Question

In: Economics

Describe the impact of “An unavoidably unsafe product” on the stakeholders supported with the stakeholders’ map?

Describe the impact of “An unavoidably unsafe product” on the stakeholders supported with the stakeholders’ map?

Solutions

Expert Solution

An unavoidably unsafe product isn’t necessarily by its nature dangerous. Rather, it’s a product that is incapable of being made safe for its intended and ordinary use. Courts generally look at 4 criteria to determine if a product is unavoidably unsafe: how the product was prepared, how it was marketed, the utility of the product compared to its risk, and whether there are any alternatives available.

There are some products which, in the present state of human knowledge, are quite incapable of being made safe for their intended and ordinary use. These are especially common in the field of drugs. An outstanding example is the vaccine for the Pasteur treatment of rabies, which not uncommonly leads to very serious and damaging consequences when it is injected. Since the disease itself invariably leads to a dreadful death, both the marketing and use of the vaccine are fully justified, notwithstanding the unavoidable high degree of risk which they involve. Such a product, properly prepared, and accompanied by proper directions and warning, is not defective, nor is it unreasonably dangerous.

Under strict products liability, the injured consumer need only prove that a defect in the product made it unreasonably dangerous, and this defect caused his injury. The manufacturer, distributor, and seller of the product can then together be held liable for the consumer’s injury, unless they can show that the product was not defective or they had no part in the defect. This change means that the law favors the consumer rather than the manufacturer

Strict liability in tort essentially imposes legal liability for certain types of actions and their resultant injuries on the actor, regardless of his or her lack of negligence or intent to injure. A presumption of responsibility is placed on individuals in certain legally identified circumstances (e.g., abnormally dangerous activities and the distribution of defective products) because of the seriousness of the potential injuries and because the primary ability to prevent such injuries seems to reside with the actor.

Strict liability is imposed on these individuals even if they exercised ordinary care under the circumstances and would not be legally responsible for negligence because the belief is that with their primary control over the situation or injury inducing subject matter, they have both the duty and the ability to prevent such injuries. In formalizing the legal obligation under strict liability, policy makers endeavor to persuade potential plaintiffs to take appropriate safety precautions.

In 1997, the Restatement of Torts: Products Liability clarified the meaning and application of defective products to include defects in manufacturing, design, or warnings, which together encompass packaging, instructions, testing, and pretty much everything else surrounding the production and distribution of a product. Because the doctrine is based on tort theory and not on contract law, every party in the chain of distribution (manufacturers, assemblers, packagers, wholesalers, distributors, retailers, and lessors) is strictly liable for its role in the distribution of a defective product to anyone injured (i.e., every consumer, user, purchaser, lessee, family member, guest, employee, indirect beneficiary, or bystander) by its use and foreseeable misuse. The business community and its insurers, realizing the potential breadth and severity of this liability, have proposed reforms in strict liability laws since the 1980s.


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