2. Unreasonably Dangerous Products
A product is reasonably dangerous if—”
• It is dangerous beyond the reasonable expectations of the ordinary consumer.
• A less dangerous alternative was economically feasible but the manufacturer failed to produce it.
C. PRODUCT DEFECTS
The Restatement (Third) of Torts: Products Liability replaces some of the hard–to-understand distinctions that
developed when courts applied different theories of liability to the same defects. The Restatement (Third)
categorizes product defects into the following three types.
1. Manufacturing Defects
2. Design Defects
A product “is defective in design when the foreseeable risks of harm posed by the product could have been
reduced or avoided by the adoption of a reasonable alternative design by the seller or other distributor, or a
predecessor in the commercial chain of distribution, and the omission of the alternative design renders the
product not reasonably safe.”
a. Test for Design Defects
To determine whether a product has a design defect, the focus is on its actual design and the rea–
sonableness of that design. To succeed on this theory, a plaintiff has to show that there is a reasonable
alternative design. A defendant is liable only when the harm was reasonably preventable.
b. Factors to Be Considered
Factors that a court may consider are listed in the text.
ENHANCING YOUR LECTURE—
SCHOOL SHOOTINGS AND STRICT LIABILITY
Over the past decade, school shootings have led to lawsuits that pose a novel question for the courts: Can the
producers and distributors of violence-laden media, such as video games and Internet transmissions, be held liable for
the shootings? In one case, for example, the plaintiffs were the parents of several students who were killed by their
classmate, Michael Carneal, in a 1997 high school shooting in Kentucky. The plaintiffs sued Meow Media, Inc., and
other companies (the defendants), alleging that the defendants should be held liable for the shootings. The plaintiffs
contended that the defendants’ products—including videos, video games, and Internet transmissions—“desensitized”
Carneal to violence. Carneal’s indifference to violence, in turn, “caused” the shootings.
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THE NEGLIGENT CLAIM
One of the plaintiffs’ claims was that the defendants had breached a duty of care by distributing such violent
products and were thus negligent. The court, however, did not agree with the plaintiffs that the defendants owed a
duty of care to the victims. Recall from Chapter 4 that a defendant’s duty of care extends only to those who are injured
as a result of a foreseeable risk. In the court’s eyes, a school shooting was not a foreseeable risk for the defendants.
Thus, the court dismissed the negligence claim.
WERE THE “PRODUCTS” DEFECTIVE?
The plaintiffs also alleged that the defendants should be held liable in strict product liability because the violence
contained in their products rendered those products “defective.” The court never reached the issue of whether the
products were defective, however, because it concluded that the violence communicated by the videos, video games,
and Internet transmissions was not a “product.”
FOR CRITICAL ANALYSIS
Another defense raised by the defendants in this case was that the expression in their videos, video games, and
Internet transmissions was a protected form of speech under the First Amendment. Should such speech ever be
restrained in the interests of protecting society against violence? Why or why not?
a. James v. Meow Media, Inc., 300 F.3d 683 (6th Cir. 2002). For another case on this issue in which the court reached similar conclusions, see
Sanders v. Acclaim Entertainment, Inc., 188 F.Supp.2d 1264 (D.Colo. 2002).
ANSWER TO CRITICAL ANALYSIS QUESTION IN THE FEATURE—
INSIGHT INTO ETHICS
Why would some legislators believe that the six-part voluntary labeling system for video games is not sufficient to
protect minors? One reason that some legislators may believe a labeling system for video games is not sufficient to
protect minors is the ubiquity of warnings—they are so numerous that users and other consumers most likely routinely
ignore them. Another reason might be that the proposed system is voluntary—on that basis it may be least used where
3. Inadequate Warnings
A product “is defective because of inadequate instructions or warnings when the foreseeable risks of harm
posed by the product could have been reduced or avoided by the provision of reasonable instructions or
warnings by the seller or other distributor, or a predecessor in the commercial chain of distribution, and the
omission of the instructions or warnings renders the product not reasonably safe.” Important factors are
noted in the text.
