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PRODUCT LIABILITY IN TORT FROM EUROPEAN UNION’S LAW AND VIETNAMESE LAW PERSPECTIVES PRELIMINARY PROPOSALS FOR VIETNAM (luận văn thạc sỹ luật)

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HO CHI MINH CITY UNIVERSITY OF LAW
MANAGING BOARD OF SPECIAL TRAINING PROGRAMS

BACHELORS’ THESIS
REGULAR TRAINING
COURSE 34 (2009 – 2013)

PRODUCT LIABILITY IN TORT FROM EUROPEAN
UNION’S LAW AND VIETNAMESE LAW PERSPECTIVES
PRELIMINARY PROPOSALS FOR VIETNAM

STUDENT
: LA THI VAN ANH
STUDENT ID : 0955010003
CLASS
: HIGH STANDARD CLASS 34
SUPERVISOR : M.A DO THANH CONG

HO CHI MINH CITY, 2013


PREFACE
During my studying in HCM University of Law, I was trained to achieve a solid
legal knowledge. Every legal field was a new experience with joy and interests to me.
Gradually, I made up my mind and choose the issue of product liability in tort as a topic
for my bachelors’ thesis, since I had a lot of chances to approach this issue, especially in
the two subjects “UK law on product liability” and “Tort law”, and I am really interested
in this field. In this thesis I select European Union’s Law as a yardstick to compare to
Vietnamese Law because the legal situation in European Union was rather similar to that
in Vietnam. Due to difficulties in approaching reference documents in English, my
research might not be comprehensive.


The term “product liability” is rather new in Vietnamese legal science, so I hope my
thesis will be helpful for subsequent research in this issue.
I am greatly indebted to M.A Do Thanh Cong, who is supervisor of my thesis, for
his professional and emotional sharing and support.


ABBREVIATIONS
ADR – Alternative dispute resolution
EEC – European Economic Community
EU – European Union
ECJ – European Court of Justice
LPGQ – Law on Products and Goods Quality (Vietnam)
ODR – online dispute resolution
OPCI – Ordinance on the Protection of Consumers’ Interests (Vietnam)
VCC 2005 – Vietnamese Civil Code 2005
WTO – World Trade Organization


TABLE OF CONTENTS
INTRODUCTION ...................................................................................................... 1
CHAPTER 1 Overview of Product Liability in Tort .............................................. 5
1.1

The formation and development of the product liability doctrine ............... 5

1.2

Definition and nature of product liability in tort ......................................... 8

1.2.1 Definition and feature ............................................................................... 8

1.2.2 Nature of the product liability in the area of tort.................................... 10
1.3
1.3.1
1.3.2
1.3.3
1.3.4
1.4

Basic content of the product liability under the law of tort ....................... 10
Object of product liability ...................................................................... 10
Parties to a product liability action under the law of tort ....................... 14
Theories of product liability in tort ........................................................ 16
Seeking Damages ................................................................................... 20
The meaning of the product liability in tort in the legal system ................ 21

CHAPTER 2 The European Union’s Law on product Liability and some issues
on product liability in Vietnamese law. ............................................................................. 23
2.1

The European Union’s Law on product Liability under the area of tort ... 23

2.1.1 Overview of product liability law in European Union ........................... 23
2.1.2 Basic content of product liability law under the law of tort in European
Union
................................................................................................................ 25
2.2

Some issues on product liability in tort in Vietnamese law ...................... 36

2.2.1 Overview of product liability in tort in Vietnamese Law ...................... 36

2.2.2 Product liability in the recent regulations of law ................................... 37
CHAPTER 3 Some experience for Vietnam from studying the product liability
law in EU and some proposal to improve product liability in Vietnamese law ................ 48
3.1
Comparative comments on product liability in Vietnamese Law and
European Union’s Law under the area of tort ................................................................ 48
3.2
3.3

Some experience for Vietnam from studying product liability law in EU 50
Some proposal to improve product liability in Vietnamese law ............... 51


3.3.1 Amendment of legal grounds ................................................................. 51
3.3.2 Some specific proposals in legislating product liability law in Vietnam ...
................................................................................................................ 52
CONCLUSION ......................................................................................................... 55


INTRODUCTION
Economic development in Vietnam has been contributing to the increase in living
standard, which leads to higher demands in quality of products and services. However,
along with the qualified ones, products of bad quality and even dangerous for
consumption are still spreading in the market. Allocating legal responsibility for defective
products and low quality products is the main role of law on product liability and law on
protection of consumers. Recently, law on protection of consumers, especially provisions
on product liability, have been amended with a number of remarkable changes. These
changes have shortened the gap in product liability regulations between Vietnam and
other developed countries. However, because the product liability is quite new and there
are some other reasons, the provisions on this issue still contain some limitations.

