When Are Third-Party Sellers Liable for Defective Products?

| Jan 1, 2021 | Product Liability

Defective products have the potential to cause significant damages. When this happens, various parties may be liable. However, the matter can be far more complicated than people think, particularly when it comes to third-party sellers.

Even the courts do not agree on liability. Similar cases across the country have had very different outcomes when determining whether a party can be liable for a defective product from a third party.

The Cases Against Amazon

As an example of how complex this issue can be, we can look at the numerous cases against Amazon attempting to hold the e-commerce retailer responsible for defective products purchased on their platform.

The cases involve parties claiming that they were injured due to defective products they bought on Amazon. However, different jurisdictions have reached varied conclusions when it comes to the question of whether or not the retailer is liable.

In California, an appeals court ruled that, yes, Amazon can be responsible for injuries from products sold by third parties in its Marketplace.

In other states, courts have determined that liability depends on the level of control over the product. Amazon does not fulfill every order from its Marketplace, meaning it does not sell, process, or ship the order. According to courts in some states, under these circumstances, the company may not have the level of control over the product required for it to be liable.

Whether a company like Amazon is liable for defective products or not has a tremendous outcome when determining who is financially responsible for a product defect.

What This Means for Other Companies

These cases highlight the fact that liability for allegedly defective products can be a highly nuanced legal issue. Parties cited in a lawsuit may not be legally responsible for damages, or there could be other parties carrying liability that reduce the financial obligation on a single company. And there is often a lot at stake in these claims, as the potential for damages can be significant when people experience injuries when using a product.

Given the fact that product liability matters can be costly and time-consuming, consulting experienced legal counsel is of critical importance.