Page 39 - The Handbook for Quality Management a Complete Guide to Operational Excellence

26 B u s i n e s s - I n t e g r a t e d Q u a l i t y S y s t e m s T h e Q u a l i t y F u n c t i o n 27

Standard of The legal theory that a person who owes a legal duty must exercise the
reasonable same care that a reasonably prudent person would observe under similar
prudence circumstances.
Strict liability The legal theory that a manufacturer of a product is liable for injuries due
in tort to product defects, without the necessity of showing negligence of the
manufacturer.
Subrogation The right of a party secondarily liable to stand in the place of the creditor
after he has made payment to the creditor and to enforce the creditor’s right
against the party primarily liable in order to obtain indemnity from him.
Tort A wrongful act or failure to exercise due care, from which a civil legal action
may result.

Table 2.2 Fundamental Legal Terminology (Continued)
state ment need not be written for the warranty to be an express war-
ranty; his mere statement of fact is sufficient. An implied warranty is a
warranty not stated by the seller, but implied by law. Certain warranties
result from the simple fact that a sale has been made. One of the most
important of the attributes guar anteed by an implied warranty is that of
fitness for normal use. The warranty is that the product is reasonably
safe.
Privity of contract means that a direct relationship exists between
two par ties, typically buyer and seller. At one time manufacturers were
not held liable for products purchased from vendors or sold to a con-
sumer through a chain of wholesalers, dealers, etc. Manufacturers
were treated as third-party assignees and said to be not in privity with
the end user. This concept began to deteriorate in 1905 when courts
began to permit lawsuits against sellers of unwholesome food, whether
or not they were negligent, and against original manufacturers,
whether or not they were in privity with the consumers. The first rec-
ognition of strict liability for an express warranty without regard to
privity was enunci ated by a Washington court in 1932 in a case involv-
ing a Ford Motor Company express warranty that their windshields
were “shatterproof.” When the windshield shattered and injured a
consumer, the court allowed the suit against Ford, ruling that even
without privity the manufacturer was respon sible for the misrepresen-
tation, even if the misrepresentation was done inno cently.
Under the rule of strict liability an innocent consumer who knows
nothing about disclaimers and the requirement of giving notice to a man-
ufacturer with whom he did not deal cannot be prevented from suing. The
rule avoids the technical limits of privity, which can create a chain of law-
suits back to the party that originally put the defective product into the
stream of commerce. The seller (whether a salesman or manufacturer) is
liable even though he has been careful in handling the product and even
if the consumer did not deal directly with him.

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