Therefore, the role of protecting consumers is still not brought into play.
Globalization and global economy integration is a current trend in every fields of
socio-economy. Along with that trend, Vietnam also enforced legal provisions on product
liability, as well as protection of consumers, and ensure that those provisions are in
compliance with international law. In the meantime, studying more and more from the
other countries is necessary as well. Vietnam is currently in the process of integration,
which means Vietnam should study more experiences from other countries, especial
those in European Union, where consumers’ interests are very well protected.1 The
reason I chose law in European Union as the yardstick for analysis and comparison with
Vietnamese law is that the law on protection of consumers, including law on product
liability, in European Union is considered strict and is possibly applied, which leads to
the result that consumers in Europe is protected very efficiently and the legal situation in
European Union was rather similar to that in Vietnam.
Every country has its own ways of applying product liability. The liability of
manufacturers, producers, retailers for defective product, that was accepted broadly,
includes: Contractual liability and tortious liability. Contractual liability deals with the
situations where there is a contractual relationship between the plaintiff consumer and the

1

Pham Thi Phuong Anh (2009), Ground for Damages in Tort owing to Defective Products- A comparative study of

Vietnamese and English law, Masters’ Thesis, HCMC University of Law, p.6.

1


manufacturer directly 2 However, the tortious liability was applied mainly when there is
no contractual relationship between producer and the final consumer of the goods,
usually because of the existence of a long chain of distribution.3 The toutious liability is

also what my thesis will focus on.
1.

Necessity
Researching law on product liability in tort is a pressing issue, because:
-

Provisions on product liability in Vietnam are quite new and contain many
limitations, which do not ensure to effectively carry out the role of protecting
consumers.

-

The issue of protecting consumers as well as the concept of product liability is
currently important and pressing not only in Vietnam but also in the whole world.
Especially in this current period of time, while Vietnam is step – by – step building
the market economy, the issue of protecting consumers and provisions on product
liability need to be more concentrated and developed.

2.

-

Unqualified and defective goods and services are spreading increasingly on the
market, causing great damage to people’s health, and do not satisfy the consumers’
interests and expectations.

-

Carrying out provisions on protection of consumers and product liability is still in

reasoning but not actually making it effectively in practice.
Purpose

My thesis aims is to present an overview of product liability in tort in each of
Vietnam and EU, clarify the rationale of tortious product liability in EU’s Law and
Vietnamese Law. On those basis, it also gives some comparative opinions about the legal
issues above and draws out experiences in order to develop and improve the effect in
carrying out provisions on protection of consumers in Vietnam, proposes to amend
Vietnamese legal provisions, which helps to protect consumers’ legal rights and interests,
prevent in time producers from spreading low quality products and services in the market.

2

Demetrius Andreas Floudas, Some aspects of liability for defective products in England, France and Greece after

directive 85/374/EEC, p.1. Source: http://www.intersticeconsulting.com/documents/Product_Liability_EU.pdf,
05/08/2013 10.50.
3

Demetrius Andreas Floudas, above n 2, p.2.

2


3.

Methods
While researching the topic, the author used the following methods:
-


Analysis method: analyzing the provisions in EU’s law, Vietnamese law as well as

-

other countries’ law on product liability in tort
Synthesis method: giving a general view of the concept of product liability in EU’s
law and Vietnamese Law.

-

Listing method: listing the system of legal document related in order to easily
follow and to make some basis for the reasoning.
Comparative method: based on the analyzed concept, presenting some
comparative comments to clarify the differences in the issues of product liability in
EU’s law and in Vietnamese law.

4.

Delimitations

The main concern of my thesis is product liability in tort, although a number of
issues related to product liability in contract are also mentioned. During the research, the
author will analyze and compare product liability in tort in EU’s law and Vietnamese
law, in regard to such questions as: who are the potential plaintiffs and defendants to the
action? What degree of fault is required for liability? What kinds of loss can be
compensated? Which defences are available? And how are damages to be computed?
Beside, when analyzing law on product liability in EU, the thesis will mainly
concentrate on analyzing the provisions in Directive 85/374/EEC. When analyzing law
on product liability in Vietnam, the author will concentrate on analyzing the provisions in
The Law on Products and Good Quality 2007 and The Law on protection of Consumers’

Right 2010.
5.

Structure of the thesis
Along with the Preface, Conclusion and the Reference, my thesis is divided into 3

chapters:
• Chapter 1: Overview of Product Liability in Tort
• Chapter 2: The European Union’s Law on product Liability and some issues
on product liability in Vietnamese law
• Chapter 3: Some experience for Vietnam from studying the product liability
law in EU and some proposal to improve product liability in Vietnamese law
3


4


CHAPTER 1 OVERVIEW OF PRODUCT LIABILITY IN TORT
1.1

The formation and development of the product liability doctrine

“Product liability” plays an important role in many developed countries. Almost every
country has regulated the product liability institution to protect consumers efficiently and
comprehensively. Throughout the history, product liability regime has proved its purpose
in protecting consumers as well as manufacturers. “America is a nation which first
applies and develops product liability institution”.4 America’s legal instrument on
protecting the interests of consumers has a deep effect influence and spreads widely to
other countries all over the world. European Union, after studying from the success of

