INTRODUCTION
Product Liability’s provision was first defined under the Consumer Protection Act, of 2019. According to this act, product liability is the responsibility or the duty of the Manufacturer or the Product Service Provider, wherein they have to compensate for any loss incurred to the consumer due to the fault of the manufacturer or the seller[1]. Product liability is not well interpreted in any law or statute, however, according to the court’s decision and the jurisprudence over the period, the general meaning is the liability of any party involved in the product manufacturing or the product service providing, due to the defect in the product or its service.[2] Before the consumer protection act came into force, product liability was governed according to the Consumer Protection Act, of 1986, the Sales of Goods Act, of 1930, the Indian Contract Act, of 1872, Tort Law, and the principles in the case Donoghue v Stevenson[3]. In addition to the preceding legislation, the CPA, 2019 has delved deeply into the origins of the notion of Product Liability by adding a distinct chapter VI titled “Product Liability” with an aim and effort to provide consumers with stronger and better protection, the 2019 Act made major revisions to the Former Act and included new provisions. The introduction of this act signifies the end of the Buyer Beware doctrine and the introduction of the new doctrine of the Seller Beware regulating Consumer Protection Act.
PRODUCT LIABILITY UNDER CONSUMER PROTECTION ACT, 2019
The Consumer Protection Act created a legal framework for Product Liability claims and made a separate entire segment (Chapter VI)[4]. In this chapter, the legal boundaries for determining the harm caused by defective products were established. These include actions brought against the manufacturer, seller, or service provider of a product due to the harm caused to the consumers. Harm can either be to property or to the person whether mentally or physically. However, it excludes any injury caused to the property due to the breach of conditions of the warranty as well as any economical or commercial loss. The Act defines the word ‘defect’ as any mistake, fault, or inadequacy in the quantity, quality, standard, etc. that is important to be maintained under any contract or law, it can be implied or expressed or in any other way as claimed by the seller.[5]
PRIVITY OF CONTRACT AND PRODUCT LIABILITY
Privity of contract means the third party can be sued even if that person has not contracted in the contract. Privity of contract is no anymore, the criteria to sue for product liability- anyone who could reasonably expect the defendant to incur injury may sue. In the case Donoghue v. Stevenson[6], a consumer was given a drink in which there was a dead snail that caused health issues for the consumer. In this case, the consumer can hold the manufacturers of the product liable although the contract only existed between the consumer and the seller of that product. In another case Henningson v. Bloomfield Motors Inc[7], where the car malfunctioned 10 days after its purchase causing injury to the plaintiff’s wife. Here there is a breach or violation of the implied warranty to safety. The fact that it was the plaintiff’s wife who was injured and not the plaintiff himself is no defence, as product liability is applied to all reasonably foreseeable users. Liability of Product Manufacturer and Service Provider under the Consumer Protection Act, 2019.
LIABILITY OF PRODUCT MANUFACTURER
According to section 2 (36), of the 2019 Act[8], the definition of the ‘Product Manufacturer is defined’. It means someone who a) manufactures the product or its parts; b) collects the parts that are produced by others; c) labels the product as his own on the product made by some other person; d) manufacturers and sells, installs, markets, labels, or repairs; e) engages in designing, fabricating or re-manufacturing of the product.[9] Section 84[10] of the Act states the instances in which a product manufacturer is liable for compensating the consumers under product liability action caused due to supplying the defective product.
These instances are as follows:
(a) The manufactured product contains a fault
(b) The product lacks the production requirements;
(c) If a product breaches an explicit warranty, a manufacturer can be sued for payment.
(d) Similarly, a manufacturer may be held liable for product responsibility, if the product does not have necessary instruction on the correct usage of the product or warning on the product.[11]
LIABILITY OF PRODUCT SERVICE PROVIDER
As per the 2019 act, Product Service Provider means a person who gives services to the consumers concerning the product. The definition is added in the 2019 act including services like maintenance and repair which are intrinsically linked to the product and have a direct impact on its functioning. Section 85[12] of the act defines to what extent a product service provider can be liable in a product liability case for damages incurred by a defective product serviced by such service providers. For instance, if the service it rendered was flawed in some way or if the product’s service provider does not give sufficient warnings or instructions, the service provider will be held liable.
