- •Commercial Law
- •Contents
- •Preface
- •Abbreviations
- •Table of Statutory Provisions
- •Table of Cases
- •1 Introduction
- •1 Introduction
- •2 What is agency?
- •3 Nature and characteristics of agency
- •4 The different types of agency
- •5 Conclusion
- •6 Recommended reading
- •1 Introduction
- •2 The authority of an agent
- •3 Agency by ratification
- •4 Agency of necessity
- •5 Conclusion
- •6 Recommended reading
- •1 Introduction
- •2 Duties of an agent
- •3 Rights of an agent
- •4 Commercial agents and principals
- •5 Disclosed agency
- •6 Undisclosed agency
- •7 Termination of agency
- •8 Recommended reading
- •Introduction
- •1 Introduction
- •2 Background
- •3 Development of the sale of goods
- •4 Equality of bargaining power: non-consumers and consumers
- •5 Impact of the European Union
- •6 Contract of sale
- •7 Contracts for non-monetary consideration
- •8 Contracts for the transfer of property or possession
- •9 Recommended reading
- •1 Introduction
- •2 Background
- •3 Sale of Goods Act 1979, section 12: the right to sell
- •4 Sale of Goods Act 1979, section 13: compliance with description
- •5 Sale of Goods Act 1979, section 14(2): satisfactory quality
- •6 Sale of Goods Act 1979, section 14(3): fitness for purpose
- •7 Sale of Goods Act 1979, section 15: sale by sample
- •8 Exclusion and limitation of liability
- •9 Acceptance
- •10 Remedies
- •11 Recommended reading
- •1 Introduction
- •2 Background to the passage of property and risk
- •3 Rules governing the passage of property
- •4 Passage of risk
- •5 The nemo dat exceptions
- •6 Delivery and payment
- •7 Remedies
- •8 Recommended reading
- •1 Introduction
- •2 Background
- •3 Provision of Services Regulations 2009
- •4 Supply of Goods and Services Act 1982
- •5 Recommended reading
- •1 Introduction
- •2 Background
- •3 Electronic Commerce (EC Directive) Regulations 2002
- •4 Distance selling
- •5 Recommended reading
- •Introduction
- •1 Introduction
- •2 CIF contracts
- •3 FOB contracts
- •4 Ex Works
- •5 FAS contracts
- •6 Conclusion
- •7 Recommended reading
- •1 Introduction and background
- •2 Structure and scope
- •3 UNIDROIT Principles of International Commercial Contracts
- •4 Conclusion
- •5 Recommended reading
- •1 Introduction and background
- •2 Open account
- •3 Bills of exchange
- •4 Documentary collections
- •5 Introduction to letters of credit
- •6 Factoring
- •7 Forfaiting
- •8 Conclusion
- •9 Recommended reading
- •1 Introduction
- •2 Hague and Hague-Visby Rules
- •3 Charterparties
- •4 Time charterparty
- •5 Common law obligations of the shipper
- •6 Common law obligations of the carrier
- •7 Bills of lading
- •8 Electronic bills of lading
- •9 Conclusion
- •10 Recommended reading
- •Introduction
- •1 Introduction
- •2 Background
- •3 Development of negligence
- •4 The move to strict liability
- •5 Types of defect
- •6 Developments in strict liability
- •7 Recommended reading
- •1 Introduction
- •2 Personnel
- •3 Meaning of ‘product’
- •4 Defectiveness
- •5 Defences
- •6 Contributory negligence
- •7 Recoverable damage
- •8 Limitations on liability
- •9 Recommended reading
- •Introduction
- •1 Introduction
- •2 Background
- •3 Enforcement strategy
- •4 Criminal law controls
- •5 Civil law enforcement
- •6 Recommended reading
- •1 Introduction
- •2 Scope of the 2008 Regulations
- •3 Prohibition against unfair commercial practices
- •4 Codes of practice
- •5 Misleading actions
- •6 Misleading omissions
- •7 Aggressive commercial practices
- •8 Commercial practices which are automatically unfair
- •9 Offences
- •10 Recommended reading
- •1 Introduction
- •2 Background
- •3 Controls over misleading advertising
- •4 Comparative advertising
- •5 Promotion of misleading or comparative advertising
- •6 Recommended reading
- •1 Introduction
- •1 Introduction
- •2 History of banking regulation: early policy initiatives
- •3 New Labour and a new policy
- •4 The Financial Services Authority
- •5 The Coalition government
- •6 Conclusion
- •7 Recommended reading
- •1 Introduction
- •2 What is a bank?