America’s product liability law, also developed their own product liability scheme and
showed their efficiently protection on consumer’s interest. In order to understand the
theory and practice of products liability law, it is necessary to understand its history and
development.
The formation and development of the product liability institution have a close
relationship with the fall of the doctrine of privity.5 Under the doctrine of privity, there is
a general rule that a contract creates no duty to the third parties and only the contracting
parties may demand to execute their rights or claim for their compensation.6 A famous
expert on product liability law, Professor William Prosser, has put it: “The history of
product liability law is really the history of an assault on the citadel of Privity. It is also
the history of how injured people were given back the keys to the courthouse, and
allowed a remedy at law for the injuries they suffered as a result of defective and unsafe
products”7. Based on this theory, contractual product liability was strongly favoring
manufacturers. A “general rule” was applied for a long time that a manufacturer could
4

M.A Tran Thi Quang Hong, Truong Hong Quang (2010), “Mot so van de chung ve che dinh trach nhiem san pham

va vai to cua che dinh nay duoi goc do bao ve nguoi tieu dung” (Some general issues on product liability institution
and its role under the view of protecting consumers), State and Law Review Journal, No.12/2010.
5

The doctrine of privity means that a contract cannot, ordinarily, confer rights or impose obligations arising under it

on

any

person


except

the

parties

to

it.

See

more

at:

http://www.lawteacher.net/contract-

law/privity.php#ixzz2U30U24IL, 12/07/2013 12.30.
6

M.A Tran Thi Quang Hong, Truong Hong Quang (2010), above n 4.

7

Denis W. Stearns, (2001), Product liability: A brief history of its early origins, Marler Clark, LLP, p.1. Source:

http://www.marlerclark.com/pdfs/intro-product-liability-law.pdf, 06/08/2013 8.30.

5



not be sued, even for negligence, if there is no contractual relationship between the
manufacturer and the plaintiff.
In the nineteenth century, the privity doctrine is used by defendants and judges against
plaintiffs in the cases that seeking compensation for damage from defective product.
Throughout the following decades, the doctrine of privity still governed cases on product
liability.
The seminal case MacPherson v Buick Motor Co of The Court of Appeals of New
York8 marked the rejection of the privity doctrine in the United States. In this case, the
plaintiff was injured when a wheel on the car he was driving, and which he bought from a
retailer, fell in to pieces, causing the car to crash. He brought an action for negligence
against the manufacturer. The court upheld the plaintiff’s claim and Buick Motor Co. had
to pay damages to Macpherson. This case determined that lack of privity is not a defense
if it is foreseeable that the product is likely to cause injury negligently to the consumers.
In the United States, the MacPherson precedent quickly became a norm in negligence
cases. As the theory of negligence is recognized, this exceptional case broke the doctrine
of privity, contractual relation is no more required. The reasoning of the case was
accepted and followed by courts in every state and it also began the development of the
tort of negligence in product liability cases.
After the destruction of the doctrine of privity, two types of action were available to
the consumers: an action in negligence and an action for breach of warranty9 in contract.
The liability for breach of warranty has a limitation, that it is only applied when the
parties are in privity of contract, because warranties were thought to be an integral part of
the sales contract10. In the case of express warranties, which could be said to be made to

8

http://www.courts.state.ny.us/reporter/archives/macpherson_buick.htm, 12/07/2013 11.05.


9

Warranties in a contract provided assurance to the effect that the goods complied with the contract description,

were fit for the purpose intended, and were of merchantabe quality. If a defective product injured a consumer, the
seller would be held liable for breach of warranty of the contract terms. Product liability law is concerned with three
types of warranties involving the product's quality or fitness for use: express warranty, implied warranty of
merchantability, and implied warranty of fitness for a particular purpose
10

http://legal-dictionary.thefreedictionary.com/Breach+of+Warranty 26/05/2013 09.10

6


the public generally, the privity requirement was abandoned during the 1930s.11 In the
case of implied warranty, exception to the privity rule did not extend beyond food, drink,
and similar products until the case Henningsen v. Bloomfield Motors Inc. of the New
Jersey Supreme Court.12 The showed its respect to two perspectives, which are liability
being extended to any manufacturer who placed his product into the stream of commerce
and promoted it in the market and privity to the original purchase no longer being
necessary. But Henningsen was still a contract case, base upon a theory of implied
warranty.13
During this time the courts developed two legal philosophies that ultimately came to
be used successfully in products liability cases: negligence and warranty.14 However, the
restriction on the use of the tort of negligence for consumer protection is the need to show
fault while warranties still were limited by the privity requirement.
“From 1930 to 1960, various legal writers and a few judges discussed the creation
of strict liability in tort for defective product”.15 According to extending various notions
of liability for breach of warranty, many courts in the America began to impose strict

liability upon manufacturers. The best-known judicial exposition of a tort theory of strict
liability in products liability cases was the case Escola v. Coca Cola Bottling Co. of
Fresno of California Supreme Court.16 In this case, the plaintiff is a waitress, whose hand
was wounded at work due to an explosion of the Cocacola bottle. During the litigation,
although the plaintiff was not able to prove the bottle producing Company’s fault, the
judge stated that the defendant that in charge of producing and distributed Cocacola’s
bottles to the market also had to held responsibility for the defects occurred in the usual

11
12

http://law.jrank.org/pages/9466/Product-Liability-Historical-Development.html, 12/07/2013 11.10.
www.casebriefs.com/blog/law/contracts/contracts-keyed-to-farnsworth/policing-the-bargain/henningsen-v-

bloomfield-motors-inc-2, 12/07/2013 11.07.
13

The School of Law – Washington University (1974), Strict Product Liability in Tort and the Meaning of

“Unreasonably Dangerous” Defects, Journal of Urban and Contemporary Law, Vol.8, p344-345. See more at:
http://digitalcommons.law.wustl.edu/urbanlaw/vol8/iss1/22/, 03/07/2013 09.30.
14

http://www.uic.edu/classes/eecs/eecs491el/LectureText/Lect10Text.htm, 04/07/2013 20.30.

