Concept of Product Liability**

Meaning of Product Liability (Section 2(34))

The introduction of Product Liability in the Consumer Protection Act, 2019, marks a significant enhancement in consumer protection in India. It shifts the focus from merely addressing defects or deficiencies to holding parties in the supply chain accountable for harm caused by their products or related services.

According to **Section 2(34)** of the Consumer Protection Act, 2019, product liability means the **responsibility of a product manufacturer or product seller, of any product or service, to compensate for any harm caused to a consumer by such defective product or deficient service.**

Responsibility of product manufacturer, service provider, seller for any loss or injury caused

This definition establishes a direct link between a defective product or deficient service related to a product, the harm suffered by a consumer, and the liability of specific entities in the supply chain to provide compensation. Key aspects:

**Who is Responsible?** The liability primarily rests on the **product manufacturer**, **product seller**, and **product service provider**.
**What Causes Liability?** A **defective product** or a **deficient service** related to the product.
**What is the Consequence?** The obligation to **compensate for any harm caused** to a consumer.

What is a 'Defective Product' for Product Liability? (Section 2(10))

The definition of 'defect' (Section 2(10)) applies here, but for product liability actions, the Act specifically clarifies the grounds on which a product manufacturer or seller shall be liable for a defective product in Sections 84 and 86 respectively. These grounds essentially state that the product is defective if there is a manufacturing defect, a defect in design, a deviation from manufacturing specifications, inadequate instructions or warnings, non-conformity with express warranty, or if the product is not used as intended.

What is 'Harm'? (Section 2(22))

As defined earlier, 'harm' in product liability includes damage to property, personal injury, illness, death, and related mental agony or loss. It generally excludes damage to the product itself or monetary loss from the transaction itself, unless linked to other harm.

Product liability makes it easier for consumers to claim compensation for injuries or losses resulting from unsafe or faulty products, providing protection beyond the traditional remedies of replacement or refund for the product itself. It introduces a form of strict liability in certain cases, meaning the consumer might not have to prove negligence on the part of the manufacturer to establish liability for harm caused by a defective product.

Product Liability Defences (Section 83)

While product liability makes it easier for consumers to seek compensation, the Act also provides specific defences that the product manufacturer, product seller, or product service provider can take to avoid liability. Section 83 lists defences specific to a **product seller** when the liability is claimed for a defect in manufacturing, design, or inadequate warnings. Sections 85 and 87 deal with defences for product service provider and product manufacturer respectively.

Let's focus on the typical defences available to the parties facing a product liability claim, drawing from various sections (primarily Section 87 for manufacturer, Section 86 for seller, and general principles). The yellow subheadings in the prompt don't precisely mirror the section numbers, but represent common defence arguments.

Defence of the product not being defective

A primary defence is to prove that the product was **not defective** at the time it was sold or left the control of the liable party. This involves demonstrating that the product met all manufacturing specifications, was designed properly, had adequate warnings/instructions, and conformed to warranties. If the product was not defective, then the cause of harm lies elsewhere, and product liability does not apply. This is a fundamental defence against a product liability action.

Defence of not being supplied for commercial purpose

Product liability actions can only be brought by a 'consumer' as defined in the Act. As noted earlier, the definition of 'consumer' generally excludes persons obtaining goods or services for **resale or for any commercial purpose** (with the exception for self-employment). Therefore, if the person who suffered harm obtained the product or service for such an excluded commercial purpose, the business can raise the defence that the complainant is not a 'consumer' under the Act, and thus a product liability action under this Act is not maintainable (Section 2(7)).

Defence of no failure to exercise reasonable care

While product liability can involve elements of strict liability for manufacturers (especially for manufacturing defects), for product service providers (Section 85) and for product sellers (Section 86, unless they significantly altered the product or made express warranties), the liability often arises from a failure to exercise reasonable care. The defence can be raised that they **exercised reasonable care** in providing the service or selling the product and the harm was not due to their negligence or lack of care.