CASE SYNOPSIS—
Case 22.2: Wyeth v. Levine
Diane Levine visited Plainfield Health Center in Vermont for treatment of a migraine headache. A physician’s
assistant gave her Phenergan (an antihistamine used to treat nausea) with a syringe (the IV-push method). The drug’s
label, which the FDA had approved, did not warn that this method was more risky than the IV-drip method. Phenergan
caused Levine to suffer gangrene and the amputation of her forearm. She filed a suit in a Vermont state court against
Wyeth, the drug’s manufacturer, alleging that the label’s warning was inadequate. Levine obtained damages of $7.4
million. The Vermont Supreme Court affirmed. Wyeth appealed.
The United States Supreme Court affirmed. The FDA’s approval of Phenergan’s label did not preempt Levine’s
claim against the drug’s manufacturer. An injured party can bring a state law action for product liability based on an
inadequate warning if a federal agency approved the label. Wyeth argued that it would not be possible to change
Phenergan’s label to comply with the state–law duty underlying Levine’s claim without violating Wyeth’s federal
…………………………………………………………..……………………………………………………………………
Notes and Questions
The Court stated that the FDA has “traditionally regarded state law as a complementary form of drug regulation.”
Why did the federal agency take this view? State-law remedies protect consumers by motivating drug manufacturers to
produce safe and effective drugs and give adequate warnings. In noting the federal support for state actions, the Court
cited the FDA’s limited resources and drug makers’ “superior access to information about their drugs.” State actions
can reveal new risks and harms, and motivate drug makers to disclose those problems promptly. The availability of
state causes of action “may motivate injured persons to come forward with information.” Failure–to-warn actions, in
particular, lend force to the FDCA’s premise that manufacturers, not the FDA, bear primary responsibility for their drug
546 INSTRUCTOR’S MANUAL TO ACCOMPANY BUSINESS LAW, TWELFTH EDITION
labeling at all times.
Should liability be assessed against the physician’s assistant who administered the drug? Levine sued the health
center and its clinician, and these parties settled with her. The amount of the settlement reduced the amount that
Levine later obtained in the suit against Wyeth. In that later suit, Wyeth offfered evidence that the physician’s assistant
ANSWER TO “WHAT IF THE FACTS WERE DIFFERENT?” IN CASE 22.2
Suppose that the Phenergan label had contained a stronger warning against the IV-push method without explicitly
stating that the merhod should not be used. Would the result in Levine’s case have been the same? Discuss. In terms of
the legal question at issue, the result might have been the same. The Court ruled on the question of whether the
federal agency’s approval of the label preempted Levine’s claim under state law. The merits of that claim were not
before the Court. In terms of the assessment of liability and the amount of the award to Levine, however, the result
likely would not have been the same. The support for this award was the critical defect in the label: the lack of an
adequate warning about the risks of IV-push administration. If the label had contained a stronger warning, it may have
been found sufficient.
ANSWER TO “THE LEGAL ENVIRONMENT DIMENSION”
QUESTION IN CASE 22.2
In a 2006 preamble to a regulation, for the first time the FDA expressed the opinion that state-law actions
“threaten FDA’s statutorily prescribed role as the expert Federal agency responsible for evaluating and regulating
drugs.” What might have motivated this dramatic change in the agency’s traditional position? According to the Court in
a. Obvious Risks
There is no duty to warn about risks that are obvious or commonly known.
b. Foreseeable Misuses
There is a duty to warn of harm that can result from foreseeable misuse.
CHAPTER 22: WARRANTIES AND PRODUCT LIABILITY 547
D. MARKET-SHARE LIABILITY
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VI. Defenses to Product Liability
One defense is that there is no basis for the claim because the plaintiff has not proved its elements.
CASE SYNOPSIS—
Case 22.3: Boles v. Sun Ergoline, Inc.
Before using an Executive Tans tanning booth made by Sun Ergoline, Inc., Savannah Boles signed a release. The
form stated that the use of the booth is “at my own risk,” with no liability on the part of the operator or manufacturer.
