In: Accounting
What was perceived to be inadequate about warranty and negligence theories that necessitated the development of strict liability? . Briefly describe the doctrine.
Breach of warranty is based on contract law, a contract between you and the seller of the product. A warranty is like a guarantee. There are express warranties and implied warranties. An express warranty is a statement by the seller such as “this lotion will cure your baldness in thirty days.” An implied warranty is something that the law imposes on the seller. The two main implied warranties are merchantability and fitness for a particular purpose. Merchantability basically means that the product meet market expectations. A good example will be we all expect an automobile to come with a steering wheel. A warranty for fitness for a particular purpose basically means that this product will do the job for which it is intended. An example would be an off road truck should be able to be used off road.
Negligence means lack of ordinary care. If some person’s or company’s negligence causes a product to be defective, they can be liable for the harm caused. The negligent party can be the manufacturer, the designer, distributor and part supplier, or anyone else who is responsible for the product being defective.
This basis for liability is frequently used. It is not subject to the limitations of breach of warranty. With negligence, any party whose carelessness contributed to the product being the cause of the injury can be liable, not just the seller. Attempts to limit warranties don’t matter on a negligence claim.
Strict liability, like negligence, allows the injured party to seek compensation from whoever was responsible for the product being defective. Unlike negligence, the injured person does not need to discover who exactly failed to do their duty. Strict liability requires only that the product be defective and unreasonably dangerous.
Any party in the chain of commerce can be liable under strict liability: The manufacturer, distributor, seller, component parts supplier. This allows the injured party a cheaper, more accessible route to compensation, especially if the manufacturer is located in a foreign country. The distributor or seller in the United States can be sued without requiring that the foreign manufacturer be brought in by the injured person.