Product liability and

consumer protection
Introduction
In today’s world of heavy advertising and trade malpractices, consumers are
pushed to a risky situation. The slogan line of ‘Jago Grahak Jago’ is
applicable today. What is advertised is not what is given, consumers are
given expired products, consumers are not made aware of the dangers that
he/she can be exposed to. This affects trade and the economy as demand for
such products falls and the sale gets hampered

Who is a consumer?
In the Consumer Protection Act, 2019 there is quite a long definition of
a ‘consumer’. It is defined under section 1(7) of the Act. Reading the
definition, we can infer certain points about a consumer:

1. The consumer can either be a person who purchases/hires/avails the

goods/services respectively or a person who simply uses/takes
benefit of the goods/services respectively. The person purchasing
and using can be one single person or two different persons.
2. The one who purchases the goods should have either paid the
consideration or promised to pay the consideration or paid as well as
promised to pay part amounts or to be paid under any deferred
payment system.
3. The one who uses the goods/services will be a consumer only if he is
using the same with the approval of the purchaser/hirer of the
goods/services

4. Meaning of product liability

5. Product liability under CPA 2019 is defined as the responsibility of
either the product seller or the product manufacturer to compensate
the consumer for any harm caused because of the defective or
deficient product. A product should meet the reasonable
expectations that a consumer has regarding the quality and safety of
the product.
6. The product should be both merchantable and marketable. Any
defect in this part would bring liability on the one who sold the product
or the one who manufactured it. The consumer cannot be expected by
the seller or the manufacturer to specifically examine every aspect of
the product. It is well understood that if the price liability would fall on
 the consumer, the product liability should fall on the seller or
manufacturer.
7. CPA 2019 is the first legislation that expressly defines and
contains provisions related to product liability. It codifies the
principle of product liability concerning sale or supply of defective
products or delivery of defective services to consumers against the
product manufacturer, product service provider, product sellers,
exceptions to product liability action.

Nature of product liability law

PROVISION
There is a statutory liability on product manufacturers and product sellers
under CPA 2019 for any defective product. Moreover, such liability is strict
in nature as it can hold them liable just based on the defective product
without the consumer having to prove actual negligence.
Section 2(34) defines product liability as the responsibility of a product
manufacturer, service provider or seller of goods or services to compensate a
consumer for any harm or injury caused by a defective product or deficient
service. Chapter VI talks about “Product Liability” Section 84 provides for the
liability of a product manufacturer for any harm caused to a consumer due to a
defective product. Section 85 provides for the liability of a product seller for any
harm caused to a consumer due to a defective product if the seller knew or
ought to have known about the defect at the time of sale. Section 86 provides for
the liability of a product seller for any harm caused to a consumer due to a
deficient service.

Read more at: https://www.lawyersclubindia.com/articles/product-liability-under-

consumer-protection-act-15749.asp

Privity of contract and product

liability
Privity of contract means that no third party who is not a party to the contract
can sue. ‘Privity of contract’ is no longer a requirement to sue for
product liability– any person whom the defendant could foresee that he
would suffer from injury can sue.

To explain the nature of product liability and the concept of absence of

‘privity of contract’ we can take the case of Donoghue v. Stevenson (see
here) wherein when a drink was offered to the consumer with a decomposed
snail in it that caused health injury to the consumer, the consumer could hold
the manufacturer of the product liable even though the contract existed
between the consumer and the seller.
Types of product liability
Here, we would deal with the various types of product liability claims that a
consumer can bring against the seller or manufacturer. They can be of 4
types:

 Manufacturing defects are caused when certain products get

manufactured differently or miss any part because of defects or
negligence during the manufacturing process. Here only a few
products and not all suffer from the defect.
 In case of a design defect, the design of the product itself is wrong
thus resulting in an entire set of products that are incapable of
performing their required functions. This is a mistake caused not
during the manufacturing stage but while creating the blueprint of
the product.
 In case of marketing defects, the design and manufacture of the
product are perfect but the seller while selling the product in the
market does not give proper instructions to the consumer on how to
exactly use the product that results in the damage.
 When a claim is brought based on a breach of warranty, it is
because the product has failed to last and function properly for the
stated warranty period.

