Product Liability under Consumer Protection Law-II
Product liability law arises from the common law theory of caveat venditor, which means “let the seller beware”. This theory places the onus on the seller for any injury suffered by the buyer due to the product or service sold by him. Therefore, the manufacturer and other involved parties are liable to compensate the buyer having suffered injury due to the defective or harmful product sold.
Taking forward the discussion on Product Recall and Product Liability in Part- I, let’s understand the relevance and its impact under the Consumer Protection Act, 2019 (hereinafter “2019 Act”).
The 2019 Act also sets out liability for different parties involved in selling a product:
- Manufacturer Liability
Section 84 of the Act provides that a product manufacturer shall be liable in a product liability action if the product meets any of the following criteria:
- Contains a manufacturing defect;
- Is defective in design;
- Has deviation from manufacturing specifications;
- Does not conform to the express warranty;
- Does not contain appropriate instructions for proper usage to prevent any harm, or any warning against improper or incorrect usage.
Further, a product manufacturer shall be held liable for defective products even if it is proved that they were not negligent or fraudulent in making the express warranty of a product.
2.Product Service Provider
A product service provider shall be liable in product liability action in any of the following circumstances:
- Providing faulty or imperfect or deficient or inadequate quality, nature or manner of performance of service, which is required to be provided by him as per any law in force, or as per the contract;
- Act or omission or commission or negligence or conscious withholding of any information which caused harm;
- Failure to issue adequate instructions or warning to prevent harm;
- Non-conformity of the service with the express warranty or terms and conditions of the contract
A product seller, not being a product manufacturer, shall be liable in a product liability action if the seller:
- Exercises substantial control over the design, testing, manufacturing, packaging or labelling of the product that caused harm;
- Altered or modified the product, where such alteration and modification is the substantial factor for harm caused;
- Has made an express warranty of the product independent of the manufacturer’s express warranty and the product fails to conform to the seller’s express warranty, causing harm;
- Has sold a product causing harm, where the identity of the manufacturer is not known, or such manufacturer cannot be served notice or process or warrant, or is not subject to the law in force in India or the order passed cannot be enforced against him;
- Failed to exercise reasonable care in assembling, inspecting or maintaining such product or failed to pass on the manufacturer warnings or instructions concerning dangers involved or proper usage of the product while selling such product which proximately resulted in the harm caused.
EXCEPTIONS TO PRODUCT LIABILITY
A product liability action cannot be instituted against the product seller and manufacturer in the following circumstances:
- If the product was misused, altered or modified at the time of harm, the seller cannot be held liable.
- The manufacturer shall not be liable if:
- The product was purchased by employer for use at workplace and the manufacturer had provided warning and instructions to the employer;
- The product was sold to be used as a component in another product along with warnings and instructions, but harm was caused due to end product which contains such component;
- The product is legally meant to be used or dispensed only under supervision of expert(s);
- The complainant was under influence of alcohol or drug not prescribed by medical practitioner at the time of using such product;
- Such instructions or warnings about a danger are obvious or commonly known to the user, or which the user ought to have known taking into account the characteristics of the product.
CONSEQUENCES OF PRODUCT LIABILITY
The 2019 Act empowers the District Commissioner under Section 39 to investigate the product and manufacturer/seller regarding defective products which harm the consumers and determine whether such liability actually arises or not.
Upon satisfaction of the same, the central authority may order for:
- Recall of goods or withdrawal of such products;
- Replace goods with new goods of similar description free from any defects;
- Return the price or charges paid by the complainant along with interest for such defective product;
- Removal of defect in the goods or deficiency in services;
- To pay amount as awarded by the District Commission as compensation to the consumer for loss or injury suffered by the consumer due to the manufacturer’s negligence.
The District Commissioner also has powers to grant punitive damages according to the facts and circumstances.
6. To pay compensation in product liability action;
7. To discontinue offering the hazardous goods for sale and withdraw them from being offered for sale; and
8.To cease manufacture of such goods and desist from offering services which are hazardous in nature.
Therefore, the new 2019 Act has cautiously affixed responsibility to the manufacturers and sellers for product liability.
There are other laws of the land that sets out liability for different parties involved in selling a product which will be dealt in Part- III of the Product Recall and Product Liability.
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