Chapter Seven | Negligence, Causation and Res Ipsa Loquitur

“A manufacturer’s duty to produce a safe product, with appropriate warnings and instructions where necessary, rests initially on the responsibility each of us bears to exercise care to avoid unreasonable risks of harm to others.” (Hall v. E.I. DuPont)
“Negligence is the omission or failure to do something which a reasonable man would do or doing something which a reasonable and prudent man would not do under the same or similar circumstances.” (see Restatement, 2d Torts)
A classic case from the common law provides an insight on the issue of the reasonable man.

Case Study: Cordas V. Peerless Transportation Co.

Procedural Posture

Plaintiffs brought an action for damages in the City Court of New York, (New York) against defendant cab company in an action alleging negligence.

Overview

A chauffeur driving a cab owned by defendant cab company abandoned his vehicle while it was in motion after he was threatened by his passenger, a thief with a pistol who was fleeing from the scene of a crime. The passenger also abandoned the vehicle and then, the unattended cab injured plaintiffs, a mother and her two children. Plaintiffs filed a negligence action against defendant cab company. The court found in favor of defendant. It said that defendant was suddenly faced with patent danger, not of its own making, and the court presumed defendant abandoned the vehicle involuntarily. It said that the law does not hold one in an emergency to the exercise of that mature judgment required of him under circumstances where he has an opportunity for deliberate action. It found defendant’s actions reasonable under the circumstances.

Outcome

The court found for defendant cab company in an action for negligence where it said that defendant could not be found negligent when it was suddenly faced with patent danger, not of its own making, and the court presumed defendant’s response was done involuntarily.

Negligence

In general, negligence involves proof of unreasonable conduct, which is the cause in fact, and proximate or legal cause of injury to the plaintiff. The plaintiff must both plead and prove that specific acts or omissions of the defendant were negligent. The traditional elements of proving negligence are a proof of a duty of due care; breach of that duty; causation; and damages.

Negligence can arise in numerous ways and standard principles of negligence now apply fully and clearly to individuals who design, manufacture, and sell products. These areas include inspection, processing, packaging, warning, designing, or marketing of products, or of the service portion of a transaction involving a product.

At the end of trial, judges are required to charge a jury relating to the law on negligence. For example, the jury instructions found in the case of Garnes v. Gulf & Western Manufacturing Co. provide:

“You are instructed that it is the law that the manufacturer of a machine has a nondelagable duty to make a machine that includes necessary safety devices. You are instructed that it is the law that the manufacturer has a duty to produce a safe product with warnings and instructions where necessary.”

Courts will employ the standard of the reasonable man or the reasonable person in the position of the manufacturer, or designer, or marketer. Wilson v. Piper Aircraft reminds us that in product cases, expert testimony or evidence will be required in most cases—and absolutely in any case involving medical malpractice, or medical negligence—where an expert would be expected to testify what a reasonable medical practitioner in the same or similar community under the same or similar circumstances would or would not do. The court concluded:

“We conclude that the plaintiff had the burden to prove by expert medical evidence what a reasonable medical practitioner of the same school and same or similar community under the same or similar circumstances would have disclosed to his patient about the risks incident to a proposed diagnosis or treatment, that the physician departed from that standard, causation, and damages.”

The standard for a manufacturer in a design case is straightforward: Did the manufacturer exercise all reasonable skill and knowledge concerning the design of the product as would
other designers under the same or similar circumstances? A manufacturer must keep abreast of recent scientific and technological developments, and may be required to conduct tests or research to learn about any inherent dangers in their products. Taylor v. Wyeth Labs indicates that a manufacturer will be held accountable under a standard of professional skill and knowledge:

“A manufacturer is held to such reasonable skill, knowledge, and diligence as that of the experts in the filed to design and produce a product that is reasonably safe for its intended and foreseeable use. Ignorance of risks which were scientifically knowable or known at the time of sale or manufacture, or design; and failure to act is no defense and may, in itself, constitute negligence as an omission.”

The Restatement, Section 395, and Comment F embody this principle:

“A manufacturer who fails to exercise reasonable care in the manufacture of a chattel which, unless carefully made, he should recognize as involving an unreasonable risk of causing physical harm to those who use it for a purpose for which the manufacturer should expect it to be used and those whom he should expect to be endangered by its probable use, is subject to liability for physical harm caused to them by its lawful use in a manner and for a purpose for which it is supplied.”

“The particulars are (1) the adoption of a formula or plan which, if properly followed, will produce an article safe for the use for which it is sold, (2) the selection of material and parts to be incorporated in the finished article, (3) the fabrication of the article by every member of the operative staff no matter how high or low his position, (4) the making of such inspections and tests during the course of manufacturer and after the article is completed as the manufacturer should recognize as reasonably necessary to secure the production of a safe article, and (5) the packing of the article so as to be safe for those who must be expected to unpack it.”


Formula Or Plan = Design Fabrication = Manufacture

What about the negligence of a manufacturer in cases involving a duty to warn? Generally, as we have seen, there is no duty to warn in a case of a patent or obvious danger. However, a case of a latent defect, a duty to warn arises. This dichotomy goes back to the consumer expectations test that we have previously discussed: If the defect or danger is patent or obvious, a manufacturer will not be required to issue a warning because the consumer has no expectation of receiving a warning and the consumer would not really receive anything of value or importance in the warning that he does not already know.

The issue of “to whom is the duty owed” was discussed in the famous Palsgraf case. Judge (later Justice) Cardozo adopted a restrictive view of duty in his foreseeability formation. In contrast, Judge Andrews, who served on the New York State Court of Appeals with Judge Cardozo, viewed the matter as one of causation and not duty and adopted what has been termed as the direct connection test, with “practical limitations in both time and space.” According to Judge Cardozo, this issue is one for the court to decide as a matter of law; according to Judge Andrews, the issue is always one for the jury!

 

Palsgraf V. Long Island R.R. Co.

248 N.Y. 339, 162 N.E. 99 (1928)

CARDOZO, C. J. . . . Plaintiff was standing on a platform of defendant’s railroad after buying a ticket to go to Rockaway Beach. A train stopped at the station, bound for another place. Two men ran forward to catch it. One of the men reached the platform of the car without mishap, though the train was already moving. The other man, carrying a package, jumped aboard the car, but seemed unsteady as if about to fall. A guard on the car, who had held the door open, reached forward help him in, and another guard on the platform pushed him from behind. In this act, the package was dislodged, and fell upon the rails. It was a package of small size, about fifteen inches long, and was covered by a newspaper. In fact it contained fireworks, but there was nothing in its appearance to give notice of its contents. The fireworks when they fell exploded. The shock of the explosion threw down some scales at the other end of the platform many feet away. The scales struck the plaintiff, causing injuries for which she sues.

The conduct of the defendant’s guard, if a wrong in its relation to the holder of the package, was not a wrong in its relation to the plaintiff, standing far away. Relatively to her it was not negligence at all. Nothing in the situation gave notice that the falling package had in it the potency of peril to persons thus removed. Negligence is not actionable unless it involves the invasion of a legally protected interest, the violation of a right. Proof of negligence in the air, so to speak, will not do.’ * * * Negligence is the absence of care, according to the circumstances.’ * * * The plaintiff, as she stood upon the platform of the station, might claim to be protected against intentional invasion of her bodily security. Such invasion is not charged. She might claim to be protected against unintentional invasion by conduct involving in the thought of reasonable men an unreasonable hazard that such invasion would ensue. These, from the point of view of the law, were the bounds of her immunity, with perhaps some rare exceptions, survivals for the most part of ancient forms of liability, where conduct is held to be at the peril of the actor. * * * If no hazard was apparent to the eye of ordinary vigilance, an act innocent and harmless, at least to outward seeming, with reference to her, did not take to itself the quality of a tort because it happened to be a wrong, though apparently not one involving the risk of bodily insecurity, with reference to some one else.

