PRODUCT LIABILITY

Product Liability | International Journal of Research (IJR)

INTRODUCTION

Every manufacturer or seller has the duty to compensate for any injury or harm caused by products manufactured or sold by them to a consumer. Every consumer has the right to seek remedy in case he has been injured or has suffered loss due to a defective product. This responsibility of the manufacturer or the seller with regard to their product is termed as product liability. The laws related to product liability has always been changed and improved in a developing country like India. The rapid growth of litigation in field of product liability has been an effective tool for Consumer Protection. It has played a crucial role for protection of rights of consumer, since in the early times the principle of ‘Caveat Emptor’ has been followed which created difficulties for the buyer. Soon the principle of ‘Caveat Venditor’ was introduced which made the situation a little difficult for the sellers as well. Today the law has changed, the goal of product liability laws is to help protect consumers against dangerous and defective products .The seller/manufacturer\service provider is liable for any kind of defect the product carries. The Consumer Protection Act, 2019 lays down provisions relating to product liability.

HISTORY

In Kautilya’s Arthashastra, the laws relating to weight and measures at that time are depicted. Similarly, Yajnavalkya has given his views on weights and measures and adulteration of food, punishments with regard to it in Yajnavalkya samhita. Main provisions of Yajnavalkya samhita cover transactions related to sale and purchase. It also has regulations related to the sale of sample. He took into account the hard conditions faced by the purchaser and framed rules for their protection by giving them time to judge the utility of goods purchased and giving them the right to return goods. One fine elaborative mechanism of pricing policy and profit ratio charged by traders on the sold goods has been prescribed in the samhita. He also developed a concept of constructive theft. It includes the widespread deceitful practice of goldsmiths. The malicious practices ornament makers were prevalent in the ancient times as well and in order to protect the consumers from the same he (Yajnavalkya) prescribed certain standard norms. These norms included rules regarding ornaments so that the goldsmith cannot claim on great wastage and in case they do, they will be punished for the same.

In the modern period, before the independence, the consumer protection was dealt with English common law. The common law included these distinctive heads of law:

  • Torts
  • Contract
  • Fiduciary relationship

After 1950, the union government introduced various legislations involving consumer protection enforceable in the trial courts. Failure on the part of customer to prove these listed statutes meant that the customer had to restore damage under torts, contract or fiduciary relationship.

  • Productive relative legislations:
  • Drug control act, 1950
  • Prevention of food adulteration act,1954
  • Essential commodities act, 1955
  • Sales of goods act, 1930                  

In 1986, the union parliament passed the landmark Consumer Protection Act, 1986 (COPRA), which was not only the first general consumer protection law in India but also establishes a different chain of consumer courts. This was in order to enforce laws and ensure speedy trials, the proceeding were summary in nature. Amendments were made in the act in 1991, 1993 and most importantly in 2002 and recently in 2019 which has continuously strengthen the power of courts.

PRODUCT LIABILITY

There was no definition for the term in any Indian statues earlier. There were some of the statutes that touched the term of product liability, they were:

  • The Consumer Protection Act, 1986;
  • The Indian Contracts Act 1872;
  • The Sale of Goods Act 1930;
  • The Drugs and Cosmetics Act, 1945; and
  • The Prevention of Food Adulteration Act, 1954

But none of them exactly described the concept. Recently, in the Consumer Protection Act, 2019 product liability was defined as, “the responsibility of a product manufacturer or product seller, of any product or service, to compensate for any harm caused to a consumer by such defective product manufactured or sold or by deficiency in services relating thereto.” The new act laid down provisions which did not only put the responsibility on manufacturer but on the seller as well.

Donoghue v. Stevenson[1]

In this case A purchased a bottle of ginger beer from a retailer for appellant who was his lady friend. Some of the drink was poured into the glass and were consumed by the appellant. When the remaining drink was poured in the glass a decomposed body of snail appeared. The appellant has alleged that she was greatly affected by the content of the drink. The bottle was opaque and had a metal cap, so the contents could not be ascertained by inspection. The defendant claimed that they did not owe the appellant a duty of care and that the appellant was a stranger to the contract. In this case, it was held that all the people who use the products are consumer to the manufacturer and he will owe a duty of care to all. The manufacturer thus will be held liable.