Inside the booth, Boles’s fingers were partially amputated by an exhaust fan. She filed a suit in a Colorado state court
against Sun Ergoline, asserting a strict product liability claim. The court issued a judgment in the defendant’s favor
based on the signed release. A state intermediate appellate court affirmed. Boles appealed.
The Colorado Supreme Court reversed and remanded. “An agreement releasing a manufacturer from strict
products liability for personal injury, in exchange for nothing more than an individual consumer’s right to have or use
the product, necessarily violates the public policy of this jurisdiction and is void.” Giving effect to a release such as the
one in this case would “flatly thwart” the considerations underlying the theory of strict products liability. For example,
a maker would have little incentive to improve a product’s safety or to “spread the risk of loss” among its users. The
Restatements and cases decided in other jurisdictions are in “virtually universal agreement on this point.”
…………………………………………………………..……………………………………………………………………
Notes and Questions
Where should the line be drawn between an individual’s responsibility to take care of himself or herself, and
society’s responsibility to protect that individual? The question of determining the breadth of personal responsibility
society needs to provide a buffer between an individual and someone or something else—himself or herself, another
ANSWERS TO QUESTIONS AT THE END OF CASE 22.3
1. What did the court mean when it stated that strict product liability laws are “not fully congruent” with classical
tort law? A major difference between classical tort law and strict product liability has to do with fault. Strict liability,
2. Why would the enforcement of the exculpatory clause in this case conflict with the rationale underlying strict
product liability? One of the goals of strict product liability laws is to protect consumers against unsafe products.
Another goal is that the costs associated with injuries caused by their products should be borne by the manufacturers,
sellers, or distributors of those products rather than by consumers. This is because the manufacturers, sellers, or
distributors are in a better position to assume the burden, for they can pass on these costs to other consumers in the
form of higher prices. Enforcement of the exculpatory clause in this case would conflict with these goals by placing
liability for injuries on the consumer rather than on the manufacturer, seller, or distributor of the product. In other
words, the goal of protecting consumers from unsafe products would be thwarted, as would be the goal of having
manufacturers bear the cost burden created by the injuries caused by their products.
B. PRODUCT MISUSE
If a party used a product for something for which it was not designed, the party may not be able to recover in
strict liability (some courts hold, however, that if a misuse is reasonably foreseeable, a seller must take measures
to guard against it).
C. COMPARATIVE NEGLIGENCE (FAULT)
Most courts consider a plaintiff’s negligence in apportioning liability. Some courts will consider only a plaintiff’s
intentional conduct, however.
D. COMMONLY KNOWN DANGERS
If a plaintiff’s injury resulted from a commonly known danger, the defendant will not be liable.
E. KNOWLEDGEABLE USER
If a plaintiff’s injury resulted from a danger commonly known to similarly situated individuals (such as
electricians), the defendant may not be liable for failing to warn of it.
F. STATUTES OF LIMITATION AND REPOSE
A typical statute of limitations provides that an action must be brought within a specified period of time after the
cause of action accrues. For product liability actions, this is typically two to four years after a plaintiff discovers an
550 INSTRUCTOR’S MANUAL TO ACCOMPANY BUSINESS LAW, TWELFTH EDITION
injury. A statute of repose may also limit the time within which a plaintiff can file a suit, but typically a statute of
repose begins to run at an earlier date and runs for a longer time than a statute of limitations.
TEACHING SUGGESTIONS
1. Many students believe that unless sellers specifically guarantee certain qualities, buyers take the risk. It should be
emphasized that warranties exist because a sale occurs. A seller may be entirely ignorant of the warranties’ existence.
2. You might explain that the UCC rules concerning warranties and disclaimers provide a good illustration of the point
that the UCC is comparable to the rules of a game—the rules are the rules, unless the players agree to make their own.
the parties agree otherwise.
3. Discuss product liability from the point of view of the consumer movement. Students might be asked to discuss
some of the experiences that they or their relatives or friends have had with defective products. Appropriate
experiences could be used to focus an outline of the principles dealt with in this chapter by dissecting the experiences
to identify: (1) the nature of the injury, (2) the cause of the injury, (3) the nature of the fault (was the act that caused
the injury intentional? negligent? or one for which the question of fault is irrelevant?), (4) policy reasons for shifting
4. Ask students what they think are public policy reasons for not applying a theory of strict product liability. The
5. Under the crashworthiness doctrine, liability is imposed for defects in the design or construction of motor vehicles
that increase the extent of injuries if an accident occurs, even when the defects is not the cause of the accident. In
states that apply this doctrine, car crashes are seen as foreseeable misuses of cars. What does this mean for
automobile manufacturers? Cars must be designed so as not to subject occupants to enhanced injuries from
unreasonably dangerous features during a collision.
Cyberlaw Link
How are warranties for data based products created, limited, modified, and disclaimed? Should there be any
exceptions to the warranty rules when they are applied to sales or leases of software? In what circumstances might the
doctrine of strict product liability apply in the context of cyberspace?
1. What is the difference between express warranties and puffing? A seller’s statement about the value or worth of
2. If warranties are inconsistent, what are the priorities? If express and implied warranties are inconsistent: (1) express
3. How can implied warranties of merchantability and fitness for a particular purpose be disclaimed? Unless circumstances
4. What effect does a buyer’s examination of the goods before contracting have on implied warranties? If a buyer examines
5. When does a cause of action accrue for breach of warranty? A cause of action accrues for breach of warranty when a
6. In what ways does the Magnuson-Moss Warranty Act modify UCC rules on implied warranties? Implied warranties do not
7. To avoid liability on a negligence theory in a product liability suit, to what extent must a manufacturer exercise due care?
8. Under the Restatement (Second) of Torts, Section 402A, what are the requirements for a cause of action in strict
liability in a product liability suit? For a cause of action in strict liability in a product liability suit against a manufacturer, the
9. Can an injured bystander recover from a manufacturer or seller on a strict liability theory? Yes—all courts extend the strict
10. Other than immediate sellers and manufacturers, who may be subject to strict liability? The strict liability doctrine has
been expanded to include suppliers of component parts. Strict liability for personal injuries caused by defective goods extends
to lessors. (Some courts have held that a lease gives rise to a contractual implied warranty that the leased goods will be fit for
the duration of the lease—for instance, if U-Haul leases a trailer that has been improperly maintained, which causes an accident
in which the lessee is injured, the lessee can sue U-Haul).
ACTIVITY AND RESEARCH ASSIGNMENTS
1. A person who is not a party to a contract generally has no rights under it and cannot bring an action at common law for its
breach. The connection between contracting parties is called privity of contract. The UCC provides three optional, alternative
2. Students could be asked to research their state’s product liability law. Many state legislatures have modified the law in
various ways, and the changes are ongoing. One of the most common changes has been to limit the amount that an injured
3. In the last few years, there have been repeated attempts to enact a federal statute in the area of product liability. Ask
students to investigate some of the proposed legislation and analyze the effects each proposal would create.
4. Ask students to research the background of the Restatement (Third) of Torts: Products Liability and to report on the
considerations that went into its drafting.
554 INSTRUCTOR’S MANUAL TO ACCOMPANY BUSINESS LAW, TWELFTH EDITION
EXPLANATIONS OF SELECTED FOOTNOTES IN THE TEXT
Footnote 5: The Magnuson-Moss Warranty Act was designed to prevent deception in warranties by making them
easier to understand. The following is the text of the section of the Warranty Act (15 U.S.C. § 2302) that details information that
must be included when a warranty is written.
TITLE 15. COMMERCE AND TRADE
CHAPTER 50—CONSUMER PRODUCT WARRANTIES
§ 2302. Rules governing contents of warranties
(a) Full and conspicuous disclosure of terms and conditions; additional requirements for contents
and readily understood language the terms and conditions of such warranty. Such rules may require inclusion in the
(1) The clear identification of the names and addresses of the warrantors.
(2) The identity of the party or parties to whom the warranty is extended.
(3) The products or parts covered.