- •3 What is a customer?
- •4 Bank accounts
- •5 Cheques
- •6 Payment cards
- •7 Banker’s duty of confidentiality
- •8 Banking Conduct Regime
- •9 Payment Services Regulations 2009
- •10 Conclusion
- •11 Recommended reading
- •1 Introduction
- •2 European banking regulation
- •3 The Financial Services Authority
- •4 Financial Services Compensation Scheme
- •5 Financial Ombudsman Scheme
- •6 Financial Services and Markets Tribunal
- •7 The Bank of England
- •8 Bank insolvency
- •9 Illicit finance
- •10 Conclusion
- •11 Recommended reading
- •1 Introduction
- •1 Introduction
- •2 Evolution of the consumer credit market
- •3 Consumer debt, financial exclusion and over-indebtedness
- •4 Irresponsible lending
- •5 Regulation of irresponsible lending
- •6 Irresponsible borrowing
- •7 Ineffective legislative protection for consumers
- •8 A change of policy
- •9 Lessons from the United States
- •10 Conclusion
- •11 Recommended reading
- •1 Introduction
- •2 Crowther Committee on Consumer Credit
- •3 Consumer Credit Act 1974
- •4 Formalities
- •5 Cancellation of agreements
- •7 Documentation of credit and hire agreements
- •8 Matters arising during the currency of credit or hire agreements
- •9 Credit advertising
- •10 Credit licensing
- •11 Unfairness test
- •12 Other powers of the court
- •13 Financial Ombudsman Service
- •14 Enforcement
- •15 Consumer Credit Directive
- •16 Conclusion
- •17 Recommended reading
- •Bibliography
- •Index
305 |
3â Meaning of ‘product’ |
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own |
-brander, the injured user will opt, in all probability, to sue the own-brander |
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as being the wealthier defendant who is better placed to pay compensation. |
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Section 2(6) confirms that identifying potential defendants and placing joint |
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and several liability upon them under section 2 does not prejudice any other |
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liability that might arise from the injury. Thus, for example, if the injured user |
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is also the person who bought the goods from a retailer, his contract action will |
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subsist against the retailer even though the latter will escape liability under |
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product liability if he has identified the person from whom he acquired the rele- |
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vant goods or the producer, own-brander or first importer into the European |
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Union. Equally, actions in negligence will still exist alongside liability under |
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product liability. Hence, a producer who is negligent in the way he produces |
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goods will be liable in negligence in addition to being strictly liable under the |
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1987 Act. This may be invaluable if, for example, some of the damage cannot be |
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recovered under product liability. Thus, for example, if the injured user has suf- |
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fered personal injury and damage to business property, he will be able to claim |
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compensation for the personal injury through strict liability and for the damage |
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to business property through negligence. Naturally, the potential multiplicity of |
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legal causes of action cannot be used to gain double compensation. |
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Against this background of several alternative defendants, the European |
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Commission concluded in its report that there is no justification for introdu- |
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cing a ‘market share liability’ concept similar to that used in the United States |
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in situations such as occurred in the ‘DES daughters’ litigation. Indeed, the |
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Commission acknowledged that the use of this policy is limited.30 |
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Q2 Does the inclusion of first importers, own-branders and suppliers as potential |
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defendants in a product liability action provide a balanced approach to the pro- |
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tection of consumers? Is it reasonable to allow suppliers of the product to negate |
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their own liability by identifying their supplier? |
3â Meaning of ‘product’
The definition of a ‘product’ is clearly of central importance to liability under the 1987 Act. It is defined in section 1(1) as being ‘any goods or electricity and includes a product which is comprised in another product, whether by virtue of being a component part or raw material or otherwise’. A rider to this general statement is included in section 1(3), which provides that a person who supplies a product in which other products are comprised, either as component parts or raw materials, will not be deemed to be a supplier of those component parts or raw materials purely by virtue of his supply of the main product.