15

http://law.jrank.org/pages/9466/Product-Liability-Historical-Development.html, 04/07/2013 19.50.

16


http://www.casebriefs.com/blog/law/torts/torts-keyed-to-epstein/products-liability/escola-v-coca-cola-bottling-co-

of-fresno/, 04/07/2013 20.50.

7


condition that the defendant himself couldn’t

predict.17 The final steps toward the

development of a tort theory of strict liability in products liability cases began in 1963
with the California Supreme Court decision in Greenman v. Yuba Power Products18. In
the landmark case Greenman v. Yuba Power Products, the Court adopted the doctrine of
strict liability in tort as a basis for product liability actions. This doctrine removed many
of the difficulties for the plaintiff associated with other theories of product liability.
Nowadays, with the constant increase of large scale goods production, the control of
goods’ quality will have some difficult and this will lead to the increasing of damage of
individual and property toward user, including the third party relating to the defective
product.19 In general, cases of product liability always tend to increase in developing
countries, therefore, the needs to stipulate by product liability law is objective in the
market economy, especially in the era of markets that are globalized nowadays.20
1.2

Definition and nature of product liability in tort

1.2.1 Definition and feature
Product liability is the area of law in which manufacturers, distributors, suppliers,
retailers, and others who make products available to the public are held responsible for

the injuries those products cause.21
Black’s Law Dictionary references product liability as an area of law, which “refers
to the legal liability of manufacturers and sellers to compensate buyers, users, and even
bystanders for damages or injuries suffered because of defects in goods purchased,”22 Product liability in the law of tort include product liability action in negligence and strict
product liability in tort.

17

Nguyen Thi Tuong Vi (2009), Trach nhiem san pham theo phap luat Cong dong Chau Au va Phap luat Viet Nam

(Product liability in EC’s law and Vietnamese law), Bachelors’ Thesis, HCMC Univerysity of Law, p6.
18

See Greenman v. Yuba Power Products (1963), http://online.ceb.com/CalCases/C2/59C2d57.htm, 04/07/2013

20.15
19

Nguyen Thi Tuong Vi (2009), above n 16, p6.

20

Ph.D Tang Van Nghia (2008), “Ban ve trach nhiem san pham trong kinh doanh quoc te” (Discussion on Law on

Product Liability in foreign trade), State and Law Review Journal, No.2/2008, p.41-49.
21

http://www.out-law.com/en/topics/commercial/supply-of-goods-and-services/product-liability-under-the-

consumer-protection-act/, 05/07/2013 11.25.

22

Black's Law Dictionary 5th edition (1979), West Publishing.

8


Product liability for protecting consumer’s interest is regulated in many legal
documents of many countries. America definites the notion of product liability in Section
402A Restatement (Second) of Torts 1965. It says that “One who sells any product in a
defective condition unreasonably dangerous to the user or consumer or to his property is
subject to liability for physical harm thereby caused to the ultimate user or consumer, or
to his property”.23 Meanwhile, “Council Directive 85/374/EEC of 25 July 1985 on the
approximation of the laws, regulations and administrative provisions of the Member
States concerning liability for defective products”24 of the European Union also regulate
the notion of product liability in Article 1: “the producer shall be liable for damage
caused by a defect in his product”.
From the definition of product liability, we can draw out the following feature while
doing a research about product liability in tort:
- Product liability in the area of tort is a liability to compensate for damage outside
a contract. This means the toutious liability is a kind of civil liability forcing the producer
responsibility to compensate for the damage that the consumer suffers from.

25

A

contractual relationship between the wounded party and the producer is not require in
determination of product liability in tort.
- The person who takes responsibility for damages has to be the one involved in the

process which transfers the product from producing to the consumers.26 This person may
be different in different countries depend on the national regulation on product liability
and have a link (direct or indirect) with the consumers. Base on the principle, every
product in the market will always has a guarantee holding responsibility for that product.
- The product is defective and there is a casual link between the and the damage.27
This is the necessary factor to determine the liability of the manufacturer, producer,
wholesaler to the people who suffered damage from the defective product. Only if the
consumer show the burden of proof of a product liability, which include the defect, the
damage and the causal relationship between the defect and the damage, will they be able
seeking damages.
23
24

http://biotech.law.lsu.edu/cases/products/402a-b.htm 05/08/2013 02.30
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31985L0374:en:HTML 05/08/2013 02.45

25

M.A Tran Thi Quang Hong, Truong Hong Quang (2010), above n 4.

26

Ibid.

27

Ibid.