This does not mean, of course, that one who launches a destructive force is always relieved of liability, if the force, though known to be destructive, pursues an unexpected path. It was not necessary that the defendant should have had notice of the particular method in which an accident would occur, if the possibility of an accident was clear to the ordinarily prudent eye.’ * * * Some acts, such as shooting are so imminently dangerous to any one who may come within reach of the missile however unexpectedly, as to impose a duty of prevision not far from that of an insurer. * * * Even to-day, and much oftener in earlier stages of the law, one acts sometimes at one’s peril. Under this head, it may be, fall certain cases of what is known as transferred intent, an act willfully dangerous to A. resulting by misadventure in injury to B. * * * These cases aside, wrong is defined in terms of the natural or probable, at least when unintentional. * * * The range of reasonable apprehension is at times a question for the court, and at times, if varying inferences are possible, a question for the jury. Here, by concession, there was nothing in the situation to suggest to the most cautious mind that the parcel wrapped in newspaper would spread wreckage through the station. If the guard had thrown it down knowingly and willfully, he would not have threatened the plaintiff’s safety, so far as appearances could warn him. His conduct would not have involved, even then, an unreasonable probability of invasion of her bodily security. Liability can be no greater where the act is inadvertent.

The law of causation, remote or proximate, is thus foreign to the case before us. The question of liability is always anterior to the question of the measure of the consequences that go with liability. If there is no tort to be redressed, there is no occasion to consider what damage might be recovered if there were a finding of a tort. We may assume, without deciding, that negligence, not at large or in the abstract, but in relation to the plaintiff, would entail liability for any and all consequences, however novel or extraordinary. * * * There is room for argument that a distinction is to be drawn according to the diversity of interests invaded by the act, as where conduct negligent in that it threatens an insignificant invasion of an interest in property results in an unforeseeable invasion of an interest of another order, as, e. g., one of bodily security. Perhaps other distinctions may be necessary. We do not go into the question now. The consequences to be followed must first be rooted in a wrong.

The judgment of the Appellate Division and that of the Trial Term should be reversed, and the complaint dismissed, with costs in all courts.

ANDREWS, J. (dissenting).

Assisting a passenger to board a train, the defendant’s servant negligently knocked a package from his arms. It fell between the platform and the cars. Of its contents the servant knew and could know nothing. A violent explosion followed. The concussion broke some scales standing a considerable distance away. In falling, they injured the plaintiff, an intending passenger. Upon these facts, may she recover the damages she has suffered in an action brought against the master? The result we shall reach depends upon our theory as to the nature of negligence. Is it a relative concept–the breach of some duty owing to a particular person or to particular persons? Or, where there is an act which unreasonably threatens the safety of others, is the doer liable for all its proximate consequences, even where they result in injury to one who would generally be thought to be outside the radius of danger? This is not a mere dispute as to words. We might not believe that to the average mind the dropping of the bundle would seem to involve the probability of harm to the plaintiff standing many feet away whatever might be the case as to the owner or to one so near as to be likely to be struck by its fall. If, however, we adopt the second hypothesis, we have to inquire only as to the relation between cause and effect. We deal in terms of proximate cause, not of negligence.

Res Ipsa Loquitur

“Res Ipsa Loquitur”, as translated from the Latin, means “The thing speaks for itself.” This doctrine arises when the plaintiff attempts to prove negligence through circumstantial evidence, because the plaintiff is unable to show any specific acts of negligence on the part of a defendant. The application of res ipsa loquitur permits the court to shift the burden of proof to the defendant to explain his/her conduct in an attempt to avoid the imposition of liability.

The Escola case (an exploding bottle case) discusses the issue of the application of res ipsa loquitur. In order to apply the doctrine, two conditions must be met:

  • The defendant must have exclusive control over the thing causing injury (in the case of a product, at least at the time it was made);
  • The injury is of such a nature that it would not ordinarily occur in the absence of some negligence.
  • The plaintiff was not contributorily negligent.

The plaintiff must prove that the condition of the instrumentality had not been changed after it left the defendant’s possession and that the plaintiff him/herself had exercised reasonable care. At this point, the burden of proof is shifted to the defendant to show that he/she was not negligent, since the defendant has superior knowledge so as to make it reasonable for him to come forward with the required proof. Pay special notice to the concurring opinion of Justice Traynor in Escola alluding to absolute liability, a theory not formally adopted until 1963. Because of the influence of Justice Traynor, it has been said that strict liability may be based on the same inferences as is res ipsa loquitur!

The doctrine of res ipsa loquitur cannot ordinarily be applied in cases where there is direct evidence of the cause of the injury.

Escola v. Coca Cola Bottling Co. of Fresno

24 Cal.2d 453, 150 P.2d 436 (1944)

GIBSON, Chief Justice. . . . Plaintiff, a waitress in a restaurant, was injured when a bottle of Coca Cola broke in her hand. She alleged that defendant company, which had bottled and delivered the alleged defective bottle to her employer, was negligent in selling bottles containing said beverage which on account of excessive pressure of gas or by reason of some defect in the bottle was dangerous * * * and likely to explode.’ This appeal is from a judgment upon a jury verdict in favor of plaintiff.

Many authorities state that the happening of the accident does not speak for itself where it took place some time after defendant had relinquished control of the instrumentality causing the injury. Under the more logical view, however, the doctrine may be applied upon the theory that defendant had control at the time of the alleged negligent act, although not at the time of the accident, provided plaintiff first proves that the condition of the instrumentality had not been changed after it left the defendant’s possession.

Upon an examination of the record, the evidence appears sufficient to support a reasonable inference that the bottle here involved was not damaged by any extraneous force after delivery to the restaurant by defendant. It follows, therefore, that the bottle was in some manner defective at the time defendant relinquished control, because sound and properly prepared bottles of carbonated liquids do not ordinarily explode when carefully handled.

The next question, then, is whether plaintiff may rely upon the doctrine of res ipsa loquitur to supply an inference that defendant’s negligence was responsible for the defective condition of the bottle at the time it was delivered to the restaurant.
An explosion such as took place here might have been caused by an excessive internal pressure in a sound bottle, by a defect in the glass of a bottle containing a safe pressure, or by a combination of these two possible causes. The question is whether under the evidence there was a probability that defendant was negligent in anyaof these respects. If so, the doctrine of res ipsa loquitur applies.

Although it is not clear in this case whether the explosion was caused by an excessive charge or a defect in the glass there is a sufficient showing that neither cause would ordinarily have been present if due care had been used. Further, defendant had exclusive control over both the charging and inspection of the bottles. Accordingly, all the requirements necessary to entitle plaintiff to rely on the doctrine of res ipsa loquitur to supply an inference of negligence are present.

It is true that defendant presented evidence tending to show that it exercised considerable precaution by carefully regulating and checking the pressure in the bottles and by making visual inspections for defects in the glass at several stages during the bottling process. It is well settled, however, that when a defendant produces evidence to rebut the inference of negligence which arises upon application of the doctrine of res ipsa loquitur, it is ordinarily a question of fact for the jury to determine whether the inference has been dispelled. * * *

The judgment is affirmed.

SHENK, CURTIS, CARTER, and SCHAUER, JJ., concurred.

TRAYNOR, Justice.