This definition differs from that contained originally in the Directive, which defined a product as meaning ‘all movables, with the exception of primary agricultural products and game, even though incorporated into another movable
30 Ibid. para. 3.2.1.
306 |
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Product Liability under the Consumer Protection Act 1987 |
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or into an immovable’. The exception for primary agricultural products was |
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removed from the Directive in 1999 as a direct response to the ‘mad cow dis- |
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ease’ (BSE) crisis in the farming industry.31 Therefore, agricultural products are |
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now included in the definition of a product and liability will ensue in respect of |
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damage caused by defective products. In practice, though, it may be very difficult |
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for a claimant to prove the causal link between his injury and the agricultural |
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product concerned. Someone contracting an illness from drinking unpasteur- |
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ised milk may find it relatively easy to establish the identity of the farmer who |
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supplied that product. However, by contrast, it would be extraordinarily difficult |
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for a claimant who has contracted variant Creutzfeldt-Jakob Disease (vCJD)32 to |
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prove the link between himself and an individual BSE-infected animal.33 |
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The Directive definition also expressly states that ‘products’ are ‘movables’, |
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a definition which clearly excludes immovables. Thus, land and buildings |
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are not included, a situation that remains unaltered following the European |
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Commission’s Report, which recommended that real property should not be |
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included within the meaning of product.34 However, it is clear that movables |
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that have been incorporated into an immovable item will be classed as products. |
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Thus, liability would arise in respect of windows, central heating systems and |
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electrical circuits if they were to prove defective and cause an injury. Electricity |
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itself is expressly included as a product.35 |
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There is no express statement that either includes or excludes blood and other |
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human products. However, in A v. National Blood Authority,36 a case concern- |
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ing a claim by 114 people who contracted Hepatitis C as a result of being given |
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infected blood during blood transfusions, it was expressly accepted that blood |
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is a product for the purposes of product liability.37 It is then a small step to argue |
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that other human organs and tissues must likewise be classed as products for |
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this purpose, with liability ensuing if the ‘products’ have not been stored or pre- |
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pared properly for a medical procedure.38 The French government introduced |
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31 |
By Directive 1999/34/EC [1999] OJ L141/20. |
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32 |
vCJD is sometimes referred to as a human form of BSE. |
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33 |
In a statement, the Spongiform Encephalopathy Advisory Committee (SEAC) reported that |
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they ‘have considered 10 cases of CJD which have occurred in people aged under 42 which |
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have recently been identified by the CJD Surveillance Unit, Edinburgh. The Committee have |
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concluded that the Unit has identified a previously unrecognised and consistent disease pattern. |
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A review of patients’ medical histories, genetic analysis to date and consideration of other possible |
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causes, such as increased ascertainment, have failed to explain these cases adequately. Although |
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there is no direct evidence of a link, on current data and in the absence of any credible alternative |
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the most likely explanation at present is that these cases are linked to exposure to BSE before the |
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introduction of the SBO ban in 1989’. |
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34 |
European Commission, Report on Directive 85/374, above n. 29, para. 3.2.8. |
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35 |
Product Liability Directive, Art. 2; Consumer Protection Act 1987, s.1(2). |
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36 |
[2001] 3 All ER 289. |
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37 |
A v. National Blood Authority is also a key decision in analysing the meaning and assessment of |
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when a product is defective for the purposes of the 1987 Act. |
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38 |
See Henning Veedfald v. Århus Amtskommune C-203/99 [2001] ECR I-3569, as discussed in |
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Howells and Weatherill, above n. 19, ch. 4, note 82. |