Question

In: Accounting

What are the contact theories of liability What are the common law tort theories of liability?

What are the contact theories of liability What are the common law tort theories of liability?

Solutions

Expert Solution

There are three contract theories of liability.

These are:

(1) Breach of warranty

(2) Negligence

(3) Strict liability.

Tort law

  • In common law jurisdictions, a tort is a civil wrong that unfairly causes someone else to suffer loss or harm, resulting in legal liability for the person who commits the tortious act. Although crimes may be torts, the cause of legal action is not necessarily a crime, as the harm may be due to negligence.
  • Legal injuries are not limited to physical injuries and may include emotional, economic, or reputational injuries, as well as violations of privacy, property, or constitutional rights. Torts include such varied topics as auto accidents, false imprisonment, defamation, product liability, copyright infringement, and environmental pollution (toxic torts). While many torts are the result of negligence, tort law also recognizes intentional torts, in which a person has intentionally acted in a way that harms another. In addition, when it comes to product liability, the courts have established a doctrine of “strict liability” for torts arising from injury caused by the use of a company’s product and/or service. Under “strict liability,” the injured party does not have to prove that the company was negligent in order to win a claim for damages.
  • Product liability is the area of law in which product manufacturers, distributors, and sellers are held responsible for the injuries caused by their products.

  • Products Liability identifies the following: manufacturing defect, design defect, failure to warn (also known as marketing defects).

  • Manufacturing defects are those that occur in the manufacturing process and usually involve poor-quality materials or shoddy workmanship.

  • Design defects occur where the product design is inherently dangerous or useless (and hence defective) no matter how carefully manufactured; this may be demonstrated either by showing that the product fails to satisfy ordinary consumer expectations as to what constitutes a safe product or that the risks of the product outweigh its benefits.

  • Failure-to-warn defects arise in products that carry inherent non-obvious dangers that could be mitigated through adequate warnings to the user, and these dangers are present regardless of how well the product is manufactured and designed for its intended purpose.


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