I concur in the judgment, but I believe the manufacturer’s negligence should no longer be singled out as the basis of a plaintiff’s right to recover in cases like the present one. In my opinion it should now be recognized that a manufacturer incurs an absolute liability when an article that he has placed on the market, knowing that it is to be used without inspection, proves to have a defect that causes injury to human beings. MacPherson v. Buick Motor Co., * * * established the principle, recognized by this court, that irrespective of privity of contract, the manufacturer is responsible for an injury caused by such an article to any person who comes in lawful contact with it. * * * In these cases the source of the manufacturer’s liability was his negligence in the manufacturing process or in the inspection of component parts supplied by others. Even if there is no negligence, however, public policy demands that responsibility be fixed wherever it will most effectively reduce the hazards to life and health inherent in defective products that reach the market. It is evident that the manufacturer can anticipate some hazards and guard against the recurrence of others, as the public cannot. Those who suffer injury from defective products are unprepared to meet its consequences. The cost of an injury and the loss of time or health may be an overwhelming misfortune to the person injured, and a needless one, for the risk of injury can be insured by the manufacturer and distributed among the public as a cost of doing business. It is to the public interest to discourage the marketing of products having defects that are a menace to the public. If such products nevertheless find their way into the market it is to the public interest to place the responsibility for whatever injury they may cause upon the manufacturer, who, even if he is not negligent in the manufacture of the product, is responsible for its reaching the market. However intermittently such injuries may occur and however haphazardly they may strike, the risk of their occurrence is a constant risk and a general one. Against such a risk there should be general and constant protection and the manufacturer is best situated to afford such protection. The retailer, even though not equipped to test a product, is under an absolute liability to his customer, for the implied warranties of fitness for proposed use and merchantable quality include a warranty of safety of the product. * * * This warranty is not necessarily a contractual one * * * for public policy requires that the buyer be insured at the seller’s expense against injury. * * * The courts recognize, however, that the retailer cannot bear the burden of this warranty, and allow him to recoup any losses by means of the warranty of safety attending the wholesaler’s or manufacturer’s sale to him. Much would be gained if the injured person could base his action directly on the manufacturer’s warranty.

In the food products cases the courts have resorted to various fictions to rationalize the extension of the manufacturer’s warranty to the consumer: that a warranty runs with the chattel; that the cause of action of the dealer is assigned to the consumer; that the consumer is a third party beneficiary of the manufacturer’s contract with the dealer. They have also held the manufacturer liable on a mere fiction of negligence: ‘Practically he must know it [the product] is fit, or take the consequences, if it proves destructive.’ * * * Such fictions are not necessary to fix the manufacturer’s liability under a warranty if the warranty is severed from the contract of sale between the dealer and the consumer and based on the law of torts * * * Warranties are not necessarily rights arising under a contract. * * * And it is still generally possible where a distinction of procedure is observed between actions of tort and of contract to frame the declaration for breach of warranty in tort. * * * On the basis of the tort character of an action on a warranty, recovery has been allowed for wrongful death as it could not be in an action for breach of contract. * * * As the court said in Greco v. S. S. Kresge Co., ‘Though the action may be brought solely for the breach of the implied warranty, the breach is a wrongful act, a default, and, in its essential nature, a tort.’ Even a seller’s express warranty can arise from a noncontractual affirmation inducing a person to purchase the goods. Chamberlain Co. v. Allis-Chalmers, etc., Co., * * * ‘As an actual agreement to contract is not essential, the obligation of a seller in such a case is one imposed by law as distinguished from one voluntarily assumed. It may be called an obligation either on a quasi-contract or quasi-tort, because remedies appropriate to contract and also to tort are applicable.’ * * * As handicrafts have been replaced by mass production with its great markets and transportation facilities, the close relationship between the producer and consumer of a product has been altered. Manufacturing processes, frequently valuable secrets, are ordinarily either inaccessible to or beyond the ken of the general public. The consumer no longer has means or skill enough to investigate for himself the soundness of a product, even when it is not contained in a sealed package, and his erstwhile vigilance has been lulled by the steady efforts of manufacturers to build up confidence by advertising and marketing devices such as trade-marks. * * * Consumers no longer approach products warily but accept them on faith, relying on the reputation of the manufacturer or the trade mark. * * * Manufacturers have sought to justify that faith by increasingly high standards of inspection and a readiness to make good on defective products by way of replacements and refunds. * * * The manufacturer’s obligation to the consumer must keep pace with the changing relationship between them; it cannot be escaped because the marketing of a product has become so complicated as to require one or more intermediaries. Certainly there is greater reason to impose liability on the manufacturer than on the retailer who is but a conduit of a product that he is not himself able to test. * * *

The manufacturer’s liability should, of course, be defined in terms of the safety of the product in normal and proper use, and should not extend to injuries that cannot be traced to the product as it reached the market.

Section 328D Of The Restatement Of Torts

Section 328D sets forth the following elements of proof of res ipsa loquitur:

“It may be inferred that harm suffered by the plaintiff is caused by negligence of the defendant when a) the event is of a kind which ordinarily does not occur in the absence of negligence; b) other responsible causes, including the conduct of the plaintiff and third person, are sufficiently eliminated by the evidence; and c) the indicated negligence is within the scope of the defendant’s duty.”

causatioN

In both strict liability and negligence cases, the plaintiff must prove that the defect was a cause in fact of the injury. The issue of causation (causation in fact or legal cause) may be especially problematic in negligence cases. Under Section 431 of the Restatement, the plaintiff must prove that the negligent conduct is the legal cause of the harm to another. This is determined by showing:

• The defendant’s conduct is a substantial factor in bringing about the harm, and
• There is no rule of law or legal excuse relieving the actor from liability (i.e., no defense exists).
In addition,the plaintiff must show that the cause was proximate. Lord Bacon described proximate cause as follows: “In jure, non remota causa sed proxima spectator,” which may be translated as “In law, the near cause is looked to, not the remote one.”
There are two traditional formulations of the proximate cause test:
• But for, or sine qua non, is the basic, common sense test, still used by most courts. The plaintiff must prove that the injury would not have occurred had there not been the negligent act or omission of the defendant, or if the defect had not existed. This is essentially a negative test: The defendant’s conduct is not a cause of the event if the event would have occurred without it.
• If two or more factors exist (two or more possible causes), then courts use the “substantial factor” test to determine if both parties have caused the injury. This test is sometimes used where there are concurrent causes—where two or more factors come together to cause an injury. In DeLuryea v. Winthrop Laboratories, an inadequate warnings case, the court used the term proximate cause and stated that each cause may contribute to the plaintiff’s harm.
One of the causes need not be the sole cause of the injury – just that it has contributed as a substantial factor to the plaintiff’s injury. In a case where a court has found concurrent causes of a plaintiff’s injury, both parties are jointly and severally liable for any injury. What this means
is that the plaintiff may look to both defendants jointly for the damage (joint liability). In some states, a jury may decide to apportion damages to reflect each party’s percentage of liability or

fault. The rule of joint and several liability also permits a plaintiff to seek recovery from one defendant, in effect, holding that one party responsible for paying the entire judgment (several liability), leaving it to a defendant to seek contribution from a joint tortfeasor.
One final note… might an intervening cause that occurs after the initial negligent act serve to cut off the liability of the original negligent actor or tortfeasor? This aspect of causation involves foreseeing the normal consequences created by an actor’s negligent conduct. Several events are generally considered to be within the area of foreseeable conduct and thus would not terminate the responsibility of the original actor for their consequences.
Rescue cases
Suppose that a rescuer is injured coming to the aid of an individual who has been injured
as a result of a defective product? A little background is in order. First, there was a strange anomaly regarding certain rescuers under the common law. Under the common law of most states, so-called lay (nonprofessional/volunteer) rescuers who were themselves injured by the same defective product as the person whom they were intending to rescue are considered as foreseeable plaintiffs, and thus the rescuer could bring a suit in products liability against the manufacturer of the product that was defective. However, a majority of courts denied recovery to a professional rescuer under these circumstances, simply on policy grounds. Concerning the issue of injury to either a lay or professional rescuer by the negligent act of a third party during the rescue, it appears today that such an injury is foreseeable as to both professional and non- professional rescuers and the negligent act would not be considered as an intervening cause. The party creating the defective product could be found liable for all of these injuries.
subsequeNt iNjuRy oR illNess
A subsequent injury or illness to a plaintiff caused by the plaintiff’s weakened condition has been held to be foreseeable.
effoRts to aveRt haRm
Efforts by the plaintiff to avert harm are seen as reasonably foreseeable.
NegligeNt meDical tReatmeNt
Even subsequent negligent medical treatment by a third party has been held to be foreseeable and thus not intervening.
Products LiabiLity: a ManageriaL PersPective
113