9



1.2.2 Nature of the product liability in the area of tort
The regulation of product liability is a legal bind, which forces the manufacturers to
provide safe products with quality that fit consumers’ expectation. This helps improving
the consciousness and responsibility of the manufacturers toward their products and
therefore protecting consumers efficiently.
Product liability is either contractual or tortious. Different from contractual product
liability, tortious liability may arise if there was damage caused by defective product and
if there is no direct contractual relationship between consumers and producers,
distributors, importers. Product liability in tort compensates people who are injured by
defective product, and is unconcerned about privity of contract. Under the law of tort,
consumers can protect their rights by taking a cause of action which may be an action in
negligence or an action in strict product liability in tort against persons who designed,
manufactured, sold, or furnished that product. This helps protect consumers more
efficiently than the former legal regulation.
1.3

Basic content of the product liability under the law of tort

1.3.1 Object of product liability
Object of product liability in general and product liability in tort in particular is
defective consumption products. Most of the issues relating to the liability of the
manufacturers, and other sellers in the marketing chain, for physical harm arise from the
dangerousness of products. Only if the products are defective and they damages
consumers will the products be the object of product liability.
Object of product liability has the following characteristic: firstly, it is product that
is for consumption needs and is statutory regulated and secondly, that product has to be
defective.
1.3.1.1 Product for consumption needs
Definition of “product”

According to Karl Marx, product is the result of the working process, which serves
human’s needs. In the market economy, it is commonly considered that product is
anything which satisfies the market’s needs and brings benefit. Products can be used for

10


daily needs of human and can also be used for serving the needs of producing and other
needs.28
Black’s Law Dictionary references “product” as “goods produced or manufactured,
either by natural means, by hand, or with tools, machinery, chemicals, or the like.
Something produced by physical labor or intellectual effort or something produced
naturally or as a result of natural process as by generation or growth”29.
Products classification
- A product can be classified as tangible or intangible.30 A tangible product is a
physical object that can be perceived by touch such as a building, vehicle, gadget, or
clothing (good). An intangible product is a product that can only be perceived indirectly
such as an insurance policy (service).31
- Depend on whether the product is moveable or not, product is classified as real
estate or movable property.32
- Depend on the using purpose, product is divided into products for consumption
needs and products for production and business needs.33
Under the view of law research about product liability in several countries in the
world, product is mentioned as:
- Products in the form of tangible personal property (good or chattel) or intangible
(service).34
- Product for consumption needs (consumer-product).
-

Product which is regulated particularly by law.


1.3.1.2 Defective product in product liability under the law of tort
In general terms, product liability law requires a product to meet consumers’
ordinary expectations. A product which contains an unexpected defect or danger does not
28

Nguyen Thi Tuong Vi (2009), above n 16, p.9.

29

Black's Law Dictionary 6th edition (1990), West Publishing.

30

Nguyen Thi Tuong Vi (2009), above n 16, p.10.

31

http://en.wikipedia.org/wiki/Product_%28business%29 05/07/2013 08.45

32

Nguyen Thi Tuong Vi (2009), above n 16, p.10.

33

Ibid.

34


Mark A. Kinzie, Christine F. Hart (2001), Product Liability Litigation, West Legal Studies, p.3.

11


meet the ordinary expectations of the consumer.35 Victims of injury resulting from the
use of unsafe and defective products may be entitled to be compensated in tort.
In tortious product liability, the person who designed, manufactured, sold, or
furnished that product may be liable for prosecution if the product is dangerously
defective or unsafe. The defect in a product is not only the genesis of the product liability
claim but also the key to the successful recovery or defense of the claim.
Black’s Law Dictionary defines “defective condition” as follows:
“A product is in a defective condition and is unreasonably dangerous to the user
when it has a propensity for causing physical harm beyond that which would be
contemplated by the ordinary user or consumer who purchases it, with the ordinary
knowledge common to the foreseeable class of users as to its characteristics. A product is
not defective or unreasonably dangerous36 merely because it is possible to be injured
while using it.” 37
Under product liability tort, particularly in negligence suits, the manufacturer’s
conduct will determine the existence of a defect in the subject product. In strict liability
actions, the product itself will prove or disprove whether a defect existed in its
manufacturing, design, or warning.38
There are three main types of product defects pertaining to product liability in tort
which are manufacturing defects, design defects and marketing defects.39
Manufacturing Defects
Manufacturing defect will be determined if a product does not conform to design
specifications or performance standards,40 or it does not follow some material way from
35
36


http://injury.findlaw.com/product-liability/what-is-product-liability.html, 02/07/2013 23.15.
"Unreasonably dangerous" is defined as dangerous beyond the expectations of the ordinary consumer who

purchases it. Despite its great influence, this definition has not been universally accepted. Tort law does recognize
that some products beneficial to society cannot be made entirely safe. Prescription drugs and vaccines are notorious
examples. Such products are not considered defective simply because of their inevitable hazards; something else
must be wrong with them as well. Therefore, drug companies are not held strictly liable for a properly manufactured
product accompanied by appropriate directions and warnings. In sum, design defects are not the same as
manufacturing

defects.

See

more

at:

http://www.referenceforbusiness.com/small/Op-Qu/Product-

Liability.html#ixzz2V2QW5rN5, 02/07/2013 21.30.
37

Black's Law Dictionary 5th edition (1979), West Publishing.