LIABILITY OF PRODUCT SELLER
Product seller is defined under the 2019 act as any person who sells, imports, exports, packages, markets, labels, maintains, markets, or is involved in using the product for commercial purposes and it includes (a) a manufacturer who is also a seller; (b) a service provider. Section 86[13] of the Act, lists the instances a product seller (who is not the product manufacturer) may be held liable. The following are:
(a) if the seller had substantial authority over the product’s development, testing, production, packaging, or labelling and it went on to cause harm
(b) if the seller makes any replacements or modifications to the goods and such changes contribute significantly to the damage.
(c) if the harm was caused by the product’s failure to comply with an express warranty granted by the seller of the goods, even if no such guarantee was provided by the seller.
DEFENCES AVAILABLE TO PRODUCT MANUFACTURERS AND SELLERS
If a claim is brought against a manufacturer or the seller because the manufacturer or the seller did not provide sufficient warnings, then a such claim will be considered invalid if:
1. The employer had purchased the goods for use in the workplace and received proper warnings, which the employer had known about but had not communicated to the employee who had brought the complaint.
2. The product was meant to be used for a different purpose and the combination of the two caused harm in spite of the warning.
3. The customer has consumed an intoxicating substance or drug which a doctor does not prescribe. Harm was caused because of alcohol or the influence of such drugs.
4. The manufacturer is also not obligated to include a warning if the characteristic or danger is evident to a reasonable customer.[14]
.The defendant’s need to make compensation would be waived if the defendant could show any of the aforementioned circumstances.
CONCLUSION
With the introduction of the consumer protection act, of 2019, there is been a shift from ‘Caveat Emptor’ to ‘Caveat Vendor’. Sections 82–87 of the CPA, 2019 focus on product liability. As a result of the Consumer Protection Act of 2019, the balance of power has shifted dramatically from the customer to the seller. Sections 82–87 of the CPA, 2019 are focused on product liability. Every consumer who is harmed by a product or who is unable to use the product due to a fault has the right to seek compensation due to the harm caused by the product’s seller, manufacturer, or service provider. They have no right to claim that the buyer should have been aware of the flaw in the product. Amendments to the Consumer Protection Act that expand responsibility for damaged goods do not stand alone. There are also amendments made in the Motor Vehicle Act, of 1988[15], where the statutory framework is introduced for recalling defective motor vehicles. Vehicles that are produced, imported, or sold by a dealer in violation of the Motor Vehicle Act’s standards for such things as construction, maintenance, sale, and alteration are subject to fines or even jail time, depending on the severity of the infraction. With the recent pandemic of Corona and the proliferation of online commerce, such safeguards must be strengthened and should be made more reliable.
Author(s) Name: Khushi Agarwal (NMIMS)
References:
[1] The Consumer Protection Act, 2019, s 84
[2] The Consumer Protection Act, 2019, s 86
[3] Donoghue v Stevenson [1932] UKHL 100
[4] The Consumer Protection Act, 2019, ch VI
[5] The Consumer Protection Act, s 2(f)
[6] Donoghue v Stevenson [1932] UKHL 100
[7] Henningsen v. Bloomfield Motors, Inc. – 161 A.2d 69 (N.J. 1960)
[8] Consumer Protection Act, 2019, s 2 (36)
[9] Consumer Protection Act, 2019, s 2 (36)
[10] Consumer Protection Act, 2019, s 84
[11] Consumer Protection Act, 2019, s. 84
[12] Consumer Protection Act, 2019, s. 85
[13] Consumer Protection Act, 2019, s. 86
[14] Consumer Protection Act, 2019, s.87
[15] The Motor Vehicles Act, 1988