114
NegligeNce, causatioN aNd Res ipsa loquituR
coNtRibutioN aND iNDemNity
In looking at the issue of joint and several liability raised in the discussion of proximate cause,
a comparison must be made with the concept of contribution. Contribution is a rule that distributes the loss among the various tortfeasors by requiring each to pay his/her proportional share, based on their percentage of liability? Contribution is accomplished through a process called impleading, seeking to force a party to pay their rightful share of any judgment.
Indemnity is a legal principle that shifts the loss from one tortfeasor who has been compelled to pay despite the lack of any fault to another who should bear it instead. This may be accomplished by a contractual provision providing for indemnity or through operation of law.

questioNs
1. A chauffeur working for the defendant, Peerless Transportation Co. abandoned his vehicle while it was in motion because he was being threatened by his passenger, a thief wielding a pistol. Subsequently, the unattended cab ran up onto a sidewalk and injured the plaintiff, Cordas. Cordas filed action under the theory of negligence.
a. Is Peerless Transportation Co. liable?
2. The plaintiff, Palsgraf, was standing on a platform of Long Island R.R. Co. after buying a ticket. A man with a package was trying to catch a train. To get on, he was pulled on by one guard in the train and pushed off the platform by another guard. However, he lost his package during this effort. The package fell onto the track where it was struck by the train prompting it to explode because it was filled with fireworks. The shock of the explosion caused some scales to hit and injure the plaintiff. Palsgraf filed a suit against Long Island R.R. Co. for negligence.
a. Does negligence apply? If so, how?
b. Does proximate cause apply? If so, how?
c. Is the Long Island R.R. Co. liable? Upon what theory?
3. Escola, the plaintiff, was waitressing in a restaurant and suffered injuries when a bot- tle of Coca Cola broke in her hand. She claimed that the defendant, Coca Cola Bottle Co. of Fresno, provided her employer with a defective product due to its excessive gas or some other defect, which caused it to explode.
a. Does the doctrine of Res Ipsa Loquitur apply? If so, how?
b. Was Coca Cola Bottle Co. of Fresno negligent?
c. Is the product defective?
d. Is Coca Cola Bottle Co. of Fresno liable?
4. Find a case that features either contribution or indemnity. Prove it using their defini- tions and formulations.
5. Suppose a defective platform at a train station causes a waiting passenger to fall on the track and become injured. Subsequently, a Good Samaritan rescues the passenger from an oncoming train but also sustains injuries in the process. Can the Samaritan bring action for negligence against the manufacturer of the defective platform?

Chapter Six | Privity

Privity

Consider this explanation from Gilliam, Products Liability in a Nutshell, 37 Or. L. Rev. 119, 131 (1958):

“When the consumer deals with the retailer rather than directly with the manufacturer, he establishes a contractual relationship with the retailer to which the manufacturer is not, legally speaking, a party. The manufacturer sells (directly or indirectly) to the retailer; the retailer sells to the consumer. The marketing process is a series of sales—a series of contracts. The parties to these contracts overlap in the middle of the marketing process, but not at the ends: there is an ultimate supplier and his customer, and so is the connecting link between them. The customer, however, makes no contract with… the manufacturer. These two do not deal with one another; typically they are strangers. In legal phraseology, there is no “privity of contract: between them.”

We begin this Chapter by taking a close look at the historical evolution of privity.

In the early 1800s, there were few sellers in the marketplace. As a result, cases alleging a product defect were decided on the basis of the theory of absolute liability against the manufacturer. As manufacturing capabilities increased, a negligence theory was adopted, but this led to enormous exposure on the part of the “new manufacturing class” developing in England during the Industrial Revolution. English courts developed a theory in tort cases, highly favorable to this “new manufacturing class” in the 1842 case of Winterbottom v. Wright that determined the scope of the manufacturer’s duty. The court in Winterbottom held that a duty of a manufacturer to show reasonable care would only extend to the party with whom the manufacturer had actually dealt through its contract. Since a buyer rarely dealt with a manufacturer, no contractual relationship existed between the manufacturer and the buyer. Hence, the manufacturer had no duty of due or reasonable care to the buyer because no privity of contract existed.

On the other hand, since the buyer had dealt with the retailer in purchasing a chattel (the common law term for an item of personal property), could the buyer sue the retailer? As a factual matter, in most cases, the buyer had been injured by a defect in the product not caused by any negligence on the part of the retailer (the retailer had only passed on the manufacturer’s product). So, the buyer was effectively barred from recovery against the retailer on a negligence theory and against the manufacturer on ground that the consumer was not in privity with the manufacturer. This was the origin of the doctrine termed caveat emptor, or “let the buyer beware!” which was the watch phrase of the emerging common law of the industrial age.

Two early exceptions were created by English courts. In 1852, a decade after Winterbottom v. Wright, an English court decided the case of Thomas v. Winchester, which determined that for products termed negligently labeled products (in this case, poisons), the manufacturer could not limit its liability through the defense of privity. Later in 1870, Loop v. Litchfield recognized the inherent unfairness and practical limiting nature of the doctrine of privity. The court extended the limitation on applying the privity doctrine to the range of imminently dangerous products such as poisons, explosives, deadly weapons, and the like.

The doctrine of privity was finally severely limited – some say obliterated – in Judge (later Justice) Cardozo’s opinion in the case of MacPherson v. Buick Motors, a case arising in the Court of Appeals in New York. This case dealt with the issue of vertical privity; that is, from the Manufacturer to the Retailer to the Consumer or Buyer.

In MacPherson, the manufacturer was first found to be negligent on the basis that it could have discovered defects in the construction of wooden wheels by and through a reasonable inspection of the wheels which it had failed to do! The court noted that wooden wheels
were not inherently dangerous products but that any product is likely to be dangerous if it is negligently made. The court then extended the duty of the manufacturer to those persons who would be foreseeable users within the vertical marketing chain, without a showing of privity,
in the case of all products negligently constructed or made. Since it was foreseeable that others besides the retailer would use the product, the buyer (MacPherson) was a foreseeable party and should be permitted to bring suit on the basis of the theory of negligence.

Macpherson v. Buick Motor Company

Court of Appeals of N.Y., 217 N.Y.382, 111 N.E. 1050 (1916)

Cardozo, J . . . . The defendant is a manufacturer of automobiles. It sold an automobile to a retail dealer. The retail dealer resold to the plaintiff. While the plaintiff was in the car, it suddenly collapsed. He was thrown out and injured. One of the wheels was made of defective wood, and its spokes crumbled into fragments. The wheel was not made by the defendant; it was bought from another manufacturer. There is evidence, however, that its defects could have been discovered by reasonable inspection, and that inspection was missed. There is no claim that the defendant knew of the defect and willfully concealed it. The case, in other words, is not brought within the rule of Kuelling v. Lean Mfg. Co. * * *. The charge is one, not of fraud, but of negligence. The question to be determined is whether the defendant owed a duty of care and vigilance to any one but the immediate purchaser. The foundations of this branch of the law, at least in this state, were laid in Thomas v. Winchester * * *. A poison was falsely labeled. The sale was made to a druggist, who in turn sold to a customer. The customer recovered damages from the seller who affixed the label. The defendant’s negligence,’ it was said, put human life in imminent danger.’ A poison falsely labeled is likely to injure any one who gets it. Because the danger is to be foreseen, there is a duty to avoid the injury. Cases were cited by way of illustration in which manufacturers were not subject to any duty irrespective of contract. The distinction was said to be that their conduct, though, negligent, was not likely to result in injury to any one except the purchaser. We are not required to say whether the chance of injury was always as remote as the distinction assumes. * * *

The defendant argues that things imminently dangerous to life are poisons, explosives, deadly weapons- things whose normal function it is to injure or destroy. But whatever the rule in Thomas v. Winchester may once have been, it has no longer that restricted meaning. A large coffee urn (Statler v. Ray Mfg. Co., supra) may have within itself, ifnegligently made, the potency of danger, yet no one thinks of it as an implement whose normal function is destruction. What is true of the coffee urn is equally true of bottles of aerated water (Torgeson v. Schultz, * * *).

