Causes of Action in Product Liability

AuthorJamie Cassels - Craig Jones
1. Causes of Action in Product
In modern society the phenomena of mass production and distribution of
products has made “product liability” a fertile field of mass litigation,
involving the modern law of contract and tort. However, the production
and distribution of products, and the injuries caused by them when they
are somehow defective, is a very old social problem and we begin this chap-
ter with a brief historical account of the law of contract and tort in relation
to products in order to provide a context to understand the shape of the
present law, its current constraints, and its possible future directions.
1) Evolution of Contract-Based Product Liability
The law of implied warranties dates back to the fifteenth century, its evolu-
tion parallelling that of contract law. The doctrine first arose as a tort for
uttering a false statement inducing a sale, under the assumption that the
seller had actually deceived the buyer into making a bad purchase by utter-
ing an untrue statement as to the good’s quality. The action was conceived
in the nature of misrepresentation, with the buyer detrimentally relying
upon the seller’s skill and judgment. While the buyer’s damages were lim-
ited to the difference between the price paid and the value of the goods
received, the buyer could succeed without being required to prove that the
seller knew about the defect or that his or her statement was actually untrue.
In the eighteenth century, the development of the law of the sale of
goods was extended further, allowing for the bringing of warranty actions
in assumpsit. The courts continued to search for a breach of contract, on the
basis of a stated promise, permitting the seller to claim expectation dam-
ages in the amount of the difference between the value of the goods sold
and the value that they would have been worth had they been fit for their
intended use.
By the nineteenth century, implied warranties were assessed from the
perspective of an implied promise. In the early 1800s an English court held
that, in a sale of goods by a person dealing in those goods, there was an
implied promise that the goods would be of “merchantable” quality, provid-
ed that the buyer had not had an opportunity to inspect the goods before sale.
In Gardiner v. Gray,1for example, Lord Ellenborough stated the following:
I am of the opinion … that the purchaser has the right to expect a saleable
article answering the description in the contract. Without any particular
warranty, this is an implied term in every such contract. Where there is no
opportunity to inspect the commodity, the maxim of caveat emptor does
not apply. He cannot without a warranty insist that it shall be of any par-
ticular quality or fitness, but the intention of both parties must be taken
to be, that it shall be saleable in the market under the denomination men-
tioned in the contract between them.
The action remained a contractual one but no longer required an express
promise: it was accepted that a seller warranted that his or her goods would
be reasonably fit for ordinary use regardless of the intent of the parties. The
courts further determined that the doctrine of implied warranties should
not be limited to financial losses incurred by the actual sale by measuring
the difference between the value of the goods paid for and the value of the
goods received. Rather, it was recognized that damages could be measured
according to the injury suffered through the use of the chattel. The courts
therefore began to allow for consequential damages on the basis that the
seller should be liable for all damage that ought reasonably to have been
contemplated as liable to result from a breach of promise.
The notion that a seller of goods provides a warranty as to their fitness
without making an express representation has been codified in Canada
1 (1815), 171 E.R. 46 [emphasis added].
through English and later Canadian (provincial) legislation such as the Sale
of Goods Acts.2These Acts will be the subject of further discussion later in
Part One of this book.
An action for liability under the Sale of Goods Act may succeed if a prod-
uct defect is established; however, the requirement of privity of contract pre-
vails and plaintiffs must also meet a number of specific requirements set
out in the legislation. Therefore, unless there is provincial consumer protec-
tion legislation in place, an injured party will have a difficult time succeed-
ing against a manufacturer pursuant to the notion of implied warranties.
In summary, while implied warranties are not solely creatures of
statute, the courts have tended to limit their application to cases involving
sales, recognizing that warranties are little more than implied promises
between individuals. This has meant that manufacturers, distributors,
retailers, and suppliers of defective products have been named, often with-
out success, as defendants in product liability actions. How can the law jus-
tify its limitation of liability to a finding of an agreement between sellers and
buyers? In many cases, after all, it is not the actual sale that occasions the
loss, for individuals can be easily injured by products and objects that they
themselves have not purchased. The continuing individual focus of the law
of contract means that it cannot yet play a robust role in large-scale claims.
2) The Evolution of Tort-Based Product Liability
Until early in the twentieth century, claims relating to product liability were
almost exclusively limited to the law of contract. The concept of privity of
contract — the notion that only the parties to a contract can claim damages
for a breach — was applied to manufactured goods, with a predictably con-
straining effect. What made things more difficult for jurists, however, was
that during the nineteenth century they were confronted by a wide range
of cases involving strangers. The advent of railroads and motor vehicles
created a series of largely unforeseen injury situations involving persons
who were in no way directly connected with one another, least of all
through contract. The initial reluctance of the English common law courts
to address this new reality is well illustrated by the 1842 decision of Win-
terbottom v. Wright,3in which a passenger brought a suit for personal
injuries against the supplier of a mail coach that had broken down. The
court limited the liability of the manufacturer and supplier on grounds of
a lack of privity of contract. In so holding, Lord Abinger declared that “the
Causes of Action in Product Liability 13
2 For instance Sale of Goods Act, R.S.O. 1990 c. S-1; Sale of Goods Act,R.S.B.C. 1979, c. 370.
3 (1842), 152 E.R. 402 [hereinafter Winterbottom].

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT