Product Liability

Meaning

● Product liability refers to the legal responsibility of a manufacturer, seller,

service provider, or product distributor to compensate a consumer for an
Product liability refers to the legal responsibility of a manufacturer, seller,
service provider, or product distributor to compensate a consumer for any
harm caused by a defective product or deficiency in service related to the
product harm caused by a defective product or deficiency in service related to
the product.
● Under the Consumer Protection Act, 2019, product liability provisions
empower consumers to file a product liability action for compensation
without needing to prove negligence, as long as certain conditions are met.
 Chapter VI - Product Liability

Section 82: Application of this Chapter

This Chapter shall apply to every claim for compensation under a product liability action
by a complainant for any harm caused by a defective product manufactured by a product
manufacturer or serviced by a product service provider or sold by a product seller

● Product liability action: A complaint filed by a person claiming compensation for

harm caused by a defective product or deficiency in service.

● Harm: Includes death, injury, illness, mental agony, damage to property, etc.

● Product manufacturer, product seller, and product service provider are

clearly distinguished to identify responsibility.
 Section 83 - Product Liability Action

A product liability action may be brought by a complainant against a

product manufacturer or a product service provider or a product seller,
as the case may be, for any harm caused to him on account of a defective
product.

● Who can be held liable under Product Liability

1. Product manufacturer
2. Product Service provider
3. Product Seller

Each of them can be held individually or jointly liable depending on

the role they played in placing the product in the market.
 Section 84 - Liability of Product Manufacturer
(1) A product manufacturer shall be liable in a product liability action, if—
(a) the product contains a manufacturing defect; or
(b) the product is defective in design; or
(c) there is a deviation from manufacturing specifications; or
(d) the product does not conform to the express warranty; or
(e) the product fails to contain adequate instructions of correct usage to
prevent any harm or any warning regarding improper or incorrect usage.
(2) A product manufacturer shall be liable in a product liability action even if
he proves that he was not negligent or fraudulent in making the express
warranty of a product.
A manufacturer is liable if:

● The product has a manufacturing defect.

● The product is defective in design.

● There is a deviation from manufacturing specifications.

● It lacks adequate instructions or warnings.

● It does not conform to express warranty.

Example:

A car company sells a car with faulty brakes that were not tested properly. The consumer is
injured in an accident due to brake failure. The manufacturer is liable.
 Section 85 - Liability of Product Service
Provider
A product service provider shall be liable in a product liability action, if—

(a) the service provided by him was faulty or imperfect or deficient or inadequate in
quality, nature or manner of performance which is required to be provided by or under
any law for the time being in force, or pursuant to any contract or otherwise; or

(b) there was an act of omission or commission or negligence or conscious withholding

any information which caused harm; or

(c) the service provider did not issue adequate instructions or warnings to prevent any
harm; or

(d) the service did not conform to express warranty or the terms and conditions of the
contract.
A product service provider is liable if,
● The service was deficient in manner, quality, nature, or
performance.
● There was negligence in handling or providing the product
-related service.
● The service did not conform to safety standards.
● the service did not conform to express warranty or the
terms and conditions of the contract.
 Section 86 - Liability of Product Seller
A product seller who is not a product manufacturer shall be liable in a product liability action, if—

(a) he has exercised substantial control over the designing, testing, manufacturing, packaging or labelling
of a product that caused harm; or

(b) he has altered or modified the product and such alteration or modification was the substantial factor
in causing the harm; or

(c) he has made an express warranty of a product independent of any express warranty made by a
manufacturer and such product failed to conform to the express warranty made by the product seller
which caused the harm; or

(d) the product has been sold by him and the identity of product manufacturer of such product is not
known, or if known, the service of notice or process or warrant cannot be effected on him or he is not
subject to the law which is in force in India or the order, if any, passed or to be passed cannot be enforced
against him; or

(e) he failed to exercise reasonable care in assembling, inspecting or maintaining such product or he did
not pass on the warnings or instructions of the product manufacturer regarding the dangers involved or
proper usage of the product while selling such product and such failure was the proximate cause of the
harm.
● They exercised substantial control over the product
design or testing.
● They altered or modified the product.
● They sold a product with actual knowledge of the
defect.
● They made false or misleading warranties.
● The manufacturer cannot be identified or is outside
India.
● The seller has given the express warranty of a product
independent of warranty given by the manufacturer.
 Section 87 - Exceptions to Product Liability
Action