We have mentioned only cases in this court. But the rule has received a like extension in our courts of intermediate appeal. In Burke v. Ireland, * * * it was applied to a builder who constructed a defective building; in Kahner v. Otis Elevator Co. * * * to the manufacturer of an elevator; in Davies v. Pelham Hod Elevating Co. * * *; affirmed in this court without opinion, (146 N.Y. 363) to a contractor who furnished a defective rope was to be used.

We are not required at this time either to approve or to disapprove the application of the rule that was made in these cases. It is enough that they help to characterize the trend of judicial thought. Devlin v. Smith was decided in 1882. A year later a very similar case came before the Court of Appeal in England (Heaven v. Pender, L.R. (11 Q.B.D.)503). We find in the opinion * * * the same conception of a duty, irrespective of contract, imposed upon the manufacturer by the law itself: Whenever one person supplies goods, or machinery, or the like, for the purpose of their being used by another person under such circumstances that every one of ordinary sense would, if he thought, recognize at once that unless he used ordinary care and skill with regard to the condition of the thing supplied or the mode of supplying it, there will be danger of injury to the person or property of him for whose use the thing is supplied, and who is to use it, a duty arises to use ordinary care and skill as the condition or manner of supplying such thing.’ He then points out that for a neglect of such ordinary care or skill whereby injury happens, the appropriate remedy is an action for negligence. The right to enforce this liability is not to be confined to the immediate buyer. The right, he says, extends to the persons or class of persons for whose use the thing is supplied. It is enough that the goods would in all probability be used at once * * * before a reasonable opportunity for discovering any defect which might exist,’ and that the thing supplied is of such a nature that a neglect of ordinary care or skill as to its condition or the manner of supplying it would probably cause danger to the person or property of the person for whose use it was supplied, and who was about to use it.’

On the other hand, he would exclude a case in which the goods are supplied under circumstances in which it would be a chance by whom they would be used or whether they would be used or not, or whether they would be before there would probably be means of observing any defect,” or where the goods are of such a nature that a want of care or skill as to their condition or the manner of supplying them would not probably produce danger of injury to person or property.” What was said by Lord Esher in that case did not command the full assent of his associates. His opinion has been criticized as requiring every man to take affirmative precautions to protect his neighbors as well as to refrain from injuring them’. * * * It may not be an accurate exposition of the law of England. Perhaps it may need some qualification even in our own state. Like most attempts at comprehensive definition, it may involve errors of inclusion and of exclusion. But its tests and standards, at least in their underlying principled, with whatever qualifications may be called for as they are applied to varying conditions, are the tests and standards of our law.

We hold, then, that the principle of Thomas v. Winchester is not limited to poisons, explosives, and things of like nature, to things which in their normal operation are implements of destruction. If the nature of a thing is such that it is reasonably certain to place and limb in peril when negligently made, it is then a thing of danger. Its nature gives warning of the consequences to be expected. If to the element of danger there is added knowledge that the thing will be used by persons other than the purchaser, and used without new tests then, irrespective of contract, the manufacturer of this thing of danger is under a duty to make it carefully. That is as far as we are required to go for the decision of this case. There must be knowledge of a danger, not merely possible, but probable. It is possible to use almost anything in a way that will make it dangerous if defective. That is not enough to charge the manufacturer with a duty independent of his contract. Whether a given thing is dangerous may be sometimes a question for the court and sometimes a question for the jury. There must also be knowledge that in the usual course of events the danger will be shared by others than the buyer. Such knowledge may often be inferred from the nature of the transaction. But it is possible that even knowledge of the danger and of the use will not always be enough.

The proximity or remoteness of the relation is a factor to be considered. We are dealing now with the liability of the manufacturer of the finished product, who puts it on the market to be used without inspection by his customers. If he is negligent, where danger is to be

foreseen, a liability will follow. We are not required at this time to say that it is legitimate to go back of the manufacturer of the finished product and hold the manufacturers of the component parts. To make their negligence a cause of imminent danger, an independent cause must often intervene; the manufacturer of the finished product must also fail in his duty of inspection. It may be that in those circumstances the negligence of the earlier members of the series as too remote to constitute, as to the ultimate user, an actionable wrong * * * We leave that question open to you. We shall have to deal with it when it arises. The difficulty which it suggests is not present in this case. There is here no break in the chain of cause and effect. In such circumstances, the presence of a known danger, attendant upon a known use, makes vigilance a duty. We have put aside the notion that the duty to safeguard life and limb, when the consequences of negligence may be foreseen, grows out of contract and nothing else. We have put the source of the obligation where it ought not be. We have put its source in the law. From this survey of the decisions, there thus emerges a definition of the duty of a manufacturer which enables us to measure this defendant’s liability.

Beyond all question, the nature of an automobile gives warning of probable danger if its construction is defective. This automobile was designed to go fifty miles an hour. Unless its wheels were sound and strong, injury was almost certain. It was as much a thing of danger as a defective engine for a railroad. The defendant knew the danger. It knew also that the care would be used by persons other than the buyer. This was apparent from its size; there were seats for three persons. It was apparent also from the fact that the buyer was a dealer in cars, who bought to resell. The maker of this car supplied it for the use of purchasers from the dealer just as plainly as the contractor in Devlin v. Smith supplied the scaffold for use by the servants of the owner. The dealer was indeed the one person of whom it might be said with some approach to certainly that by him the car would not be used. Yet the defendant would have us say that he was the one person whom it was under a legal duty to protect. The law does not lead us to so inconsequent a conclusion. Precedents drawn from the days of travel by stage coach do not fit the conditions of travel today. The principle that the danger must be imminent does not change, but the things subject to the principle do change. They are whatever the needs of life in a developing civilization require them to be. In reaching this conclusion, we do not ignore the decisions to the contrary in other jurisdictions. It was held in Cadillac M.C. Co. v. Johnson that anautomobile is not within the rule of Thomas v. Winchester. * * * The earlier cases are * * * at first sight inconsistent with our conclusion, may be reconciled upon the ground that the negligence was too remote, and that another cause had intervened. But even when they cannot be reconciled, the difference is rather in the application of the principle than in the principle itself. Judge Sanborn says, for example, that the contractor who builds a bridge, or the manufacturer who builds a car, cannot ordinarily foresee injury to other persons than the owner as the probable result. * * * We take a different view. We think that injury to others is to be foreseen not merely as a possible, but as an almost inevitable result. * * * Indeed Judge Sanborn concedes that his view is not to be reconciled with our decision in Devlin v. Smith (supra). The doctrine of that decision has now become the settled law of this state, and we have no desire to depart form it. In England the limits of the rule are still unsettled. Winterbottom v. Wright * * * is often cited. The defendant undertook to provide a mail coach to carry the mail bags. The coach broke down from latent defects in its construction. The defendant, however, was not the manufacturer. The court held that he was not liable for injuries to a passenger. The case was decided on a demurrer to the declaration. * * *

* * * The court left it to the jury to say whether the defendant ought to have foreseen that the car, if negligently constructed, would become imminently dangerous.’ Subtle distinctions are drawn by the defendant between things inherently dangerous and things imminently dangerous, but the case does not turn upon these verbal niceties. If danger was to be expected as reasonably certain, there was a duty of vigilance, and this whether you call the danger inherent or imminent. In varying forms that the court would not have been justified in ruling as a matter of law that the car was a dangerous thing. If there was any error, it was none of which the defendant can complain. We think the defendant was not absolved from a duty of inspection because it bought the wheels from a reputable manufacturer. It was not merely a dealer in automobiles. It was a manufacturer of automobiles. It was responsible for the finished product. It was not at liberty to put the finished product on the market without subjecting the component parts to ordinary and simple tests. * * * Under the charge of the trial judge nothing more was required of it. The obligation to inspect must vary with the nature of the thing to be inspected. The more probable the danger, the greater the need of caution. There is little analogy between this case and Carlson v. Phoenix Bridge Co., * * * where the defendant bought a tool for a servant’s use. The making of tools was not the business on which the master was engaged. Reliance on the skill of the manufacturer was proper and almost inevitable. But that is not the defendant’s situation. Both by its relation to the work and by the nature of its business, it is charged with a stricter duty. Other rulings complained of have been considered, but no error has been found on them.