(4) A statement of what the warrantor will do in the event of a defect, malfunction, or failure to conform with such
written warranty—at whose expense—and for what period of time.
(5) A statement of what the consumer must do and expenses he must bear.
(6) Exceptions and exclusions from the terms of the warranty.
(7) The step-by-step procedure which the consumer should take in order to obtain performance of any obligation
(8) Information respecting the availability of any informal dispute settlement procedure offered by the warrantor and a
(9) A brief, general description of the legal remedies available to the consumer.
(10) The time at which the warrantor will perform any obligations under the warranty.
(11) The period of time within which, after notice of a defect, malfunction, or failure to conform with the warranty, the
(12) The characteristics or properties of the products, or parts thereof, that are not covered by the warranty.
(13) The elements of the warranty in words or phrases which would not mislead a reasonable, average consumer as to
the nature or scope of the warranty.
(b) Availability of terms to consumer; manner and form for presentation and display of information; duration;
(1)(A) The Commission shall prescribe rules requiring that the terms of any written warranty on a consumer product be
made available to the consumer (or prospective consumer) prior to the sale of the product to him.
(2) Nothing in this chapter (other than paragraph (3) of this subsection) shall be deemed to authorize the Commission
to prescribe the duration of written warranties given or to require that a consumer product or any of its components
be warranted.
(3) The Commission may prescribe rules for extending the period of time a written warranty or service contract is in
effect to correspond with any period of time in excess of a reasonable period (not less than 10 days) during which the
consumer is deprived of the use of such consumer product by reason of failure of the product to conform with the
written warranty or by reason of the failure of the warrantor (or service contractor) to carry out such warranty (or
(c) Prohibition on conditions for written or implied warranty; waiver by Commission
this subsection may be waived by the Commission if—
(1) the warrantor satisfies the Commission that the warranted product will function properly only if the article or
service so identified is used in connection with the warranted product, and
(2) the Commission finds that such a waiver is in the public interest.
The Commission shall identify in the Federal Register, and permit public comment on, all applications for waiver of the
prohibition of this subsection, and shall publish in the Federal Register its disposition of any such application, including
the reasons therefor.
(d) Incorporation by reference of detailed substantive warranty provisions
warrantor will perform any obligations under the warranty.
556 INSTRUCTOR’S MANUAL TO ACCOMPANY BUSINESS LAW, TWELFTH EDITION
The Commission may by rule devise detailed substantive warranty provisions which warrantors may incorporate by
reference in their warranties.
(e) Applicability to consumer products costing more than $5.00
The provisions of this section apply only to warranties which pertain to consumer products actually costing the
consumer more than $5.
(Pub.L. 93-637, Title I, § 102, Jan. 4, 1975, 88 Stat. 2185.)
Footnotes 16 and 17: Other states that have embraced the market share liability theory in DES cases include
Wisconsin (Collins v. Eli Lilly & Co., 342 N.W.2d 37 (Wis. 1984) and Florida (Conley v. Boyle Drug Co., 570 S.E.2d 275 (Fla. 1990).
Iowa (Mulcahy v. Eli Lilly & Co., 386 N.W.2d 67 (Iowa 1986), Missouri (Zafft v. Eli Lilly Co., 676 S.W.2d 241 (Mo. 1984), and Illinois
(Smith v. Eli Lilly Co., 137 Ill.2d 222, 560 N.E.2d 324, 148 Ill.Dec. 22 (1990) have declined to do so. Also, most of the federal
courts that have addressed the issue have declined to adopt the theory on the ground that it represents a radical departure
from the common law of the state in which each sits without a clear direction from the state’s supreme court.
