As products’ safety is one of the primary responsibilities of supply chain members, it has been noted by legislators with the highest level of significance. Therefore, product liability is known as an issue which can jeopardize whole the business. There are many cases about companies who went bankrupt due to small potential liability issues which in normal circumstances nobody noticed and considered them as a factor. That is why only experienced and veteran attorneys handle product liability concerns and that is the reason why a company must consider product liability as one of its potential risks with high level of consequences. The present paper discusses the importance of product liability and how the product liability laws evolved from tort laws. The main issues which will be discussed in this paper are as follows: •
The different aspects of product liability based on tort laws, •
The effects of product liability cases on companies
Analyze three international business product liability cases •
Provide some advices for Canadian exporters in terms of tort law for product liability. Discussion
Undoubtedly, product liability is one of the most controversial legal concepts especially during the last 20 years. Before addressing the legal aspects of product liability laws, it is needed to have a clear definition of “Tort Law” and “Product Liability”. Tort law
Tort is “a private or civil wrong or injury, other than breach of contract, for which the court will provide a remedy in the form of an action for damages”. The purpose of tort law is to compensate the injuries or damages and it does not talk about punishment of offenders. Based on the common law tort law, regardless if the parties have a contract or not, a plaintiff can sue the defendant to cover his/her injuries if he/she can satisfy the court about following elements: 1.
The defendant owed a legal duty to plaintiff
Breaching of the duty by defendant
The damages are the result of defendant’s fault
Based on the Black Law Dictionary , product liability “refers to the legal liability of manufacturers and sellers to compensate buyers, users, and even bystanders for damages or injuries suffered because of defects in goods purchased”. The condition under which a manufacturer is liable is that the products must be unreasonably dangerous to users or customers. The defect can be created by a retailer, wholesaler, distributer or bailer as well as manufacturer. Types of product liability laws
The product liability laws have existed for a long time in different forms. During the time, tort laws for covering the compensation of injuries caused by defective products have been shifted toward “pro-consumer” in order to ease the conditions for injured people to obtain the compensations sooner and easier. As the impact of such evolutions in product liability laws, for example during 1973-1986, the number of filing cases for product liability in the United Stats’ federal courts increased fourfold. Motor vehicles, pharmaceutical and asbestos industries were the majority industries in these cases. The oldest form of product liability is “liability in contract” which in order to claim for any compensation, plaintiff needs to show a written contract including terms of the goods ‘quality specifications and terms of liability for any injuries due to these products. The problem of this form is that the plaintiff can just prosecute the direct seller and cannot file a legal action against manufacturer or whole the group. It should be mentioned that “warranties” are considered in Contract laws and assure the seller’s or producer’s claims about the sold products. “Negligence” is another type of product liability which is a result of “not meeting an applicable standard of care, with the inherent assignment of fault”. Another type of product liability law is “strict liability” which is “tort law that a manufacturer is responsible for...
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