The judgment should be affirmed.

The case of Henningsen v. Bloomfield Motors raised the issue of privity in a warranty action. The case involved both the issue of vertical privity (now settled in MacPherson) and horizontal privity, since it was Mrs. Henningsen who was seeking recovery for her personal injury and Mrs. Henningsen was not the purchaser of the automobile.


Manufacturer >>> Retailer >>>
Mr. Klaus Henningsen [Purchaser] > Helen Henningsen [User]

The manufacturer had argued that since it was not a party to the sale (contract) by the dealer to Mr. Henningsen, the absence of privity eliminated the existence of any warranty from the manufacturer to Mr. Henningsen, except that which was expressly given by the manufacturer. Based on MacPherson, however, the court rejected the requirement of privity and found that Mr. Henningsen was in fact covered by the implied warranty of merchantability – despite the lack of privity.

The court then turned its attention to the claims of Mrs. Helen Henningsen. Clearly, Mrs. Henningsen was not the purchaser of the automobile or a party to the contract. However, the court extended protection to Mrs. Henningsen (horizontally) by the following formulation, in effect, also extending the warranty of merchantability to all those persons who:

“Within the reasonable contemplation of the parties to the warranty might be expected to become a user of the automobile.’’

The Henningsen rule of extended horizontal privity may be found in the original text of U.C.C. Section 2-318, Alternative A:

“A seller’s warranty, whether express or implied, extends to any natural person who is in the family or household of his buyer or who is a guest in his home if it is reasonable to expect that such person may use, consume or be affected by the goods and who is injured in person by breach of the warranty. A seller may not exclude or limit the operation of this section.”

We will see later in our discussion of warranties under the UCC that Section 2-318 was extended to other parties as the law of warranties was further developed and extended.

Henningsen v. Bloomfield Motors, Inc.

Supreme Court of New Jersey, 32 N.J. 358, 161 A.2d 69 (1960)

FRANCIS, JUDGE

Mr. Henningsen purchased an automobile from defendant Bloomfield Motors and gave it to his wife as a gift. The automobile was manufactured by defendant Chrysler Corporation. Ten days after delivery of the car, Mrs. Henningsen was injured in an accident that resulted when the steering failed suddenly and without warning. Up to this time the car had functioned properly. Mrs. Henningsen sued both defendants for breach of express and implied warranties and for negligence. Her husband joined in the action seeking compensation for his consequential losses. The trial judge dismissed the negligence counts because of insufficient evidence. He gave the case to the jury on the implied warranty theory only. The jury rendered verdicts against both defendants in favor of the plaintiffs. Defendants appealed and plaintiffs cross-appealed, claiming that the negligence count should not have been dismissed.

The sales contract signed by Mr. Henningsen was a standard printed form. It contained the following language concerning the warranty. It was in fine print and located on the back of the form:

“7. It is expressly agreed that there are no warranties, express or implied, made by either the dealer or the manufacturer on the motor vehicle, chassis, of parts furnished hereunder except as follows.” ‘The manufacturer warrants each new motor vehicle (including original equipment placed thereon by the manufacturer except tires), chassis or parts manufactured by it to be free from defects in material or workmanship under normal use and service. Its obligation under this warranty being limited to making good at its factory any part or parts thereof which shall, within ninety (90) days after delivery of such vehicle to the original purchaser or before such vehicle has been driven 4,000 miles, whichever event shall first occur, be returned to it with transportation charges prepaid and which its examination shall disclose to its satisfaction to have been thus defective; this warranty being expressly in lieu of all other warranties expressed or implied, and all other obligation or liabilities on its part, and it neither assumes nor authorizes any other person to assume for it any other liability in connection with the sale of its vehicles. * * *.’ “ (Emphasis added.)

I. THE CLAIM OF IMPLIED WARRANTY AGAINST THE MANUFACTURER

In the ordinary case of sale of goods by description an implied warranty of merchantability is an integral part of the transaction. * * * If the buyer, expressly or by implication, makes known to the seller the particular purpose for which the article is required and it appears that he has relied on the seller’s skill or judgment, an implied warranty arises of reasonable fitness for that purpose. * * * The former type of warranty simply means that the thing sold is reasonably fit for the general purpose for which it is manufactured and sold. * * * As Judge (later Justice) Cardozo remarked in Ryan, supra, the distinction between a warranty of fitness for a particular purpose and of merchantability in many instances is practically meaningless. In the particular case he was concerned with food for human consumption in a sealed container. Perhaps no more apt illustration of the notion can be thought of than the instance of the ordinary purchaser who informs the automobile dealer that he desires a car for the purpose of business and pleasure driving on the public highway.* * *

Of course such sales, whether oral or written, may be accompanied by an express warranty. Under the broad terms of the Uniform Sale of Goods Law any affirmation of fact relating to the goods is an express warranty if the natural tendency of the statement is to induce the buyer to make the purchase. * * * [The act] preserves and continues any permissible implied warranty, despite an express warranty, unless the two are inconsistent. * * * The uniform act codified, extended and liberalized the common law of sales. The motivation in part was to ameliorate the harsh doctrine of caveat emptor and in some measure to impose a reciprocal obligation on the seller to beware. The transcendent value of the legislation, particularly with respect to implied warranties, rests in the fact that obligations on the part of the seller were imposed by operation of law, and did not depend for their existence upon express agreement of the parties. And of tremendous significance in a rapidly expanding commercial society was the recognition of the right to recover damages on account of personal injuries arising from a breach of warranty. * * * The particular importance of this advance resides in the fact that under such circumstances strict liability is imposed upon the maker or seller of the product. Recovery of damages does not depend upon proof of negligence or know edge of the defect. * * *

As the Sales Act and its liberal interpretation by the courts threw this protective cloak about the buyer, the decisions in various jurisdictions revealed beyond doubt that many manufacturers took steps to avoid these ever increasing warranty obligations. Realizing that the act governed the relationship of buyer and seller, they undertook to withdraw from actual and direct contractual contact with the buyer. They ceased selling products to the consuming public through their own employees and making contracts of sale in their own names. Instead, a system of independent dealers was established; their products were sold to dealers who in turn dealt with the buying public, ostensibly solely in their own personal capacity as sellers. In the past in many instances, manufacturers were able to transfer to the dealers burdens imposed by the act and thus achieved a large measure of immunity for themselves. * * *

The terms of the warranty are a sad commentary upon the automobile manufacturers, marketing practices. Warranties developed in the law in the interest of and to protect the ordinary consumer who cannot be expected to have the knowledge or capacity or even the opportunity to make adequate inspection of mechanical instrumentalities, likeautomobiles, and to decide for himself whether they are reasonably fit for the designed purpose. * * * But the ingenuity of the Automobile Manufacturers Association, by means of its standardized form, has metamorphosed the warranty into a device to limit the maker’s liability. * * *

Putting aside for the time being the problem of the efficacy of the disclaimer provisions contained in the express warranty, a question of first importance to be decided is whether an implied warranty of merchantability by Chrysler Corporation accompanied the sale of the automobile to Claus Henningsen.

Preliminarily, it may be said that the express warranty against defective parts and workmanship is not inconsistent with an implied warranty of merchantability. Such warranty cannot be excluded for that reason. * * *

Chrysler points out that an implied warranty of merchantability is an incident of a contract of sale. It concedes, of course, the making of the original sale to Bloomfield Motors, Inc., but maintains that this transaction marked the terminal point of its contractual connection with the car. Then Chrysler urges that since it was not a party to the sale by the dealer to Henningsen, there is no privity of contract between it and the plaintiffs, and the absence of this privity eliminates any such implied warranty.