Footnote 23: McDonald’s Corp. is based in Oak Brook, Illinois, with about 13,000 restaurants in the United States and a
43 percent share of the U.S. fast food market. McDonalds of New York (MNY) is based in Albany, New York, but owns and
operates fast food outlets throughout the state. Ashley Pelman, New York resident, and other teenagers who often ate at MNY
outlets, became overweight and developed adverse health effects. Their parents filed a suit in a New York state court against
McDonald’s and others, alleging that among other things the defendants failed to warn of the quantities, qualities, and levels of
The court granted the plaintiffs time to amend their complaint to state a viable claim. How might the plaintiffs amend their
complaint? The court indicated that if it were possible, the plaintiffs might “attempt to show that over-consumption of
McDonalds is different in kind from, for instance, over-consumption of alcoholic beverages or butter because the processing of
McDonalds’ food has created an entirely different—and more dangerous—food than one would expect from a hamburger,
chicken finger or French fry cooked at home or at any restaurant other than McDonalds. . . . If true, consumers who eat at
McDonalds have not been given a free choice, and thus liability may attach.”
CHAPTER 22: WARRANTIES AND PRODUCT LIABILITY 557
What might the defendants assert against this argument? The court stated that McDonald’s might claim “it is also a matter
of common knowledge that any processing that its foods undergo serve to make them more harmful than unprocessed foods.”
Of course, all parties would need to develop and prove their arguments.
ANSWERS TO ESSAY QUESTIONS IN
STUDY GUIDE TO ACCOMPANY BUSINESS LAW, TWELFTH EDITION
BY HOLLOWELL & MILLER
1. What is the difference between the implied warranty of merchantability and the implied warranty of fitness for a
particular purpose? Implied warranty of merchantability. An implied warranty of merchantability arises in every sale of goods
2. How defective must a product be to support a cause of action in strict liability in a product liability suit? Normally, a
558 INSTRUCTOR’S MANUAL TO ACCOMPANY BUSINESS LAW, TWELFTH EDITION
WARRANTIES AND PRODUCT LIABILITY
Shalene Kolchek bought a Great Lakes Spa from Val Porter, a dealer who was selling spas at the state fair. Porter
told Kolchek that Great Lakes spas are “top of the line” and “the Cadillac of spas” and indicated that the spa she was
buying was “fully warranted for three years.” Kolchek signed an installment contract; then Porter handed her the
manufacturer’s paperwork and arranged for the spa to be delivered and installed for her. Three months later, Kolchek
noticed that one corner of the spa was leaking onto her new deck and causing damage. She complained to Porter, but
he did nothing about the problem. Kolchek’s family continued to use the spa. Ask your students to answer the
following questions, using the information presented in the chapter.
1. Did Porter’s statement that the spa was “top of the line” and “the Cadillac of spas” create any type of warranty?
Why or why not? This statement did not create an express warranty, because it is a statement of opinion. Only a
value or worth of the goods, or makes a statement of opinion or recommendation about the goods, the seller or lessor
is not creating an express warranty.
2. If the paperwork provided to Kolchek after her purchase indicated that the spa had no warranty, would this be an
effective disclaimer under the Uniform Commercial Code (UCC)? Explain. A warranty disclaimer must be clear and
3. One night, Kolchek’s six-year-old daughter, Litisha, was in the spa with her mother. Litisha’s hair became
entangled in the spa’s drain and she was sucked down and held underwater for a prolonged period, causing her to
suffer brain damage. Under which theory or theories of product liability can Kolchek sue Porter to recover for Litisha’s
injuries? Product liability claims can be based on a warranty, negligence, misrepresentation, or strict liability theory.
4. If Kolchek had negligently left Litisha alone in the spa prior to the incident described in the previous question, what
defense to liability might Porter assert? In this situation, the dealer’s best defense would be comparative negligence. In
many jurisdictions, the plaintiff’s negligent or intentional actions may limit the liability of the defendant.
DEBATE THIS:
No express warranties should be created by the oral statements made by salespersons about a product. If no
express warranties could be created orally by salespersons, then consumers would demand written warranties for
which there would be no arguments about what was and what was not warranted by the retailer or manufacturer of a
product. This would avoid a “he said” or “she said” shouting match during litigation about liability for a defective
product.
In contrast, if salespeople could not create express warranties during their oral sales presentations, they would be
free to say just about anything about a product that they were trying to sell. They would know that no matter what
outrageous claims they made, their employers would not be bound by their oral statements.
CHAPTER 22: WARRANTIES AND PRODUCT LIABILITY 559