1. BUSINESS Chapter 6 The Law of Products Liability 产品责任法

2. Definition of Products Liability Theories of Recovery Defenses Scope of Compensation Applicable Law Overview The Law of Products Liability

3. Robert Ernst product manager of Wal-Mart Case Study Carol Ernst v. MERCK & Co. Inc rheumatic arthritis （ 风湿性关节炎 ） 1. May, 2001 3. August, 19, 2005 2.1998 - Sept., 2004 patent medicine （专利药品）

4. Case Study 1. Is Merck liable in this case? 2. What’s the characteristic of American law of products liability? Carol Ernst v. MERCK & Co. Inc $ 450,000 $ 24,000,000 compensation for mental injury $ 229,000,000 punitive damages

5. The Law of Products Liability 1. What is Products Liability ？ Products liability is the legal liability of the manufacturer or seller of a product which, because of a defect, causes injury to the purchaser, user, or bystander. Liability extends to anyone in the business of selling the goods or in the chain of distribution.

6. The Law of Products Liability 1.Products Liability (1)What is product? (2)What is defect? Products processed and manufactured for the purpose of marketing. □ Manufacturing defect □ Design defect □ Failure to warn

7. The Law of Products Liability (3) Who May Be Claimants? (4) Who May Be liable?

8. The Law of Products Liability □ Manufactures □ Wholesalers □ Retailer □ Makers of components

9. The Law of Products Liability Article 41 Producers shall be responsible for compensating for damages done to the person or property except the defective products themselves (hereinafter referred to as "property of others") due to the defects of products. Product Quality Law of the People's Republic of China

10. The Law of Products Liability Article 42 Sellers shall be responsible … resulting from the fault on the part of sellers. Sellers shall be responsible if they cannot identify the producers or suppliers of the defective products. Article 43 If damages are done to the person or properties of others due to the defects of products, the victims may claim for compensation either from the producers or sellers. Product Quality Law of the People's Republic of China

11. II. Theories of Recovery 1. breach of contract 2. Negligence 3. Strict Liability 4. Market shares liability The Law of Products Liability Escala v. Coca Cola Bottling Company 1944 Greenman v. Yuba Power Products. Inc. 1957 Sindell v. Abbott Labs. 1980 Winterbottom v. Wright 1842 MacPherson v. Buick Motor Co. 1916

12. The Law of Products Liability Strict Liability in tort 1. impose liability on an actor regardless of fault. 2. removes many of the difficulties for the plaintiff associated with other theories of product liability. 3.The plaintiff must prove: the defect existed at the time it left the defendant and did not substantially change along the way He, or his property, was harmed by the product the injury was caused by a defect in the product

13. III. Defenses(American Law of Products Liability) 1. Unforeseeability 2. Product Misuse and Alteration 3. Inherent Product Danger 4. Assumption of the Risks The Law of Products Liability

14. III. Defenses (1) The products have not been put into circulation; (2) The defects are non-existent when the products are put into circulation; (3) The defects cannot be found at the time of circulation due to scientific and technological reasons. The Law of Products Liability

15. 1. causes losses in property 2. causes other major losses 3. Punitive damages zzzzzzzzz IV. Scope of compensation The Law of Products Liability Damages intended to reform or deter the defendant and others from engaging in conduct similar to that which formed the basis of the lawsuit.

16. A STORY OF COFFEE:PUNITIVE DAMAGES Stella Liebeck McDonalds The Law of Products Liability

17. A STORY OF COFFEE 得来速餐厅（ the drive through window ） The Law of Products Liability

18. A STORY OF COFFEE The Law of Products Liability

19. 19 $200,000*80% =$160,000 $2,700,000 The Law of Products Liability

20. A STORY OF COFFEE:PUNITIVE DAMAGES The Law of Products Liability

21. A STORY OF COFFEE:PUNITIVE DAMAGES The Law of Products Liability

22. medical expenses nursing expenses transport expenses lost income Medical treatmentresulted in death zzzzzzzzz resulted in disability expenses for self- supporting equipment compensation for disabled funeral expenses compensation for death IV. Scope of compensation The Law of Products Liability

23. V. Law Applicable The Law of Products Liability The laws at the place of tort shall apply to liabilities for tort, but if the parties have a mutual habitual residence, the laws at the mutual habitual residence shall apply.

24. The Law of Products Liability ■ Statute of Limitation 2 years, starting from the date when the parties concerned is notified or should have known the matter.

25. Definition of Products Liability Theories of Recovery Defenses Scope of Compensation Statute of Limitation Summary The Law of Products Liability