38

Mark A. Kinzie, Christine F. Hart (2001), above n 29, p.4.

39


http://injury.findlaw.com/product-liability/what-is-product-liability.html, 05/07/2013 19.50.

12


otherwise identical units of the same product line.41 A defect in manufacturing occurs
when the manufacturer fails to (1) properly assemble a product, (2) properly test a
product, or (3) adequately check the quality of a product.42 For instance, a production line
worker might have failed to tighten a bolt adequately, or a sub-standard raw material has
been used. It is the easiest way to prove the manufacturing defect cases, because the
consumer can use the manufacturer’s own design or marketing standards to prove that the
product was defective.43
This type of defect is obvious and the courts have usually been willing to impose
liability for this type of defect in negligence cases. Tort law also applies the doctrine of
strict liability to help plaintiffs recover even if they cannot prove a manufacturer was
negligent.
Design Defects
A design defect occurs where the product has been manufactured according to
specification but there was a defective design at the pre-production or design stage.44 For
example, a chair that is designed with only three legs might be considered defectively
designed because it tips over too easily; an automobile manufacturer's design of a vehicle
with the fuel tank placed in such a position that it will explode upon low-speed impact
can be classified as defective.
Design defect claims often require a showing of negligence. Strict liability may be
imposed for an unreasonably dangerous design if the plaintiff can prove that “there was a
cost-effective alternative design that would have prevented the risk of injury”.45
Marketing Defects
Marketing defects include labeling of products improperly, insufficient instructions,
or the failure to warn consumers of product’s dangers.46 For example, tobacco companies

40

Ibid.

41

Mark A. Kinzie, Christine F. Hart (2001), above n 29.

42

William M. Pride (2013), Marketing 2014, 17th edition, Cengage Learning, p.135.

43

http://injury.findlaw.com/product-liability/what-is-product-liability.html, 05/07/2013 20.25.

44

See more at: http://www.biicl.org/files/1123_overview_uk.pdf, 06/07/2013 09.50.

Defects in a design can occur in many situations, when the product design makes it become dangerous irrationally
and accidentally harm consumers in a common way. The evaluation of the dangers by the defect in designs of
products, in many cases, is rather complicated.
45

http://injury.findlaw.com/product-liability/what-is-product-liability.html, 05/07/2013 20.35.

13



is sued by consumers due to the fact that they don’t have proper warning signs about how
dangerous and harmful for consumers’ health caused by tobacco, which caused them
cancers or other diseases; or a cough syrup that does not include on its label a warning
that it may cause dangerous side effects if taken in combination with another commonly
taken drug such as aspirin.47
In this type of defect, a negligent regarding a product or action in strict tort liability
may also give rise to a marketing defect claim.
1.3.2 Parties to a product liability action under the law of tort
1.3.2.1 The people having the right to claim for product liability (Potential
claimants)
When consumers are damaged by the defective product, they have the right to claim
for the product liability which made the people taking responsibility compensate for
them. Individuals, corporations, and other business entities may allege product liability
tort claims. The product liability plaintiff need not be the purchaser of the product and
need not be in privity with the defendant.
The people having the right to claim for product liability is not only the consumer,
but also users of the product such as the initial buyer, family members, presentee, and
even bystanders, or someone who leases the item or holds it for the purchaser. A claim is
also available to a child for prenatal injuries caused, for example, by its mother taking
defective drug when pregnant.48
The regulation of consumers in product liability includes persons who suffer
damage from the defective products will make an advantage in legal foundation for them
to sue the manufacturers, retailers and demand them to take responsibility in their
products.49

46
47

Ibid.
Types of Defective Product Liability Claims: http://www.nolo.com/legal-encyclopedia/types-of-defective-product-


liability-30070.html, 06/07/2013 10.25.
48

Geraint G. Howells, (2000), The Law of Product Liability, Butterworths Common Law Series, p.148.

49

From this point, “consumer” in product liability will also refer to the other related wounded parties.

14


1.3.2.2 The people taking responsibility in product liability (Potential defendants)
Under the law of tort, consumers who have been injured by a defective product and
wish to sue to recover for their injuries have to identify who might be liable and then
name them as defendants in product liability claim. Depending on the product,
identifying all of the parties that may be liable for an injury can be complicated. The
scope of potentially liable actors is wide: manufacturers, producers and anyone directly
involved in the manufacture of a product including designers, importers, assemblers,
repairers, retailers of second-hand goods with latent defects and retailers and distributors
marketing a defective product without adequate warnings or without conducting safety
tests and it can also extend to inspectors, regulatory/certification bodies and
governmental department.50
Manufacturer
Manufacturer is usually understood as anyone who produces a product, raw material
or product of a product; anyone who processes agriculture products (especially vegetable,
poultry, fish…etc); anyone attachs his/her name with the products (known as ownbrander); the ones imports into products into their country to sell it to others; the ones
provide the products if it is impossible to determine the manufacturer of the products.
If the defective product is part of a larger product, the manufacturer of the defective

part and the manufacturer of the whole product containing the defective part can be
claimed. For example, if you were injured by a car with an exploding battery, you would
bring your defective product liability claim against both the car manufacturer and the
manufacturer of the battery.51
Retailer
Retailers, like manufacturers, are engaged in the business of distributing good to the
public.52 Retailers are indispensable parts the chain of product distribution. Generally,
retailers are held liable because they have a duty to inspect and care for the product.

