Product Liability

Business, Legal & Accounting Glossary

Definition: Product Liability


Quick Summary of Product Liability


Product liability laws outline the responsibility of any company that manufactures, distributes or sells products, to only sell to the public goods which do not contain dangerous defects. The goal of product liability law is to reduce the number of dangerous products which reach the market and to protect consumers.

Under product liability law a company can be held liable for negligence, breach of warranty, misrepresentation or marketing defects (the product did not have adequate warnings or instruction for its safe use), design defects (the design of the product makes it dangerous when it is used as intended), and manufacturing defects (the product defect arose during the manufacturing process).

Strict liability law also allows a plaintiff to sue if the product is defective, the defect proximately caused their injury, and the defect rendered the product unreasonably dangerous. Under this standard, the consumer does not have to prove negligence.



What is the dictionary definition of Product Liability?

Dictionary Definition


n. the responsibility of manufacturers, distributors and sellers of products to the public, to deliver products free of defects which harm an individual or numerous persons and to make good on that responsibility if their products are defective.

These can include faulty auto brakes, contaminated baby food, exploding bottles of beer, flammable children’s pyjamas or lack of label warnings. Examples: Beauty Queen Hair Products makes a hair-permanent kit in which the formula will cause loss of hair to women with sensitive scalps, and Molly Makeup has her hair done at the Bon Ton Beauty Shop and suffers scalp burns and loss of hair. Molly has a claim for damages against Beauty Queen, the manufacturer. Big Boy Trucks makes a truck with a faulty steering gear, bought by Tom Holdtight. The gear fails and Holdtight runs off the road and breaks his back. Holdtight can sue Big Boy for the damages. The key element in product liability law is that a person who suffers harm need prove only the failure of the product to make the seller, distributor and/or manufacturer reliable for damages. An injured person usually need only sue the seller and let him/her/it bring the manufacturer or distributor into the lawsuit or require contribution toward a judgment. However, all those possibly responsible should be named in the suit as defendants if they are known.


Full Definition of Product Liability


The law of product liability is concerned with the circumstances in which the manufacturer, or supplier, of a defective product, can be compelled to compensate a person who is harmed or injured by that product. Product liability is a species of tort law, because in general the supplier and the purchaser will not have a contract.

One of the most obvious statements of product liability comes from the infamous Donoghue v Stevenson (1932). This was a tort case because the woman who allegedly became ill after consuming the dead snail was the one who purchased the ginger beer. So, in general, liability for defective products is governed by the ordinary law of Negligence. However, the case law suggests that courts expect a high level of responsibility on the parts of manufacturers. If a manufacturer attempts to defeat a negligence claim by showing that, despite what the claimant alleges, it took reasonable care in the production or handling of its product, it will be expected to produce evidence to that effect. Under The Consumer Protection Act (1987) the manufacturer’s obligations are even more stringent, amounting essentially to strict liability.

The Consumer Protection Act is somewhat more limited in scope than the law of negligence so, despite its no-fault provisions, there will be occasions where a claim in negligence is still worth pursuing.

Note that s.5 of tThe Unfair Contract Terms Act (1977) provides that liability for personal injury resulting from defective consumer products cannot be excluded by contract or notice.

State laws vary for product liability laws. Talk to a lawyer if you have more questions.


Cite Term


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https://payrollheaven.com/define/product-liability/
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Product Liability. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. January 27, 2021 https://payrollheaven.com/define/product-liability/.
Chicago Manual of Style (CMS):
Product Liability. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/product-liability/ (accessed: January 27, 2021).
American Psychological Association (APA):
Product Liability. PayrollHeaven.com. Retrieved January 27, 2021, from PayrollHeaven.com website: https://payrollheaven.com/define/product-liability/

Definition Sources


Definitions for Product Liability are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 30th April, 2020 | 25 Views.