Grant v. Australian Knitting Mills Ltd.[2]

In the case, Dr. Grant who is the plaintiff, had bought an undergarment which was manufactured by the defendant, Australian Knitting Mills Ltd. Dr. Grant was contracted by dermatitis. This was because the defective condition of the garment due to excess sulphite. It was found that the manufacture has negligently left it in the process of manufacturing. The buyer sued the retailer and the manufacturer. The Privy Council held that the defendants were held liable to the plaintiff.

Arvind Shah v. Kamlaben Kushwaha[3]

In this case, the complainant alleged that his son died due to the administration of a wrong treatment by the doctor. The State Commission upholding negligence provided a compensation of five lakh rupees. It must be noted that services have to be rendered with due care and in accordance with the law.

Poonam Verma v. Ashwin Patel and Ors[4]

In this case, the respondent who was a homeopathic doctor prescribed allopathic medicines for the treatment of a patient. The patient did not respond to it and died subsequently. The Respondent was held liable and was ordered to pay Rs.3 lakhs as compensation. 

LIABILITIES

The seller is liable for any product if he:

  • exercises reasonable control over the designing, testing, manufacturing, packaging or labeling of the product,
  • he altered or modified the product and such modification was a substantial factor in causing the harm,
  • he has made an express warranty on his own which is independent of the warranty made by a manufacturer and such product failed to confirm to such express warranty made by the product seller which caused the harm.
  • In case the identity of the manufacturer is not known or if known the service of notice or process or warrant cannot be affected on the manufacturer or it the manufacturer is not subject to the law which is force in India,
  • If the product seller has failed to exercise reasonable power in assembling, inspecting or maintaining the product. Also if he did not keep in mind the warnings or instructions for the product provided by the manufacturer while selling such product and such failure was the proximate cause of the harm caused.

The service provider is liable for any product if he:

  • Provides faulty, defective or deficient services
  • Gives inadequate information regarding use of product
  • Does not confirm to express warranty relating to the terms and conditions of product

The manufacturer is liable for any product if it includes:

  • A manufacturing defect,
  • A defective design,
  • A deviation from the manufacturing specifications,
  • Lack of adequate instructions warning regarding improper or incorrect usage to prevent harm,
  • And does not confirm to an express warranty given by the manufacturer.

EXCEPTIONS:

There are some exceptions with regard to product liability claim. In these cases the manufacturer/seller/service provider will not be liable of the product.

  • If the instructions or warnings prescribed on a product are commonly known to a consumer.
  • If the product was purchased to be used at a workplace and the product manufacturer/seller had provided warnings to such employer.
  • If the product was legally meant to be used under observation of an expert and the same was informed to the consumer.
  • If the harm caused is due to the negligence of consumer itself.

STATUTES INVOLVED IN PRODUCT LIABILITY:

Product liability has a broad ambit and the liability can fall in various legislations. The liability can also depend on the nature, civil or criminal. Some other legislation involved are:

  • The Foods Adulteration Act, 1954
  • The Food Safety and Standards Act, 2006
  • The Drug & Cosmetics Act, 1940
  • The Indian Penal Code, 1860
  • The Sales of Goods Act, 1930

CONCLUSION

Product liability and consumer protection are different in every country but the basic reasoning behind the act is same. The motive of legislations is to provide safety to consumer against deceitful practices of traders. This is in impact from ages while the concept of product liability is new to us. Even thought there have been many changes from the past decades and the laws are made and improved for the sake of people. In India the consumer is provided with the right to choose and the right to information, thus the system is made transparent. The protection acts not only safeguards rights of consumer but of the seller too. This is because a seller is prone to risks and injury too.


[1] [1932] UKHL 100

[2] HCA 35, (1933) 50 CLR 387

[3] [III (2009) CPJ 121]

[4] 1996 AIR 2111, 1996 SCC (4) 332