50
51

Read more at: http://www.biicl.org/files/1123_overview_uk.pdf, 05/08/2013 09.30.
Read

more

at:

http://www.nolo.com/legal-encyclopedia/defective-product-liability-claims-who-29606.html,

05/08/2013 08.05.
52

Jim Sinunu and Amy Kott (2011), Protections for Retailers: Development in Strict Product Liability and

Indemnification, West law Journal: Product Liability, Volume 23, Issue5, p.2.

15



Every country and even every state has its own rules on who is responsible for a
defective product so that the parties who may be liable will be different, depending on the
local product liability law.
In negligence, as a general principle, the duty to exercise ordinary care, and to
supply a safe and non-defective product, applies to everyone in the chain of
distribution.53 Therefore, under the law of tort, each individual person in the distribution
chain owes a duty of care to anyone who is likely to be injured by the defective product.
In strict tort liability anybody in the distribution chain may be held liable for the
injury or damage.
1.3.3 Theories of product liability in tort
In cases of product liability, there are three grounds for pursuing a claim and
seeking damages (three theories of recovery): contractual liability (breach of warranty);
common law tort of negligence (fault-based liability); and strict tort liability. In America
or some other countries, consumers can apply “misrepresentation”54 as a cause of action
for seeking damages.
All three theories may be found in any one lawsuit and, together, these three
theories comprise the entire scope of product liability litigation.55 The concentration will
be only focused upon the relevant rules of the law of tort. Product liability in tort refers
to breach of a duty of care (negligence) and breach of strict tort liability.
1.3.3.1 Principle of negligence
Negligence refers to the failure to do a proper or ordinary care to avoid injuring
someone to whom you owe the duty of care. It means that an individual who responsible
for a product either failed to do what should have been done or did something that should

53

http://www.marlerclark.com/pdfs/intro-product-liability-law.pdf, 05/07/2013 13.20.

54


Misrepresentation in the advertising and sales promotion of a product refers to the process of giving consumers

false security about the safety of a particular product, ordinarily by drawing attention away from the hazards of its
use. An action lies in the intentional concealment of potential hazards or in negligent misrepresentation. The key to
recovery on the basis of misrepresentation is the plaintiff's ability to prove that he relied upon the representations
that were made. Misrepresentation can be argued under a theory of breach of express warranty or a theory of strict
tort liability. Read more: http://prezi.com/7sgerxlyggob/contracts-and-warrenties/ 04/08/2013 10.05.
55

Mark A. Kinzie, Christine F. Hart (2001), n 29, p.1.

16


not have been done.56 Negligence case doesn’t require a contractual relationship between
the plaintiff and the defendant. The negligent party can be the manufacturer, the designer,
distributor and part supplier, or anyone else who is responsible for the defective
product.57
Four elements must be present for a product liability case to be considered under the
negligent tort principles:
• The defendant owes a duty of care to the plaintiff to act as a reasonably prudent
person under the same or similar circumstances58
• There is a breach of such a duty by the defendant
• There is an injury, including personal injury or property damage
• There is a causal link between the breach of duty and injuries
The duty to exercise care involves every phase of getting the product to the public and
the legal suit of the plaintiff will usually be based on the violation of one of the four
following duties:
- The product must be safe, non-defective and be assembling with appropriate care

to avoid manufacturing defects. 59 The plaintiff can sue for compensation by proving that
the defendant had violated the duty of care during the production process.
- The product must be inspected and tested at appropriate stages in the
manufacturing, distribution, and selling process.60 The plaintiff can sue for compensation
by proving that the defendant had violated the duty of care in checking for the product’s
quality, because the defendant didn’t supervise properly and therefore didn’t remove the
unsafe products before putting products into market.

56

http://law.jrank.org/pages/9465/Product-Liability-Theories-Liability.html, 04/08/2013 12.15.

57

http://www.yourwisconsininjurylawyers.com/library/products-liability-legal-theories.cfm, 04/08/2013 12.45.

58

In fact, the defendant does not owe everyone the same duty of care. For example, if a person trespasses on my

land, and he falls in my uncovered and unfilled pool and breaks his neck, it is his own tough luck that I did not
replace the light bulb that might have alerted him to this unknown danger. On the other hand, if you are my guest,
and you fall in my pool, I better hope that I have good insurance. From Denis W. Stearns (2001), above n 7.
59

Denis W. Stearns (2001), above n 7.

60

Ibid.