For example, a product service provider might argue they followed standard procedures and used reasonable skill. A product seller might argue they were simply a retailer selling a product in a sealed package and had no reason to know about the defect, provided they didn't make misleading claims or alter the product (defences available under Section 86).

Defence of misuse of product

A common and valid defence is that the harm was caused because the consumer **misused the product** or used it in a manner that was contrary to the instructions or warnings provided, or in a way that was not intended or reasonably foreseeable. If the product was not defective but the harm occurred due to the consumer's improper usage, the liable party can argue that they are not responsible (Section 87(1)(e) for manufacturer). For example, using an electrical appliance meant for domestic use in a heavy industrial setting, or ignoring explicit safety warnings on a product.

Defence of contributory act of the complainant

Similar to misuse, if the **complainant's own actions or negligence contributed** to the harm suffered, the liable party can raise the defence of **contributory negligence**. While this might not fully absolve the business of liability, it can reduce the amount of compensation awarded. If the harm was solely caused by the complainant's own actions and not the product/service, then there is no liability under product liability. (General legal principles apply here, although specific provisions might elaborate on this in rules).

Other Defences (Section 87 for Manufacturer):

Section 87 provides several other defences specifically for a product manufacturer in a product liability action, such as:

The product was misused, altered, or modified by the consumer or a third party.
The manufacturer had issued adequate warnings and instructions, and the consumer failed to follow them.
The product was sold as a component or material to another product, and the harm was caused by the faulty design or assembly of the final product by the other manufacturer.
The defect was caused by compliance with mandatory standards.
The product was used in contravention of express warranty.

These defences ensure that the product manufacturer, seller, or service provider is not held liable in all circumstances, particularly when the harm is attributable to the consumer's actions, third-party interference, or when they have met their obligations regarding design, manufacturing, and warnings.

Product Liability Action

A **Product Liability Action** is the legal proceeding initiated by a consumer to claim compensation for harm caused by a defective product or deficient service related to a product. It is a specific type of complaint that can be filed before the consumer dispute redressal agencies under the Consumer Protection Act, 2019.

Against whom it can be brought

A product liability action can be brought against one or more parties in the supply chain of the product. The Act primarily identifies three categories of parties who can be held liable in a product liability action:

**Product Manufacturer (Section 84):** The person who manufactures a product or part of a product, assembles parts, puts his mark on a product manufactured by others, or imports a product. A manufacturer can be held liable if the product has a manufacturing defect, a design defect, deviates from manufacturing specifications, does not conform to express warranty, or fails to contain adequate instructions or warnings, AND this defect caused harm. Liability can also arise if the product is not used as intended or is used in a reasonably foreseeable manner, even if not intended.
**Product Service Provider (Section 85):** The person who provides any service in relation to the product. A product service provider can be held liable if the service provided was deficient or imperfect or faulty, or if they were negligent or failed to exercise reasonable care in providing the service, AND this deficiency caused harm.
**Product Seller (Section 86):** The person who sells, distributes, leases, installs, prepares, packages, labels, markets, repairs, or maintains the product or is otherwise involved in placing a product for commercial purpose. A seller can be held liable if they have exercised substantial control over the manufacturing or design, have altered or modified the product, have made an express warranty inconsistent with the manufacturer's, or have failed to exercise reasonable care in assembling, inspecting, or maintaining the product, AND this contributed to the harm. A seller can also be liable even if acting merely as a conduit if the manufacturer is not identifiable, or if the seller has made misleading claims.

Who can file the Action?

A product liability action can be filed by a **consumer** (as defined in the Act) who has suffered harm due to a defective product or deficient service related to a product.

Where to File?

The action is filed before the appropriate consumer forum (District, State, or National Commission) based on the pecuniary and territorial jurisdiction. The rules for jurisdiction are the same as for other consumer complaints.

The introduction of product liability empowers consumers to directly target the responsible parties in the supply chain for compensation for injuries and losses caused by unsafe or faulty products, providing a more direct and effective remedy than was readily available under the previous legal framework.