Suppose a contractor installs a fire protection system that had a faulty design or was manufactured with a defective component, such as a sprinkler head. Can the contractor be liable to the end user? The answer is that it depends. While a contractor typically comprehends that it can be liable if it did something incorrectly, strict liability law can make a contractor liable even if it fully complied with its duties under the applicable contracts, and even if it did not act negligently. That possibility is the focus of this article.
Product liability laws were created to protect consumers and initially applied to manufacturers because they are deemed to be in the best position to discover dangerous product defects and determine how to correct them. In some states, these laws have expanded into realms not typically associated with consumers or manufacturers. In most states, contractors are not immune.
Of course, proving that a product caused the plaintiff's injuries is an essential element of all product liability claims, whether the plaintiff is proceeding under a strict liability or negligence theory. That proof is usually a technical issue. Typically the claimant must prove that its loss or injury was proximately caused by a defective product, but proving the link between the defect and the plaintiff’s damages is not enough.
In many states, such as Georgia, actions for strict liability can be brought only against the manufacturer of a product. In Georgia, an entity is a manufacturer if it (1) actually designs or manufactures the product, (2) is a manufacturer of a component part that failed and caused injury to the plaintiff or (3) is an assembler of component parts who sells the assembled product as a single item under its own trade name. These definitions are somewhat broad, but Georgia courts have narrowed them and have held that the strict liability statute applies only to actual manufacturers -- entities that have an active role in the production, design, or assembly of products and placing them in the stream of commerce.
Other states, such as South Carolina, have statutes that are more expansive. They make any seller of any unreasonably dangerous product subject to liability for physical harm caused to the ultimate user or consumer, or to her property. This applies if the “Seller” is engaged in the business of selling such a product, and the product is expected to and does reach the user or consumer without substantial change in the condition in which it is sold. In the example provided above, the contractor who installed a defective fire protection system could be liable strictly if the contractor sold the defective sprinkler head.