Introduction to Legal Risk Management and product liability. To read more about Legal Risk Management and product liability, visit http://seoullegalriskmgmt.com

2.  Companies are exposed to massive risk in the
US or the EU due to product liability claims.
Product Liability Claims are often initiated
against a manufacturer in the US
 Definition- a manufacturer’s tort liability
resulting from a buyer’s, user’s or bystander’s
damage or injury due to a defective product.

3.  A. Product Liability Costs
 Product liability and recall cases, besides hurting a
company’s Brand-will entail many costs and expenses,
such as:
 1. Costs and related to product incidents, including
recall, retrofit, management and employee time, lost
profits.
 2. Legal costs.
 3. Insurance costs.
 4. Preventative costs -include loss control and risk
management programs.


4.  Product Liability Costs
 To implement a risk management program that
covers the legal risks related to product liability in a
specific jurisdiction look at :
 1. Legal theories related to Product Liability
 2. Legal defenses to Product Liability Claims

5.  B. Typical Legal Theories on which a Plaintiff May
Base a Products Liability Claim and Class Actions.
 1. Breach of Express Warranty
a) Express Warranty can be created by:
i. “Affirmation of fact or promise” made by the Seller to the Buyer
which relates to the product and becomes part of the basis of the
bargain.
ii. Advertisements, labels, literature, samples or models, catalogues,
brochures

6. 2. Breach of Implied Warranty
a) Implied Warranty of Merchantability is implied by
law in every contract with a merchant for the sale
of goods; a guarantee that product will be
merchantable (of commercially acceptable quality).
b) Implied Warranty of Fitness for particular purpose
– arises when the seller has reason to know that buyer
wants goods for a particular purpose and buyer is relying
on seller’s skill to select suitable goods.

7. 3. Negligence
 A manufacturer of goods has a duty to
use reasonable care in the design of goods so as
to protect those who will use them from an
unreasonable risk of harm while the goods are
being used for their expected. This duty extends to
unintended yet reasonably foreseeable, as well as
intended uses.

8.  To read more about product liability, visit
http://seoullegalriskmgmt.com