Wis. Sup. Ct. 1978).
17. Concerning the implied warranty of merchantability claim, Ford argued that it should be
the defective product itself cannot be recovered in a case brought on a tort theory. The
18. In adopting the Restatement (Third) approach, the court held that the plaintiff in a design
of the alternative design renders the product not reasonably safe.” The court also noted that
19. Yes to both. Under a strict liability theory, GM could be held liable even though nothing
it did or failed to do caused Mr. Babcock’s truck to leave the highway and strike a tree. The
Chapter 20 - Product Liability
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Corp., 299 F.3d 60 (1st Cir. 2002).
20. The court answered with the following response:
“[N]one of the conditions stated in the question precludes imposition of liability, but
determining whether a product is unreasonably dangerous, the product's utility to its
intended market must be balanced against foreseeable risks associated with use by its
VI. ANSWER TO ONLINE RESEARCH PROBLEM:
The case is Williamson v. Mazda Motor of America, 131 S. Ct. 1131 (2011). The Supreme Court
