Explained: Product Liability under the Consumer Protection Act 2019

Under the Consumer Protection Act of 2019, “Product Liability” is defined as “the responsibility of a product manufacturer or product seller, of any product or service, to compensate for any harm caused to a customer by such defective product manufactured or sold or by deficiency is service-related thereto”[30]. For the sake of clarity, product liability means the responsibility of the product manufacturer or product seller, of any product or service, related to the product or service to compensate for any harm caused to a consumer by such defective product manufactured or sold or by deficiency in services relating to a product. Any person is entitled to make a claim of product liability against a product manufacturer product seller or product service provider for the defective products/services.

Ingredients to initiate Product Liability Action:

The product manufacturer will be liable if a product contains a manufacturing defect, is defective in design, or there is a deviation from manufacturing specifications, does not conform to the express warranty, or fails to contain adequate instructions of correct usage to prevent any harm or any warning regarding improper or incorrect usage. The absence of negligence or fraud in making an express warranty of a product cannot be pleaded as a defence [31].

The product service provider may be liable if (a) the service provided was faulty or imperfect or deficient or inadequate in quality, nature, or manner of performance which is required to be provided by or under any law for the time being in force, or under any contract or otherwise; or (b) there was an act of omission or commission or negligence or conscious withholding any information which caused harm; or (c) the service provider did not issue adequate instructions or warnings to prevent any harm, or (d) the service did not conform to express warranty or the terms and conditions of the contract[32].

Product seller who is not a product manufacturer may be held liable if (a) he has exercised substantial control over the designing, testing, manufacturing, packaging or labelling of a product that caused harm; or (b) he has altered or modified the product and such alteration or modification was the substantial factor in causing the harm; or (c) he has made an express warranty of a product independent of any express warranty made by a manufacturer and such product failed to conform to the express warranty made by the product seller which caused the harm; or (d) the product has been sold by him and the identity of product manufacturer of such product is not known, or if known, the service of notice or process or warrant cannot be effected on him or he is not subject to the law which is in force in India or the order, if any, passed or to be passed cannot be enforced against him; or (e) he failed to exercise reasonable care in assembling, inspecting or maintaining such product or he did not pass on the warnings or instructions of the product manufacturer regarding the dangers involved or proper usage of the product[33].

Exceptions to Product Liability Action: The CPA 2019 envisages certain scenarios where product liability action cannot be produced against the product seller. No liability will be fastened on the product seller if at the time of harm, the product was misused, altered, or modified [34].

In any product liability action based on the failure to provide adequate warnings or instructions, the product manufacturer shall not be liable, if[35]:

• the product was purchased by an employer for use at the workplace and the product manufacturer had provided warnings or instructions to such employer;
• the product was sold as a component or material to be used in another product and necessary warnings or instructions were given by the product manufacturer to the purchaser of such component or material, but harm was caused to the complainant by the use of the end product in which such component or material was used;
• the product was legally meant to be used or dispensed only by or under the supervision of an expert or a class of experts and the product manufacturer had employed reasonable means to give the warnings or instructions for usage of such product to such expert or class of experts; or
• the complainant, while using such a product, was under the influence of alcohol or any prescription drug which had not been prescribed by a medical practitioner.

While using the same phrase in its preamble, the New Act(CPA 2019), has substantially enhanced the scope of protection afforded to consumers, by bringing within its purview advertising claims, endorsements, and product liability, all of which play a fundamental role in altering the consumer behaviour and retail trends.

Related article: