defective products

Strict liability for ultra-hazardous activities is entirely different from strict products liability.  Since strict liability has been applied to so-called dangerous or ultra-hazardous activities, the application has been limited to instances where the defendant has, for his own purpose, created an abnormal risk of harm to those surrounding him, and therefore should pay for any resulting injury.  Section 520 of the Restatement (Second) of Torts explains how one weighs the risk of harm emanating from ultra-hazardous activities against the appropriateness to its surroundings.  This is not, however, how one determines the applicability of strict liability in the area of defective products under Section 402A of the Restatement (Second) of Torts.

Section 402A has well-established standards for the concept of defectiveness, particularly when the defect was discovered through examining mismanufactured, misdesigned, and mismarketed products.  The best standard to determine whether the product is mismanufactured is the reasonable expectations test.  The risk-benefit analysis test, on the other hand, has emerged as the prevailing standard for determining misdesigned and mismarked products.

Strict liability for ultra-hazardous activities is concerned with the appropriateness of the defendant’s activities to the locale, while strict products liability requires the defendant to introduce a defective product into the stream of commerce that is unreasonably dangerous to the user or consumer.  These are two lines of reasoning that are distinct, separate, and independent of each other, and should never meet.

Section 402A of the Restatement (Second) of Torts forever changed the means by which an individual would be held liable for placing defective products into the stream of commerce.  Strict liability, which had previously been restricted to cases involving dangerous activities and wild animals, became a new cause of action in almost all product cases.  As a result, this section of the Restatement has been a catalyst to a multitude of litigation.  More causes of action have been brought alleging strict liability for injuries caused by a defective product than in any other area of tort law.

Now that almost twenty-five years have passed since the adoption of this rule, much of the early uncertainty associated with it has abated.  For the most part, the concept and its elements have been clearly established and universally accepted, making this a good time to look back, consider what the drafters of this section intended, and reflect on the judicial changes that have occurred as a result of its enactment. The apparent intent of the drafters has in some respects been altered, and the section has been extended to include events and individuals not mentioned in the original text.  This reflection on the section illustrates that the original Section 402A is not necessarily the law that is in effect today.

The firmware installed on IoT devices is responsible for their proper operation. It may have not only bugs, but also elements hidden from the buyer or the lack of any cybersecurity mechanisms. This is an extremely dangerous situation for any user, including professionals. The study introduces the applicable regulations in the field of producer responsibility for software deficiencies and errors, presenting significant lack of the protection of buyers from B2B and B2A sectors. The conclusions, pointing to the advisability of extending the regulations on defective products applicable to the consumer market, include de lege ferenda postulates.

In today’s fast-paced business world, buy-outs, takeovers, mergers, and other acquisitions are common occurrences.  As a consequence of this corporate turnover, the consumer plaintiff injured while using a defective product may find the search for the proper defendant is futile, simply because the product is now marketed by a different legal entity.  Generally, the consumer has no recourse against the manufacturer of the particular product which caused the injury if that manufacturer has since dissolved. 

This apparent unfairness, coupled with an increase in litigation of this nature over the last decade, has led to the judicial recognition of an exception to the traditional corporate law rule of successor non-liability—the so-called “product line” exception.  This exception encompasses a fact situation in which the successor corporation has purchased more than the physical assets of the seller.  Rather, the successor has purchased the entire business and continues to manufacture the original product and place it into the stream of commerce.

Texas courts have chosen not to adopt the product line exception, leaving consumers injured by defective products without the right to seek a remedy in a court of law.  This result seems to defy some of the most fundamental principles underlying the law of products liability.
It is time for Texas to recognize the changing marketplace and take note of the impact that this change has brought upon the individual consumer.

The product line theory of liability would serve this function as a logical extension of present product liability law.  Furthermore, to deny the adequate redress of an injury solely on the bases of a “corporate technicality” is the very antithesis of the function of modern day courts.  For all of these reasons, the best solution is the adoption of the product line exception in Texas.

The impact of Section 402A of the Restatement (Second) of Torts had far-reaching effects.  The most noticeable of these effects was that strict liability was accepted as a cause of action in almost all cases involving defective products.  As a result, there was an explosion of products liability litigation, and suits involving strict liability for defective products soon outnumbered all other tort cases.

Naturally, the vast number of lawsuits caused some confusion.  Courts interpreted some terms of Section 402A to include individuals and events not originally mentioned, while other terms, which at first were thought to be clear and concise, proved quite illusive.  One such term is “product.”  If one is held strictly liable for placing a defective “product” into the stream of commerce, or if one may escape strict liability by showing that no “product” was introduced into the marketplace, it is imperative to define the meaning of this term. 

In deciding products liability cases, courts have generally avoided the dictionary’s definition and have instead utilized a strict liability policy approach in the interpretation of the term, which has led to some unusual results.  Today, transactions involving traditional services, houses, land, blood, electricity, component parts, water, computer software, and ideas have all been held in one form or another to constitute a product.  Ultimately, without a clear and narrow definition of the term, only the ingenuity of plaintiffs and the willingness of courts to extend the protection of 402A will determine exactly how far the definition of the term “product” can be stretched.