India: An Analysis Of Strict Product Liability

Last Updated: 23 November 2015
Article by Rahul Pandey

Introduction:

Strict Product Liability has evolved from the theory of Strict Liability which has itself developed from an English Case called Rylands vs Fletcher1 which is supposed to be the progenitor of the doctrine of Strict Liability. In that case a reservoir broke through an abandoned mine and flooded an active mine. The active mine owners sued the abandoned mine owners, and won. The court held that "if a person for his own purpose brings on his land and collects and keeps there anything likely to do mischief if it escapes, must keep it at his peril, and if he does not do so, is prima facie answerable for all the damage which is natural consequence of its escape". Basically Strict liability in tort is the concept that in certain situation a defendant is liable for plaintiff's damages without any requirement on the part of the plaintiff to prove that the defendant was negligent.

In the line of the same theory, Strict Product Liability evolved for protecting consumers and it clearly cast the liability on the manufacturer, seller, or lessor of goods and they would be strictly liable, regardless of intent or the exercise of reasonable care, for any personal injury or property damage to consumers, users, and by-standers caused by the goods it manufactures, sells, or leases. In the matter of Greenman v. Yuba Power Products, Inc. 2, Supreme Court of California duly for the very first time held liable the manufacturer as in the instant case an injury was caused to an ultimate consumer by a defective power tool, the California Supreme Court assigned strict liability to the manufacturer who placed on the market a defective product even though both privity of contract and notice of breach of warranty were lacking. The ratio laid down by the Hon'ble Court clearly stated that "Strict liability does not rest on a consensual foundation but, rather, on one created by law. The liability was created judicially because of the economic and social need for the protection of consumers in an increasingly complex and mechanized society, and because of the limitations in the negligence and warranty remedies. The court's avowed purpose was "to insure that the costs of injuries resulting from defective products are borne by the manufacturer that put such products on the market rather than by the injured persons who are powerless to protect themselves."

Later on, the American Law Institute drafted and adopted Restatement (2d) of Torts §402A. It duly states that:

"(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if (a) the seller is engaged in the business of selling such a product and (b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.

(2) The rules stated in subsection (1) apply although (a) the seller has exercised all possible care in the preparation and sale of his product, and (b) the user or consumer has not bought the product from or entered into any contractual relation with the seller."

PRODUCT S LIABILITY --STRICT LIABILITY IN TORT :

Now the most important aspect of the whole theory is that, who may be held liable for damages caused by the defective products?

After the ruling put forward by the Supreme Court of California in the matter of Greenman v. Yuba Power Products, Inc, it was construed that any entity involved in the chain of distribution for a defective product may be held liable for injuries caused by the defect. Potentially liable parties include the manufacturer, distributor, and retailer of the product. Generally, to prevail on a strict product liability claim, a plaintiff must prove that an inherent defect in a product caused the damages claimed. In other words, the plaintiff must prove (1) that the product was inherently defective and (2) that the defect in the product caused the injury or damage. Both elements of the strict product liability claim must be specifically and independently proved. That to establish the first element of a strict product liability claim, a plaintiff must prove that the product was inherently defective. That is, the plaintiff must prove that an inherent defect existed in the product at the time the product left the custody and control of the manufacturer/ supplier/retailer. To establish the second element of a strict product liability claim, a plaintiff must prove that the damages were caused by the defect in the product. Proving that the product was inherently defective is not, by itself, sufficient to establish a prima facie product liability claim. A connection must be established between the inherent defect and the injury. A defendant in a product liability case is not liable for damages caused by a defective product unless the damages were actually caused by the defect in the product.

It can very well be summed up that in order to succeed or to prevail in a Product Liability claim under Torts, the Petitioner need to prove or has to show the essential elements of Product liability under torts and those are as follows:-

a. That the defendant was the manufacturer or the supplier,

b. That the product was inherently defective,

c. That the defect in the product existed when it left the defendant's possession,

d. That the defect in the product caused the injury and damage to the Plaintiff or to his property,

e. Plaintiff's injury resulted from a use of the product that was reasonably foreseeable to the defendant.

NO RECOVERY IN ABSENCE OF PHYSICAL INJURY:

It has been duly held in catena of judgments delivered by various courts of U.S.A that the doctrine of strict liability in torts would not be attracted where the Plaintiff has suffered only economic loss i.e neither physical injury nor any damages to his property. Hon'ble Supreme court of California in the matter of Seely vs. White Motor Co3. has clearly held that doctrine of strict product liability in torts does not apply to cases where "no blood has been spilled" as the economic loss is governed by the warranty provisions of Uniform Commercial Code. In the matter of Indelco Inc. vs Hanson Industries4, Court of Appeals of Texas, (14th District) has also held that no cause of action in strict liability could be maintained where only economic loss has been suffered by the Plaintiff. In the matter of Jim Walter Homes, Inc. v. Reed5, the Supreme court of Texas held that "the nature of the injury most often determines which duty or duties are breached, when the injury is only the economic loss then doctrine of Product liability would not be attracted. In another matter of Nobility Homes of Texas, Inc. v. Shivers6, the Supreme Court discussed whether a consumer in the plaintiff's position could bring a cause of action under section 402A of the Restatement (Second) of Torts 1 or the implied warranties of the Uniform Commercial Code when the consumer, without privity with the manufacturer, suffered only economic loss due to the defective product. The court concluded section 402A does not apply when only economic loss is suffered, but held the implied warranties provisions of the Uniform Commercial Code covered such situations.

Strict Product Liability and its applicability in India:

The jurisprudence relating to product liability in India has been constantly evolving and in the recent times the Indian courts have also adopted a pro-consumer approach while deciding on product liability claims. It would not be wrong to state that In India there is no specific statute which governs the product liability claims and the term product liability is also not defined under any Indian statute. In the absence of any specific Indian statute the Indian product liability law can be said to have been emerging from different Indian statues and the product liability claims could be ascertained under the following Indian statutes/ laws (hereinafter together referred to as "Indian Laws"): the Consumer Protection Act, 1986, the Sale of Goods Act, 1930, The Indian Contract Act, 1872. Notably in the matter of Airbus Industrie Vs.Laura Howell Linton7, the Hon'ble High Court of Karnataka has held in a plain and lucid manner that doctrine of Strict Product Liability does not exist in India.

Footnotes

1.(L.R. 3 H.L. 330)

2.(1963) 59 Cal.2d 57 [13 A.L.R.3d 1049]

3. (1965) 63 C2d 9, 18

4.14-97-00236-CV

5.711 S.W.2d 617, 618 (Tex.1986)

6.557 S.W.2d 77, 83 (Tex.1977)

7.1994(5)KarLJ63

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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