Product Liability under Export Import Business


Product Liability


Product Liability under Export Import BusinessProduct liability can be defined as the responsibility borne by the manufacturers, distributors and retailers for any consequential injuries/damages from the products they make or sell. If the user of the product suffers, he has the right to sue.

(A) In case of Negligence on the Part of the Manufacturer: Negligence in manufacturing makes him liable. The user has to establish negligence on the part of manufacturer in designing or making the product.

(B) Principle of Strict Liability: This is an important principle established by the U.S. Supreme Court in 1953. Even if there is no negligence on the part of the manufacturer, still, the manufacturer is responsible to the aggrieved user if the user sustains injury from a defective product.

(C) Express/Implied Warranties: In some contracts of sale, there are express or implied warranties in respect of merchantability of the product which make the manufacturer liable. Exporter must be conversant with the laws and regulations of the country to which the product is exported to ensure their compliance. In case any suit is filed, even though the exporter may plead that the foreign country does not have the jurisdiction over him and may succeed even. Still, he has to incur legal charges. Any penalty imposed on the distributor for the fault of exporter spoils the business relations and, finally, ruins the prospects of business. It is desirable for the exporter to take product liability insurance.


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