Product Liability

The manufacturer or designer of a product can be held liable for loss or damage caused as a result of the use of his product, either on the basis of contract or on the basis of delict (or unlawful conduct).

Liability on the basis of contract

Where there is a contractual relationship between the designer or manufacturer of the product and someone suffered loss or damage, eg where the designer or manufacturer sold or supplied the product to that person, liability can arise. The liability is based either on a breach of warranty (express or tacit) that the product will be suitable for its purpose, or on the warranty (tacit) of a seller against latent or hidden defects in the product or on the basis of some term in the contract.

Liability may be excluded by way of a suitable indemnity or other clause. Such a clause will be enforceable provided that it has been brought to the notice of the other contracting party, and provided that it is reasonable and not against public policy. If the product involves inherent dangers or risks, it is essential that suitable warnings be given.

Liability on the basis of delict

Liability can arise also in circumstances where there is no contractual relationship between the designer of a product and the person who suffered the loss or damage. The liability in this case is based on the principle that someone will be liable who, through his intentional or negligent conduct in supplying a defective product, causes loss or damage to someone. Negligent conduct occurs where a designer provides a product that will be defective or dangerous even with normal use, or where the designer neglects to warn a purchaser against inherent dangers, or neglects to instruct a purchaser on proper installation and/or use and maintenance to avoid potential dangers.

Where the product is inherently dangerous or can be used in a dangerous manner, a complainant will have to show that the loss or damage arose as a result of an inherent defect in the product, or as a result of the normal installation or use of the product, and that the designer acted negligently, eg in failing to ensure that no defects existed, or in failing to warn against potential risks or dangers.

It is essential that suitable warnings be provided to users of the product where it involves inherent risks, or requires precise installation or use.

Where the user of a product adapts or modifies the product, and as a result suffers loss or damage, the original designer or manufacturer is unlikely to be held liable.

It should be noted that certain safety requirements or minimum standards may have been prescribed in regard to certain products (eg electrical appliances), by law often through standards authorities such as the DIN and TÜV in Germany, SAE in USA, BSS in UK and the  SABS in our country and other regulatory bodies. Our SABS can give you assistance not only in regard to standards compliance here, but also in contacting foreign standards authorities. This is especially important in the case of items such as workshop machinery which in South Africa must comply with the Machinery and Occupational Safety Act, 1983 (the MOS Act), and the National Occupational Safety Act (NOSA) requirements. It is recommended that the designer of a product that is likely to involve safety aspects make the necessary enquiries in this regard. (See address list, page 20.)