Remedy against a product

manufacturer
Section 84 under the Act states the conditions under which a consumer
can claim remedy against a product manufacturer. They are as follows:

1. There is a manufacturing defect.

2. There is a design defect.
3. There is non-confirmation to an express warranty. It does not matter
if such a warranty was made negligently or honestly.

Remedy against a product service

provider
Section 85 under the Act deals with the liabilities of a product service
provider. A product service provider is any person who gives services in
respect of a product.
A product service provider would be liable to the consumer if-

1. The service that was given in respect of the product was not of
sufficient and good quality as was required by the law that was in
force at that time or as per the contract if any.
2. There was a conscious or negligent act or omission on part of the
service provider which resulted in harm to the consumer.

Remedy against a product seller

Lastly, the consumer also has a remedy available against any liability by the
product seller. This is provided in Section 86 of the Act. The liabilities are:

1. There was an exercise of enough control by the seller in the

manufacturing, designing, testing, and labelling of the product, and
this caused harm to the consumer.
2. While selling the product, the product seller has done certain
modifications to the manufactured product and the harm caused is a
direct consequence of that.
3. There was no express warranty by the product manufacturer, but the
product seller gave an express warranty which was not me

4. Defences against product

liability claims
5. It may happen that the consumer had an ill motive in bringing up the
claim or simply that the consumer was ignorant of his/her own mistake.
In such cases, it would be wrong and unfair to hold the manufacturer or
the seller, or the product service provider liable and ask him to pay
compensation. Hence, whenever cases are adjudged not only is the law
important but the entire fact scenario. There are instances within the
conditions given in the previous chapter too where defence is available
to the opposite party if the same can be proved. Section 87 of the
Consumer Protection Act, 2019 itself points out the cases in which the
liability would be absolved. They are the exceptions to product liability
claims.
6. First of all, in case the consumer himself had modified the sold
product at the time of harm which caused the harm/injury then
the consumer cannot bring an action against the product
seller. If the consumer gets a remedy in such a case, it would be the
same as if taking advantage of one’s wrong.

7. Cases of defences available

8. There may be certain other instances also like if a consumer brings a
claim of a manufacturing defect after 30 years of using that product, it
 would be automatically rejected unless good evidence can show some
inherent defect as the product has got damaged simply because it has
worn out after long usage. A similar thing happened in the case of EID
(Parry) India Ltd. v. Baby Benjamin Tushara (see here).
9. Wherein an air conditioner had developed loud noise but was later
replaced by the manufacturer on the request of the consumer and it
was working fine the consumer could not further claim any
remedy. (see here)

10. Conclusion
11. To conclude, we can state that through the introduction of the
Consumer Protection Act, 2019 there has been an extreme and definite
shift from ‘caveat buyer’ to ‘caveat venditor’. Product liability occupies
Section 82 to 87 of the CPA, 2019. The consumer has a remedy of
claiming compensation from the seller/ manufacturer/ service provider
of the product if the product has any defect in it for which it cannot be
used or which causes injury to the consumer. They cannot say that the
consumer should have noticed the defect before buying. Product
liability claims are generally in the nature of negligence and strict
liability claims and the concept of privity of contract does not matter
here

CASE LAW.
Relevant Case Laws: The Supreme Court ruled in MC Mehta v. Union of India
(1987) that producers of dangerous chemicals have an unassailable obligation to
ensure that their products are safe for use and that they are responsible for any
damage produced as a result of those items. In the case of Nizam Institute of
Medical Science v. Prasanth S. Dhananka (2009), the Supreme Court increased
the award for medical malpractice that resulted in the paralysis of the
complainant from Rs. 15 lakhs to Rs. 1 crore. M/S Associated Cement Companies
vs Commissioner Of Customs (2001 AIR (SC) 862): After relying on the
information from the aforementioned encyclopedia, the plaintiffs developed
severe illnesses as a result of cooking and consuming mushrooms. The plaintiffs
filed a lawsuit against the publishers and demanded compensation for things like
product liability and warranty breaches.

