About Negligence and Strict Liability
While the law regarding the scope of the duty owed has changed throughout the years, the rule that finally emerged is that a party is liable for negligence in the manufacture or sale of any product that may reasonably be expected to to inflict substantial harm. Thus, the adoption of the “zone of danger” rule did away with any vestige of privity (i.e., the original buyer of the defective product) needed between the injured person and the manufacturer or seller of the dangerous product. Eligible defendants include manufactures, but also sellers or retailers with knowledge.
Negligence and strict liability are remedies that provide only tort damages, i.e., losses that are the result of the wrongdoer’s negligence or the defective part, respectively. These damages include:
- Personal injury
- Wrongful death
- Diminished value of property
- Cost of repair or restoration
- Value of fixtures
- Personal property
- Loss of use in certain circumstances
Damages to the defective or dangerous product itself must be recovered under a breach of contract theory, the reasoning being that contracts provide for only “the benefit of the bargain”, i.e., the cost of the product or part itself. Put differently, a contract based claim only allows for the recovery of the 89 dollar part and not the 1.2 million dollar yacht into which the part was installed. This prohibition against the recovery of tort damages is generally known as the “economic loss rule.” Breach of warranty mixes the theories and allows for the recovery of both contract and tort damages depending upon the circumstances. If the breach of the sales contract causes physical harm or damage to property other than the product itself, tort damages are available. If the breach of warranty results in damage to the product itself, contract damages are available.