When a customer files a product liability lawsuit against your business, it can feel like a direct attack on your reputation and financial stability. But what if the defect wasn't your fault?
Many businesses are part of a larger supply chain, meaning the real issue could stem from a manufacturer, supplier, or distributor. If you're being unfairly blamed for a product defect, here's what you need to know about protecting your business and shifting liability to the responsible party.
Can You Be Sued for a Defective Product That You Didn't Manufacture?
Yes. In Florida and across the U.S., businesses involved in selling a product—whether as a retailer, wholesaler, or distributor—can be held liable if a consumer is harmed by a defect. This is known as strict product liability, which means the injured party doesn't need to prove negligence—only that the product was defective and caused harm.
Even if your business didn't manufacture the product, you can still be sued if:
- You were part of the distribution chain (retailer, wholesaler, etc.).
- The product was defective when it reached the consumer.
- The defect caused injury or damage.
The good news? If another party in the supply chain is responsible for the defect, you can take legal action to shift liability away from your business.
Who Is Responsible for the Defect? Understanding the Supply Chain
Determining who is at fault depends on where the defect originated. Here's a breakdown of potential culprits:
- The Manufacturer: If the defect occurred during design or production, the manufacturer is likely responsible. This includes errors in the materials used, design flaws, or production mistakes.
- The Supplier: If a third-party supplier provided faulty materials or components that led to the defect, they may bear liability.
- The Distributor or Wholesaler: If the product was damaged or altered in a way that made it dangerous while being transported or stored, the distributor may be at fault.
- The Retailer: If your business knowingly sold a defective product or failed to provide necessary warnings, you could share liability.
How to Prove That Another Business in the Supply Chain Is at Fault
If you're facing a product liability lawsuit but believe another party is responsible, here's how to build your defense:
1. Gather Evidence to Trace the Defect's Origin:
- Obtain purchase orders, contracts, and invoices that show where the product came from.
- Keep detailed records of inspections and quality control measures your business took.
- Preserve customer complaints and return records related to the product.
2. Review Your Contracts for Indemnification Clauses: Many business-to-business contracts contain indemnification clauses, which require one party to cover the legal costs or damages of another if a defect occurs. If your supplier or manufacturer agreed to indemnify you, they may be required to assume responsibility for the claim.
3. File a Cross-Claim or Third-Party Lawsuit: If you're sued, you may have the right to bring a cross-claim (if the responsible party is already part of the lawsuit) or a third-party complaint (if they are not). This shifts liability to the business that caused the defect.
4. Use Expert Testimony: Product liability cases often require expert witnesses—such as engineers, safety specialists, or industry professionals—to analyze the defect and determine its origin. This can help prove that the issue did not originate with your business.
5. Challenge the Plaintiff's Claims: A plaintiff must prove that the product was defective and caused harm. Your legal team can challenge:
- Whether the product was actually defective or misused.
- Whether the plaintiff's injuries were caused by the defect or something else.
- Whether the lawsuit was filed within Florida's product liability statute of limitations (typically four years from the date of injury).
How Florida Law Protects Businesses in the Supply Chain
Florida law provides some protections for businesses that were not responsible for a product defect. One key law is the "Innocent Seller" Defense, which may allow retailers or distributors to be dismissed from a lawsuit if they had no role in manufacturing or altering the product.
Additionally, under comparative fault laws, liability may be divided among multiple parties based on their level of responsibility. This can help reduce or eliminate your business's financial exposure.
Steps to Protect Your Business from Future Product Liability Claims
Even if you successfully fight a lawsuit, it's important to take proactive steps to prevent similar legal battles in the future:
- Strengthen Supplier and Manufacturer Contracts: Ensure contracts include clear indemnification clauses that protect your business from defects caused by another party.
- Implement Quality Control Measures: Regularly inspect products before selling them, and maintain records of all inspections.
- Carry the Right Business Insurance: Product liability insurance can cover legal fees, settlements, and damages if a claim arises.
- Provide Clear Disclaimers and Warnings: If a product requires special handling or has known risks, include proper warnings to reduce your liability.
What to Do If You're Facing a Product Liability Lawsuit
At Ayala Law, we specialize in business litigation, commercial disputes, and product liability defense.
We can help you:
- Investigate and gather evidence to shift liability.
- File cross-claims or third-party lawsuits against the responsible party.
- Negotiate settlements or aggressively defend your case in court.
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.
