Product Liability

Product Liability Law

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Product Liability Law

Product liability law deals with any product in a defective condition, causing physical damage to the individual, group or the property. Though any particular law in India cannot define product liability, the Indian judiciary system has a substantial legal framework to define liability. The product liability law shall ensure that manufacturers produce products that are free from defect and protect the safety of the public.

Types of Defects

There are three types of defects which can cause injury and give rise to liability.

  • Manufacturing Defect: Defect occurs during the manufacturing or assembly process of the product.
  • Design Defect: A design defect is present when the product has been produced structurally unstable
  • Marketing Defect: This is a type of flaw in the way a product is marketed like insufficient instructions and improper labelling. However, marketing defects are mostly termed as unintentional.

Conditions for Recovery

  • The product has caused an unreasonably dangerous effect
  • Injury caused while using the methods as described by the procedure
  • The user has made no changes from the time of being sold

Liability for Marketing and Manufacturing a Defective Product

The product liability law in India governs the liability of manufacturers, distributors, wholesalers and vendors for injury caused to an individual, group or property by defective or dangerous products. The objective of the law is to help protect the consumers from any defective products while holding the manufacturers, wholesalers, distributors and retailers responsible for producing defective products.

Laws

Civil Product liability in India is governed by

  • The Consumer Protection Act, 1986
  • The Sales of Goods Act, 1930
  • The law of torts
  • Special statues pertaining to certain goods.

Along with civil liability, the law also imposes criminal liability in case of non-compliance with provisions of any of the below-mentioned acts. These acts pertain to the sale of certain goods like drugs, food, cosmetics, etc. These acts include:

  • The Food Safety and Standards Act, 2006
  • The Foods Adulteration Act, 1954
  • The Indian Penal Code, 1860
  • The Drugs and Cosmetics Act, 1940
  • The Bureau of Indian Standards Act,1986
  • The Agricultural Produce (Grading and Marking) Act, 1937

Types of Damages

There are four types of damages covered in the product liability law.

  • Compensatory damages to cover lost wages, medical bills and damage to property caused by a product.
  • Loss of consortium
  • Suffering and pain endured due to an injury
  • The defendant is eligible for punitive damages if the conduct of the defendant was egregious.

Provisions under the Consumer Protection Act, 1986

As per the Act, any producer, distributor or importer shall be held responsible if the goods have caused any harm wholly or in part as a consequence of supplying unsafe goods, defects in goods, product failure or inadequate instructions provided to the consumer regarding the hazard associated with the use of goods. If more than one individual is liable, the liability will be joint and several.

Exceptions for Manufacturer

  • The defect, characteristic, hazard or failure did not exist at the time when the goods were supplied to the other person who is alleged to be liable.
  • Complaint is launched after the expiry of two years from the date of cause of action
  • The harm was attributable to compliance by the person blamed with instructions provided by the individual who supplied goods to that person,
  • It is not reasonable to expect the distributor or a retailer to have discovered the unsafe characteristic, hazard or defect in the product, having regard to his role in marketing the goods.

Who can file a suit?

The Consumer Protection Act provides that the consumer or any organisation registered under The Companies Act, 1956 can file a complaint. Besides them, any individual who is a beneficiary of the goods or a legal representative or legal heir of the consumer can also file a suit.

Eligibility to File a Suit

If the value of the product is less than Rs.20 lakh, the complaint should be filed at the District Forum.

If the value of goods involved is more than Rs.1 crore, the complaint is to be filed with the National Commission in New Delhi.

In case of a complaint about goods is valued less than Rs.20 lakh, a complaint at the District Forum at the same state where the action took place.

For a complaint with regard to an amount higher than Rs.20 lakh and below Rs.1 crore, the complaint can be registered with the State Commission in the State where the service provider/ trader or manufacturer works.

Documents to be Attached for Filing a Suit

  • Relevant Facts and Bills
  • Name and address of the complainant
  • Name and address of the opposite party
  • A detailed description of the goods and the cause of complaint.
  • A copy of the bill of goods with the warranty documents
  • A copy of the complaint and notice made to the trader to rectify the product
  • The prescribed fee has to be paid with the complaint before the Forum or the Commission
  • An affidavit with the complaint

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