There is no doubt that under early common-law concepts of contractual liability only those persons who were parties to the bargain could sue for a breach of it. In more recent times a noticeable disposition has appeared in a number of jurisdictions to break through the narrow barrier of privity when dealing with sales of goods in order to give realistic recognition to a universally accepted fact. The fact is that the dealer and the ordinary buyer do not, and are not expected to, buy goods, whether they be foodstuffs or automobiles, exclusively for their own consumption or use. Makers and manufacturers know this and advertise and market their products on that assumption; witness, the “family,” car, the baby foods, etc. The limitations of privity in contracts for the sale of goods developed their place in the law when marketing conditions were simple, when maker and buyer frequently met face to face on an equal bargaining plane and when many of the products were relatively uncomplicated and conducive to inspection by a buyer competent to evaluate their quality. * * * With the advent of mass marketing, the manufacturer became remote from the purchaser, sales were accomplished through intermediaries, and the demand for the product was created by advertising media. In such an economy it became obvious that the consumer was the person being cultivated.

Manifestly, the connotation of “consumer” was broader than that of “buyer.” He signified such a person who, in the reasonable contemplation of the parties to the sale, might be expected to use the product. Thus, where the commodities sold are such that if defectively manufactured they will be dangerous to life or limb, then society’s interests can only be protected by eliminating the requirement of privity between the maker and his dealers and the reasonably expected ultimate consumer. In that way the burden of losses consequent upon use of defective articles is borne by those who are in a position to either control the danger or make an equitable distribution of the losses when they do occur. As Harper & James put it, “The interest in consumer protection calls for warranties by the maker that do run With the goods, to reach all who are likely to be hurt by the use of the unfit commodity for a purpose ordinarily to be expected.” * * *

Although only a minority of jurisdictions have thus far departed from the requirement of privity, the movement in that direction is most certainly gathering momentum. Liability to the ultimate consumer in the absence of direct contractual connection has been predicated upon a variety of theories. Some courts hold that the warranty runs with the article like a covenant running with land; others recognize a third-party beneficiary thesis; still others rest their decision on the ground that public policy requires recognition of a warranty made directly to the consumer. * * *

Most of the cases where lack of privity has not been permitted to interfere with recovery have involved food and drugs. * * * In fact, the rule as to such products has been characterized as an exception to the general doctrine. But more recently courts, sensing the inequity of such limitation, have moved into broader fields: home permanent wave set, * * *

We see no rational doctrinal basis for differentiating between a fly in a bottle of beverage and a defective automobile. The unwholesome beverage may bring illness to one person, the defective car, with its great potentiality for harm to the driver, occupants, and others, demands even less adherence to the narrow barrier of privity. * * *

Under modern conditions the ordinary layman, on responding to the importuning of colorful advertising, has neither the opportunity nor the capacity to inspect or to determine the fitness of an automobile for use; he must rely on the manufacturer who has control of its construction, and to some degree on the dealer who, to the limited extent called for by the manufacturer’s instructions, inspects and services it before delivery. In such a marketing milieu his remedies and those of persons who properly claim through him should not depend “upon the intricacies of the law of sales. The obligation of the manufacturer should not be based alone on privity of contract. It should rest, as was once said, upon ‘the demands of social justice.’ “ Masetti v. Armour & Co., 75 Wash. 622, 135 P. 633, 635, 48 L.R.A., N.S., 213 (Sup.Ct. 1913). “If privity of contract is required,” then, under the circumstances of modern merchandising, “privity of contract exists in the consciousness and understanding of all right-thinking persons., Madouros v. Kansas City Coca-Cola Bottling Co., [90 S.W.2d 445, 450 (Mo.App. 1936).

Accordingly, we hold that under modern marketing conditions, when a manufacturer puts a new automobile in the stream of trade and promotes its purchase by the public, an implied warranty that it is reasonably suitable for use as such accompanies it into the hands of the ultimate purchaser. Absence of agency between the manufacturer and the dealer who makes the ultimate sale is immaterial.

II. THE EFFECT OF THE DISCLAIMER AND LIMITATION OF LIABILITY CLAUSES ON THE IMPLIED WARRANTY OF MERCHANTABILITY

* * *

In view of the cases in various jurisdictions suggesting at the conclusion which we have now reached with respect to the implied warranty of merchantability, it becomes apparent that manufacturers who enter into promotional activities to stimulate consumer buying may incur warranty obligations of either or both the express or implied character. These developments in the law inevitably suggest the inference that the form of express warranty made part of the Henningsen purchase contract was devised for general use in the automobile industry as a possible means of avoiding the consequences of the growing judicial acceptance of the thesis that the described express or implied warranties run directly to the consumer.

In the light of these matters, what effect should be given to the express warranty in question which seeks to limit the manufacturer’s liability to replacement of defective parts, and which disclaims all other warranties, express or implied? In assessing its significance we must keep in mind the general principle that, in the absence of fraud, one who does not choose to read a contract before signing it, cannot later relieve himself of its burdens.

* * * And in applying that principle, the basic tenet of freedom of competent parties to contract is a factor of importance. But in the framework of modern commercial life and business practices, such rules cannot be applied on a strict, doctrinal basis. The conflicting interests of the buyer and seller must be evaluated realistically and justly, giving due weight to the social policy evinced by the Uniform Sales Act, the progressive decisions of the courts engaged in administering it, the mass production methods of manufacture and distribution to the public, and the bargaining position occupied by the ordinary consumer in such an economy. This history of the law shows that legal doctrines, as first expounded, often prove to be inadequate under the impact of later experience. In such case, the need for justice has stimulated the necessary qualifications or adjustments. * * *

It is apparent that the public has an interest not only in the safe manufacture of automobiles, but also, as shown by the Sales Act, in protecting the rights and remedies of purchasers, so far as it can be accomplished consistently with our system of free enterprise. In a society such as ours, where the automobile is a common and necessary adjunct of daily life, and where its use is so fraught with danger to the driver, passengers and the public, the manufacturer is under a special obligation in connection with the construction, promotion and sale of his cars. Consequently, the courts must examine purchase agreements closely to see if consumer and public interests are treated fairly.

* * * As we have said, warranties originated in the law to safeguard the buyer and not to limit the liability of the seller or manufacturer. It seems obvious in this instance that the motive was to avoid the warranty obligations which are normally incidental to such sales. The language gave little and withdrew much. In return for the delusive remedy of replacement of defective parts at the factory, the buyer is said to have accepted the exclusion of the maker’s liability for personal injuries arising from the breach of the warranty, and to have agreed to the elimination of any other express or implied warranty. An instinctively felt sense of justice cries out against such a sharp bargain. But does the doctrine that a person is bound by his signed agreement, in the absence of fraud, stand in the way of any relief?

In the modern consideration of problems such as this, Corbin suggests that practically all judges are “chancellors” and cannot fail to be influenced by any equitable doctrines that are available. And he opines that “there is sufficient flexibility in the concepts of fraud, duress, misrepresentation and undue influence, not to mention differences in economic bargaining power” to enable the courts to avoid enforcement of unconscionable provisions in long printed standardized contracts. * * * Freedom of contract is not such an immutable doctrine as to admit of no qualification in the area in which we are concerned. * * *

The traditional contract is the result of free bargaining of parties who are brought together by the play of the market, and who meet each other on a footing of approximate economic equality. In such a society there is no danger that freedom of contract will be a threat to the social order as a whole. But in present-day commercial life the standardized mass contract has appeared. It is used primarily by enterprises with strong bargaining power and position. “The weaker party, in need of the goods or services, is frequently not in a position to shop around for better terms, either because the author of the standard contract has a monopoly (natural or artificial) or because all competitors use the same clauses. His contractual intention is but a subjection more or less voluntary to terms dictated by the stronger party, terms whose consequences are often understood in a vague way, if at all.” ** *

The warranty before us is a standardized form designed for mass use. It is imposed upon the automobile consumer. He takes it or leaves it, and he must take it to buy an automobile. No bargaining is engaged in with respect to it. In fact, the dealer through whom it comes to the buyer is without authority to alter it; his function is ministerial — simply to deliver it. The form warranty is not only standard with Chrysler but, as mentioned above, it is the uniform warranty of the Automobile Manufacturers Association. * * *