What Is Unfair Trade Practices?

INTRODUCTION
The term trade is commonly used along with the business. Trade
generally means the commercial exchange of various goods and
services. The term business basically is an activity that provides
various goods and services that involve financial, industrial and
commercial aspects. So, the basic difference between trade and
business is that business is a larger area to discuss and can be
referred to all the activities performed by a particular business
enterprise and trade is a part of business activities.

MEANING AND DEFINITION

The term unfair trade practice as defined under Section 2(1)(r) of
the Consumer Protection Act, 1986. As per the definition
mentioned in the Act, any unfair method or practice adopted to
promote sales is known as unfair trade practices.

Unfair Trade practices are basically those practices that are

unethical, immoral and even in some cases illegal. Some of these
activities are a misrepresentation of a certain good or service,
false advertising, etc. All these types of acts are considered to be
illegal under the consumer protection law. Any harm caused to
consumers is compensated through the various remedies
available under this law.

There are various types of activities like

(a) Unfair practices: These are those practices that causes a

substantial injury to the consumers and it also cannot be avoided
by the consumers;

(b) Deceptive practices: Those practices that misleads a

consumer through false representation or omission of a certain
act. Further, there are many activities such as providing wrong or
false information about a product, not disclosing essential
information related to a product, selling the products that are not
up to the prescribed standard or quality, etc. Th

RESTRICTIVE TRADE PRACTICES: A CONCEPT TO

UNDERSTAND
The definition of restrictive trade practice is given under section
2(1) (nnn) of the Consumer Protection Act, 1986. It is defined as a
trade practice that has the capability to manipulate the price or
conditions of delivery or to affect flow of supplies in the market of
goods and services and it will affect the consumer in terms of
unjustified costs or restrictions

LAWS RELATED TO UNFAIR TRADE PRACTICES

As such there are no direct laws that can be associated with
unfair trade practices but the Consumer Protection Act, 1986
provides various remedies against unfair trade practices. Some of
the unfair trade practices are mentioned below:

1. Removing the defect from goods that were

recommended by the laboratory
2. Replacement of the damaged good with new good if all
the conditions satisfy
3. Refund to the aggrieved party in case he has suffered
any kind of loss
4. Compensation to the complainant because of the
negligence of the company
5. Discontinuing the unfair trade practice
These are some following methods to prevent unfair trade
practice:

1. Avoid misleading customers about the necessary

information regarding the product.
2. Avoid unlawful selling methods
3. Preventing use of unfair business tactics
4. Avoid false advertising
Unfair trade practices have become a very huge problem for
many nations across the world and it has to be dealt with
efficiently so that consumers can get fair products for fair prices.

In the case of Entertainment Network (India) Limited v Super Cassette

Industries Ltd, the Supreme Court of India observed that “when the owner
of a copyright exercises monopoly over it, any transaction with unreasonable
terms would amount to refusal. It is true that the copyright owner has
complete freedom to enjoy the fruits of his labour by charging royalty through
the issue of licenses. However, the right is not absolute.”
 REMEDIES AVAILABLE UNDER CONSUMER PROTECTION ACT, 1986 AGAINST
UNFAIR TRADE PRACTICES

The District Consumer Disputes Redressal Fora / State Commission /

National Commission may, as the case may be. order for following
remedies against the consumer complaint made to it:

 toremove the defect pointed out by the appropriate laboratory

from the goods in question;

 to
replace the goods with new goods of similar description which
shall be free from any defect;

 to
return to the complainant the price, or, as the case may be, the
charges paid by the complainant;

 topay such amount as may be awarded by it as compensation to

the consumer for any loss or injury suffered by the consumer due
to the negligence of the opposite party.

 to
remove the defects in goods or deficiencies in the services in
question;

 todiscontinue the unfair trade practice or the restrictive trade

practice or not to repeat it; not to offer the hazardous goods for
sale;

 to withdraw the hazardous goods from being offered for sale;