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Law525 Law of the Marketplace chapter 3

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Law and Business
LAW 525
Nick Iannazzo

Chapter 3 – Product Liability Private Law Remedies: 1. Contract Law • Only buyer can sue seller (if buyer gives product to someone else, they cannot sue) 2. Tort of Negligence Contract Law: - Sue for damages ($) for breach of contract terms if the quality, fitness or performance of the product does not comply with express or implied terms - Implied Terms: 1. From trade practices 2. From Sales of GoodsAct - Privity of Contract Negligence: - in the event there is no privity nor implied statutory warranties then the plaintiff must try to prove negligence - Negligence – failure to exercise reasonable care & results in a reasonable foreseeable injury to the plaintiff Negligence in Product Liability Cases: 1. Negl. Manufacturing of a Product 2. Negl. Design of a product 3. Failure to Warn Foreseeable Users of Dangers 4. Negl. Misrepresentation Causes of Action: 1. Breach of Contract 2. Tort of Negligence 3. Statutory Cause of Action Resch V. Canadian Tire Corp. - Step-father purchased bicycle - Bicycle defective - Step-father’s son injured - First go after under breach of contract and SGA - Sales of Good Act – Fitness for Purpose S. 15(1) – a “buyer” gets an implied warranty of fitness for purpose - Is son a “buyer” under s.15 (1)? - S. 1 “buyer” the person who buys or agrees to buy goods - S. 2(1) – a contract of sale of goods is a contract whereby the S transfers or agrees to transfer the property in the goods to the B for a money consideration, called the price, and there may be a contract of sale between one part owner and another - Court Decided NO. The buyer was the step-father because 1. No evidence that son paid money 2. Buyer is person who enters into the contract to buy the goods - If son is not the “buyer” under the contract to purchase the bicycle there is no privity of contract - Court refused to acknowledge an exception to the privity of contract doctrine - Sales of GoodsAct (/contract) Claim FAILED - Negligence Action SUCCEEDED Carelessness was that the bike was given back to the boy instead of held. All three were liable SGA S. 15(1) Fitness for Purpose: - “where the B, expressly or by implication, makes known to the S the particular purpose for which the goods are required so as to show that the B relies on the S’s skill or judgement and the goods are of a description that it is in the course of the S’s business to supply (whether he is the manufacturer or not), there is an implied....(in book) RegulatoryApproach to Addressing Business-Consumer Transactions: 1. Private Law Approach: a) Contract law & Tort Law b) Burden on Plaintiff to prove case on balance of probabilities (i.e. civil standard) c) Damages; Injunction 2. Regulatory Law Approach a) Statutes (e.g. Consumer ProtectionAct; Canadian Consumer Product SafetyAct) b) Government has an active role c) 3 types of Offences d) 2 Tracks – Criminal Track or Civil Track e) Inspectors & Investigators f)Remedies may include jail (often fines) 3 Types of Regulatory Offences: 1. Full Mens Rea Offence (“True” Criminal offence) 2. Strict Liability Offence 3. Absolute Liability Offence Full Mens Rea Offence: 1. Government must prove: a. Actus reus (the act); and b. Mens reus (intent or recklessness - Look for words like willfully, knowingly, with intent, intentionally...that suggests mens reus required 2. Burden of Proof upon: Government 3. Standard of Proof: Beyond a Reasonable Doubt Strict Liability Offence (“SLO”) 1. Government must prove: Actus Reus (the act) 2. Burden of Proof upon: Government 3. Standard of Proof: Beyond Reasonable Doubt 4. Defences available to accused Due Dilligence Defence (reasonable care Defence) Accused must prove defence on a balance of probabilities Note: Most regulatory offences are SLO Absolute Liablity Offence (“ALO”): 1. Government must prove: Actus Reus (the act) 2. Burden of Proof upon: Government 3. Standard of Proof: Beyond Reasonable Doubt 4. Defences available to accused None Note: ALO is VERY RARE. If an accused can go to jail the courts have held that it cannot be an ALO (probably against the charter) Civil vs. Criminal Track: 1. Civil Track offences a. Less common b. Prosecution must prove offence on a ``balance of probabilities`` c. No Jail d. Administrative monetary penalties (``AMP``) 2. Criminal Track Offences a. More Common b. Used for intentional ``true Crime`` Offence, Strict liability offence, &Absolute Liability Offence c. Prosecution must prove offence on a ``beyond a reasonable doubt`` Regulatory Statute – Product Safety: - Hazardous Products Act (federal) - Canadian Consumer Products SafetyAct (Federal) – largely replaces hazardous products act recently - What constitutional Power authorizes the above statutes? 1. Section 91: subsection: criminal law Hazardous Products Act (HPA): - Federal law - “Criminal law” jurisdiction (R. V. Cosman’s furniture ltd. – 1977, Man. C.A.) - HPAonly applies to some consumer products - No recall powers, limited powers to investigate Canada Consumer Product
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