* * *

The task of the judiciary is to administer the spirit as well as the letter of the law. On issues such as the present one, part of that burden is to protect the ordinary man against the loss of important rights through what, in effect, is the unilateral act of the manufacturer. The status of the automobile industry is unique. Manufacturers are few in number and strong in bargaining position. In the matter of warranties on the sale of their products, the Automotive Manufacturers Association has enabled them to present a united front. From the standpoint of the purchaser, there can be no arms length negotiating on the subject. Because his capacity for bargaining is so grossly unequal, the inexorable conclusion which follows is that he is not permitted to bargain at all. He must take or leave the automobile on the warranty terms dictated by the maker. He cannot turn to a competitor for better security. Public policy at a given time finds expression in the Constitution, the statutory law and in judicial decisions. In the area of sale of goods, the legislative will has imposed an implied warranty of merchantability as a general incident of sale of an automobileby description. The warranty does not depend upon the affirmative intention of the parties. It is a child of the law; it annexes itself to the contract because of the very nature of the transaction. Minneapolis Steel & Machinery Co. v. Casey Land Agency, 51 N.D. 832, 201 N.W. 172 (Sup.Ct. 1924). The judicial process has recognized a right to recover damages for personal injuries arising from a breach of that warranty. The disclaimer of the implied warranty and exclusion of all obligations except those specifically assumed by the express warranty signify a studied effort to frustrate that protection. True, the Sales Act authorizes agreements between buyer and seller qualifying the warranty obligations. But quite obviously the legislature contemplated lawful stipulations (which are determined by the circumstances of a particular case) arrived at freely by parties of relatively equal bargaining strength. The lawmakers did not authorize the automobile manufacturer to use its grossly disproportionate bargaining power to relieve itself from liability and to impose on the ordinary buyer, who in effect has no real freedom of choice, the grave danger of injury to himself and others that attends the sale of such a dangerous instrumentality as a defectively made automobile. In the framework of this case, illuminated as it is by the facts and the many decisions noted, we are of the opinion that Chrysler’s attempted disclaimer of an implied warranty of merchantability and of the obligations arising therefrom is so inimical to the public good as to compel an adjudication of its invalidity. * *

IV. PROOF OF BREACH OF THE IMPLIED WARRANTY OF MERCHANTABILITY

Both defendants argue that the proof adduced by plaintiffs as to the happening of the accident was not sufficient to demonstrate a breach of warranty. Consequently, they claim that their motion for judgment should have been granted by the trial court. We cannot agree. In our view, the total effect of the circumstances shown from purchase to accidentis adequate to raise an inference that the car was defective and that such condition was causally related to the mishap. See, Yormack v. Farmers, Coop. Ass’n of N.J., 11 N.J. Super. 416, 78 A.2d 421 (App. Div. 1951) * * *. Thus, determination by the jury was required.

The proof adduced by the plaintiffs disclosed that after servicing and delivery of the car, it operated normally during the succeeding ten days, so far as the Henningsens could tell. They had no difficulty or mishap of any kind, and it neither had nor required any servicing. It was driven by them alone. The owner’s service certificate provided for return for further servicing at the end of the first 1,000 miles–less than half of which had been covered at the time of Mrs. Henningsen’s injury.

The facts, detailed above, show that on the day of the accident, ten days after delivery, Mrs. Henningsen was driving in a normal fashion, on a smooth highway, when unexpectedly the steering wheel and the front wheels of the car went into the bizarre action described. Can it reasonably be said that the circumstances do not warrant an inference of unsuitability for ordinary use against the manufacturer and the dealer? Obviously there is nothing in the proof to indicate in the slightest that the most unusual action of the steering wheel was caused by Mrs. Henningsen’s operation of the automobile on this day, or by the use of the car between delivery and the happening of the incident. Nor is there anything to suggest that any external force or condition, unrelated to the manufacturing or servicing of the car operated as an inducing or even concurring factor.

* * *

[T]he question of breach of warranty * * * was properly placed in the hands of the jury. In our judgment, the evidence shown, as a matter of preponderance of probabilities, would justify the conclusion by the ultimate triers of the facts that the accident was caused by a failure of the steering mechanism of the car and that such failure constituted a breach of the warranty of both defendants.

* * *

V. THE DEFENSE OF LACK OF PRIVITY AGAINST MRS. HENNINGSEN

Both defendants contend that since there was no privity of contract between them and Mrs. Henningsen, she cannot recover for breach of any warranty made by either of them. On the facts, as they were developed, we agree that she was not a party to the purchase agreement. * * * Her right to maintain the action, therefore, depends upon whether she occupies such legal status thereunder as to permit her to take advantage of a breach of defendants’ implied warranties.

For the most part the cases that have been considered dealt with the right of the buyer or consumer to maintain an action against the manufacturer where the contract of sale was with a dealer and the buyer had no contractual relationship with the manufacturer. In the present matter, the basic contractual relationship is between Claus Henningsen, Chrysler, and Bloomfield Motors, Inc. The precise issue presented is whether Mrs. Henningsen, who is not a party to their respective warranties, may claim under them. In our judgment, the principles of those cases and the supporting texts are just as proximately applicable to her situation. We are convinced that the cause of justice in this area of the law can be served only by recognizing that she is such a person whom in the reasonable contemplation of the parties to the warranty, might be expected to become a user of the automobile. Accordingly, her lack of privity does not stand in the way of prosecution of the injury suit against the defendant Chrysler.

* * *

[I]t cannot be overlooked that historically actions on warranties were in tort also, sounding in deceit. * * * The contract theory gradually emerged, although the tort idea has continued to lurk in the background, making the warranty “a curious hybrid of tort and contract.” Prosser, supra, 83. An awareness of this evolution makes for ready acceptance of the relaxation of rigid concepts of privity when third persons, who in the reasonable contemplation of the parties to a warranty might be expected to use or consume the product sold, are injured by its unwholesome or defective state.

* * *

Under all of the circumstances outlined above, the judgments in favor of the plaintiffs and against the defendants are affirmed.

In Henningsen, the hybrid nature of a warranty, arising both under contract and tort theories, led the court to reject the rigid privity requirement of contract and instead to adopt a more consumer friendly foreseeability standard associated with tort liability, especially in negligence cases.

Questions

  1. The plaintiff, Winterbottom, had been contracted by the postmaster general to drive a mail coach. The defendant, Wright, had been contracted by the postmaster to main- tain the coach. While Winterbottom was driving, the coach collapsed and he sus- tained injuries. Winterbottom brought suit asserting that Wright was negligent and disregarded his contract.
    1. How did the ruling constrain the law’s stance on negligence?
    2. Is Wright liable?
  2. How did Thomas v. Winchester determine that manufacturers could not limit liability through the defense of privity.
  3. How did Loop v. Litchfield uncover the flaw of the doctrine of privity?
  4. Buick Motor Company, the defendant, is a manufacturer of automobiles. It sold one of its automobiles to a retail dealer that proceeded to resell to MacPherson, the plaintiff. While driving, the car collapsed because one of the wheels was made from defective wood. Consequently, the plaintiff was thrown out of the car and sustained injuries. Furthermore, the wheel was not made by the defendant, but bought from another manufacturer. However, its defects could have been discovered by reasonable inspection. The plaintiff sued for negligence.
    1. Does the doctrine of vertical privity apply? If so, how?
    2. Is Buick Motor Company liable?
  5. Mr. Henningsen purchased an automobile from defendant, Bloomfield Motors Inc., as a gift for his wife. The automobile was manufactured by Chrysler Corporation. Ten days after delivery, Mrs. Henningsen was injured in an accident when the steering suddenly failed. Mrs. Henningsen brought suit against Bloomfield Motors Inc. and Chrysler Corporation for breach of express and implied warranties and additionally for negligence.
    1. How was horizontal privity extended in this case?
    2. Is Chrysler liable? Is Bloomfield Motors Inc. liable?