● If at the time of harm, the product was misused, altered, or

modified.
● The consumer did not follow adequate warnings or
instructions.
● The product was purchased by an employer for use at work (in
some conditions).
● The product was used knowingly with risks.
Offences and
Penalties
 Section 88
Penalty for non-compliance of direction of
central authority.
● Not following direction as per section 20 and
21, shall be punished with imprisonment for a
team which may extend to six months or with
fine which may extend to twenty lakhs
rupees, or with both.
 Section 89
Punishment for False or misleading advertisement.
shall be punished with imprisonment for a term which may
extend to two years and with fine which may extend to ten
lakh rupees; and for every subsequent offence, be punished
with imprisonment for a term which may extend to five years
and with fine which may extend to fifty lakh rupees.
 Punishment for manufacturing for sale or storing,
selling or distributing or importing products
containing adulterant -Section 90
(1) Whoever, by himself or by any other person on his behalf, manufactures for sale or stores
or sells or distributes or imports any product containing an adulterant shall be punished, if
such act—

(a) does not result in any injury to the consumer, with imprisonment for a term which may
extend to six months and with fine which may extend to one lakh rupees;

(b) causing injury not amounting to grievous hurt to the consumer, with imprisonment for a
term which may extend to one year and with fine which may extend to three lakh rupees;

(c) causing injury resulting in grievous hurt to the consumer, with imprisonment for a term
which may extend to seven years and with fine which may extend to five lakh rupees; and

(d) results in the death of a consumer, with imprisonment for a term which shall not be less
than seven years, but which may extend to imprisonment for life and with fine which shall not
be less than ten lakh rupees.
2) The offences under clauses (c) and (d) of sub-section (1) shall
be cognizable and non-bailable.

The court may further suspend licence for two years in case
of the first commission of mistake and later commission may
cancel the license.
 Punishment for manufacturing for sale or for
storing or selling or distributing or importing
spurious goods - Section 91
Spurious goods: Spurious goods are counterfeit or fake products designed to
resemble genuine goods,
a. causing injury not amounting to grievous hurt to the consumer, with
imprisonment for a term which may extend to one year and with fine
which may extend to three lakh rupees;
b. causing injury resulting in grievous hurt to the consumer, with
imprisonment for a term which may extend to seven years and with fine
which may extend to five lakh rupees;
c. results in the death of a consumer, with imprisonment for a term which
shall not be less than seven years, but may extend to imprisonment for life
and with fine which shall not be less than ten lakh rupees.
 Consumer Protection in the Digital Age
1. Data Privacy and Protection

Data privacy and protection refer to the rights and processes that ensure consumers’ personal data (such as names,
addresses, payment information, browsing habits) is collected, stored, and used responsibly by businesses in the digital space.

Key Principles:

● Informed Consent: Users must be informed and give permission before their data is collected.

● Purpose Limitation: Data should be used only for the stated purposes.

● Data Minimization: Only necessary data should be collected.

● Security Measures: Businesses must implement safeguards to prevent data breaches.

Example:
A food delivery app collects your address and payment details. Under data protection norms, it must:

● Inform you about what data it collects and why.

 Consumer Protection in the Digital Age
2. Good Practices in Consumer Support

Definition:
These include responsive, transparent, and effective ways in which businesses assist consumers with queries, complaints,
and post-purchase services in the digital environment.

Key Elements:

● Accessible Help Channels: Live chat, email, toll-free numbers.

● Timely Responses: Addressing issues promptly.

● Clear Policies: Easy-to-understand return/refund and warranty terms.

● Multilingual and Inclusive Support: Catering to diverse consumer bases.

Example:
An e-commerce platform offers:

● 24/7 chatbot and human customer care.

 Consumer Protection in the Digital Age
Digital Consumer Rights (Consumer Consultation)

Definition:
Digital consumer rights ensure consumers are protected in online transactions and interactions. These rights include the
right to be informed, to choose, to be heard, to redressal, and to privacy. Consumer consultation involves engaging
consumers in the policy-making process to reflect their concerns.

Key Rights Include:

● Right to Information: Knowing about product details, terms, and risks.

● Right to Choice: Not being forced into subscriptions or products.

● Right to Redressal: Access to fair complaint resolution systems.

● Right to be Heard: Participation in shaping digital policies (consultation via forums, feedback surveys, etc.)

Example:

● A ride-sharing app provides full fare breakdown and terms of cancellation upfront (right to information).