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Product Liability and Breach of Contract

Manufacturers and sellers can be held strictly liable for defective products that cause injury, regardless of contract privity or negligence. In breach of contract scenarios, sellers can cancel contracts and recover damages, while buyers have remedies such as obtaining specific performance or rejecting nonconforming goods. Special circumstances may modify available remedies, such as in cases of accidental destruction of goods or impractical delivery methods.

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Dimitar Zelenkov
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26 views1 page

Product Liability and Breach of Contract

Manufacturers and sellers can be held strictly liable for defective products that cause injury, regardless of contract privity or negligence. In breach of contract scenarios, sellers can cancel contracts and recover damages, while buyers have remedies such as obtaining specific performance or rejecting nonconforming goods. Special circumstances may modify available remedies, such as in cases of accidental destruction of goods or impractical delivery methods.

Uploaded by

Dimitar Zelenkov
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Product liability

Manufacturer / seller of defective product may be liable to injured party under theory of strict liability, protecting
consumers from unsafe products. To hold a manufacturer/seller liable the following elements are required:
Defendant is in the business of selling/manufacturing the product
The product was in an unreasonably dangerous condition (defective) when it left the seller’s control
The unreasonably dangerous condition caused the plaintiff’s injury/damages
Manufacturers/sellers are liable despite
No privity of contract with injured party
Ignorance of defect
Lack of negligence
Lack of due care exercised by injured party
Liability for injury from defective product may not be disclaimed.

Breach of Contract
Seller’s Remedies
When a buyer is in breach, the seller may
Cancel the contract
Recover damages
Damages may include
If they cannot be resold – the contract price of the goods
If they can be resold – the difference b/n the contract and sales price
Incidental damages for costs incurred as a result of the buyer’s breach
Punitive damages are not available.
Buyer’s Remedies
A seller is in breach
by not shipping goods or
by shipping nonconforming goods.
Nonconforming goods include a combination of conforming and nonconforming goods.
When goods are not shipped, the buyer may
Obtain specific performance if the goods are unique
Cover the contract by acquiring goods elsewhere and recovering the excess cost from seller
When nonconforming goods are shipped, the buyer may void the contract. The buyer
May
reject all, some, or none of the goods shipped
avoid costs incurred in relation to the rejected goods
Must
notify the seller of the rejection
give the seller an opportunity to cure the defect on a timely basis
follow reasonable instructions from the seller in disposing of rejected goods
When partial payment is made to an insolvent seller, the buyer may recover or capture goods
identified to the contract that are in the possession of the seller under the right of replevin.
Special Circumstances – Remedies available to the parties may be modified by special circumstances
When goods are accidentally destroyed before the passing of title, the seller is released from
obligation to perform
When the agreed upon delivery method becomes impracticable, a practical alternative must be
tendered and accepted
A liquidated damages clause may specify the amount of damages to be received by a party in
the case of breach by the other, provided it is reasonable

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