17


-

The product has to be packaged adequately and not itself dangerous or defective,

and contain appropriate warnings and directions for use. An otherwise non-defective
product can be made unsafe by the failure to provide adequate instructions for its safe
use.61 A claim can be made by the consumers if they prove that the defendant didn’t
include adequate warning so that the plaintiff would still be damaged even if he/she
followed the instructions and warnings while using the product.
- The product must be designed in a way that it is safe when used as intended.62 A
claim can be made depend on proving that the defendant had violated the duty of care in
designing the product, and therefore put the products in the market, causing damage to
the consumer.
“There were three exceptions: the manufacturer made a fraudulent representation as
to safety; failed to disclose a known danger; and the product was dangerous in itself".63
In fact, the legal suit can be successful even if the product is misused by customers,
as long as that misusage can be predictable by the manufacturer (or one of those parties
involved in the production process).64
The restriction in negligence basis is finding the person or party who was actually
responsible for the product being defective. This is not always clear and requires detailed
investigation. Beside, almost evidences that prove the fault of the manufacturer,
distributors are in their hands, it is really difficult for consumers to prove their fault.
Although some countries assume the manufacturer and distributor’s fault in certain cases,
the plaintiff’s burden of proof is still not any easier in other cases.65 That is the reason
why product liability is usually based on the principle of strict liability instead of
negligence.


61

Ibid.
Ibid.
63
http://www.biicl.org/files/1129_overview_uk.doc, 05/07/2013 23.30.
62

64

MA Nguyen Van Cuong (2006), Van de trach nhiem san pham trong phap luat Viet Nam (Product liability in

Vietnamese Law), Legal Science Information, No.04-05. Read more: http://sinhvienluat.vn/threads/nckh-sv-timhieu-ve-trach-nhiem-san-pham.9750/ 03/08/2013 10.55.
65

For instance, if violated in securing the product’s safety, in product’s quality, the manufacturer, distributor is

inevitably at fault in damaging customers.

18


1.3.3.2 Strict product liability
The most recent evolution in tort law, strict liability, has transformed the very
nature of product liability because it eliminates the entire question of negligence.66 Under
the doctrine of strict liability in tort, the plaintiff doesn’t have to prove the manufacturer’s
negligence, nor does it matter how much care was taken by the manufacturer to prevent
defects.
Strict product liability is liability without fault for an injury proximately caused by a

product that is defective and not reasonably safe.67 Any party in the chain of commerce
can be liable under strict liability: The manufacturer, distributor, seller, component parts
supplier.
In establishing the doctrine of strict liability in tort, the court rests on two legal
conclusions and these conclusions are two reasons for making the grounds of liability so
strict.
- The manufacturer can protect itself by taking steps to anticipate and prevent
hazardous product features, but the public can’t.
The manufacturer can protect itself by purchasing insurance and passing the cost
on to the public in the form of higher product prices; the consumer has no such
-

protection. The concept of strict liability also supports the plaintiff’s right to pursue
claims against members of the manufacturer’s distribution chain.
To win a case related to strict product liability, the damaged party must prove:68
-

The defective product which contain the unreasonable dangerous.
There is damage, which could be about health, life or property damage.

-

Casual link between the defect and the damage.

The concept of strict liability not only provides more practical grounds for suing the
manufacturer, but also supports your right to pursue claims against members of the

66

Read


more:

http://www.referenceforbusiness.com/small/Op-Qu/Product-Liability.html#ixzz2VShAliCI,

03/08/2013 15.50.
67

Denis W. Stearns (2001), above n 7.

68

Nguyen Thi Tuong Vi (2009), above n 16, p.19.

19


manufacturer’s distribution chain.69 Strict product liability also regulated the associated
liability between individuals in the distribution chain. This regulation allows consumers
to determine the one to hold product liability. Consumers can request any product
providers to take the liability to compensate for them. The providers can later directly
recourse any other manufacturers in which they took their own part of responsibility.70
1.3.4 Seeking Damages
Under the goals of Tort Law, as the victim of a tort, the plaintiff may have sought
two major types of damages:
1.3.4.1 Compensatory Damages
Compensatory damages are the common type for seeking damages that the plaintiff
often use. The consumers who suffer from damage can ask for such expenses as medical
costs easily. Likewise, if the plaintiff can not work because of the injury, the court can
calculate the amount that the plaintiff would have earned while being incapacitated. It

will be more complicated if plaintiffs make claims involving pain and suffering or
emotional distress, which may include both present and future physical and mental
impairment. In deciding whether or not to award compensatory damages for such claims,
it’s the job of judges and juries to use common sense, good judgment, and general
experience.71
1.3.4.2 Punitive Damages
In addition to compensatory damages, punitive damages are intended to
prevent similar conducts of manufacturers that cause damage to consumers in the
future. A manufacturer might find it cheaper to market an unsafe product and
compensate injured consumers than to develop a safer product. Therefore, it is
regarded that punitive damages are used to discouraging manufacturers from
making unsafe products. Punitive damages are applied depend the consideration of
the court about “the degree of reprehensibility of the defendant’s conduct”. The
69

Henry R. Cheesman (2006), Contemporary Business and Online Commerce Law: Legal, Internet, Ethical, and

Global Environments, 5th ed., Upper Saddle River, NJ: Pearson Education, p370.
70
71

Nguyen Thi Tuong Vi (2009), above n 16, p.19.
Compensatory Damages, Law Library: American Law and Legal Information (2008) Read more:

http://law.jrank.org/pages/5947/Damages-Compensatory-Damages.html, 05/08/2013 20.35.

20



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