Product Liability Lawsuits: What If You Sold a Defective Product?
When a product causes harm, the injured party often looks for someone to hold responsible. In many cases, the manufacturer, distributor, or retailer may all share some level of liability. But what happens if you sell a defective product? Whether you’re a small business owner, an online seller, or a retail store, you could face legal consequences if the product you sold causes injury or damage.
At Bretz Injury Law, we help victims of defective products seek compensation, but we also understand that liability in these cases isn’t always straightforward. Below, we’ll explore who can be held responsible in a product liability lawsuit, the different types of product defects, and what sellers can do to protect themselves.
Understanding Product Liability: Who Can Be Held Responsible?
Product liability laws are designed to protect consumers from dangerous or defective products, but they also place legal obligations on businesses that design, manufacture, distribute, or sell goods. When a product causes harm, the injured party may pursue legal action against multiple entities involved in getting that product to market. While manufacturers are often the primary defendants in these cases, distributors, wholesalers, retailers, and even online sellers can also be held responsible under certain circumstances.
Manufacturer Liability
Manufacturers are typically the first party held liable in a product liability case because they control the design, production, and safety testing of the product. They are expected to meet industry safety standards and conduct proper testing before selling products to the public. If a manufacturer releases a product with a poor design, uses low-quality materials, or fails to provide proper warnings, they can be sued if that product causes harm to consumers.
For example, if a power tool manufacturer produces a saw with a defective safety guard, they could be held accountable if the defect leads to serious injuries. Similarly, if a car manufacturer fails to recall a vehicle with a faulty braking system, they could be sued if a crash occurs due to the defect. Manufacturers have the greatest level of responsibility in product liability cases because they control how the product is made from the beginning.
Distributor and Wholesaler Liability
Distributors and wholesalers act as intermediaries between manufacturers and retailers, moving products through the supply chain. While they do not design or manufacture products, they still have a legal duty to ensure that the goods they distribute meet safety regulations. If a distributor knowingly sells defective, expired, or recalled products, they could be held responsible for consumer injuries.
For example, if a wholesaler distributes children’s toys that contain unsafe levels of lead, and those toys cause harm, the wholesaler could be sued alongside the manufacturer. Additionally, if a distributor continues selling faulty medical devices after receiving a recall notice, they could
also face liability for any injuries that result.
Retailer and Seller Liability
Retailers, including brick-and-mortar stores and online sellers, may also be held liable if they sell a defective product. Even though they did not manufacture the item, they still have a responsibility to ensure the products they sell are safe.
Retailers can be held liable in several situations. If they knowingly sell a recalled or defective product, they may be considered negligent. If they alter the product in a way that makes it dangerous, such as removing safety instructions or repackaging it without warnings, they could be held responsible. Additionally, if they fail to pull a known dangerous product from shelves after being informed of the risks, they could also be sued.
For example, if a store continues selling a brand of pressure cookers known to explode, even after receiving consumer complaints and recall notices, they could be held accountable for injuries caused by those defective products.
Online Sellers and Marketplace Liability
The rise of online marketplaces like Amazon, eBay, and Etsy has made product liability cases more complex. Traditionally, these platforms only served as facilitators between buyers and third-party sellers. However, recent court rulings have increasingly held online marketplaces responsible for defective products sold on their platforms, even if they did not manufacture or physically handle the goods.
For example, if a third-party seller on Amazon lists a defective lithium-ion battery that later overheats and causes a fire, the injured party may be able to sue Amazon, arguing that the platform played a role in enabling the sale of a dangerous product. Some courts have ruled that online platforms must take reasonable steps to prevent defective products from reaching consumers, such as enforcing strict seller policies and removing hazardous listings.
Understanding Your Liability as a Seller
If you sell physical products — whether in a store, online, or through a third-party marketplace — you could be drawn into a product liability lawsuit if that product is found to be defective. The key factor in determining liability is whether you knew or should have known about the defect and whether your actions (or inactions) contributed to the consumer’s injury.
Taking proactive measures, such as researching manufacturers, keeping detailed sales records, responding to recalls, and obtaining liability insurance, can help reduce your risk of being held responsible. If you have been named in a product liability lawsuit, consulting with an experienced attorney can help you understand your legal options and build a strong defense.
Types of Product Defects That Can Lead to Lawsuits
Not all defective products are the result of careless sellers or retailers — many issues stem from problems with design, manufacturing, or labeling. Understanding these categories can help you determine whether you might be liable for selling a defective product.
Defective Design
Some products are inherently dangerous because of flaws in their design, even before they are manufactured. These defects affect entire product lines, meaning every item produced with the same design carries the same risk. Examples include unstable furniture prone to tipping over, vehicles with a high risk of rollovers, or power tools with inadequate safety features. If you sell a product with a defective design, you could be held liable if you knew — or should have known — that the product posed a danger to consumers.
Manufacturing Defects
A manufacturing defect occurs when a product is properly designed but something goes wrong during production, making it dangerous. These defects may only affect certain batches of a product rather than the entire product line. Examples include contaminated food products, medical devices assembled with faulty parts, or toys with missing safety components.
Retailers and resellers can be held liable if they continue selling products they know have manufacturing defects, especially if there has been a recall or prior consumer complaints.
Failure to Warn or Provide Instructions
Even if a product is properly designed and manufactured, it can still be considered defective if it lacks necessary warnings or instructions. Companies have a duty to warn consumers about potential hazards and risks that may not be obvious.
Examples include medications without clear dosage instructions, electronics that can overheat without warning, or cleaning products that lack proper safety precautions. If you sold a product without required warnings or safety labels, you could be held responsible for injuries caused by consumer misuse that could have been prevented.
How to Protect Yourself If You Sell Products
If you sell physical products, whether in a brick-and-mortar store, online marketplace, or as a third-party reseller, you could face liability if a product you sell causes injury or harm. Even if you were not involved in designing or manufacturing the item, retailers and resellers can still be sued under product liability laws. Taking preventative steps can help you reduce risk and protect your business from potential lawsuits.
Only Work With Reputable Manufacturers and Suppliers
One of the most effective ways to protect yourself is by carefully selecting the manufacturers and suppliers you work with. Before selling a product, research the company’s safety history, recall record, and compliance with industry regulations.
Many manufacturers provide certifications or testing reports to demonstrate that their products meet safety standards — requesting these documents can help verify that you are selling safe and legally compliant items. Avoid working with unverified or unregulated suppliers, especially those that lack a history of compliance with safety regulations.
Keep Detailed Records of Product Purchases and Sales
If a defective product leads to a lawsuit, accurate documentation can help determine who is responsible in the supply chain. Keeping detailed records of all purchases and sales will help prove where and when you obtained a product. Your records should include purchase invoices, receipts from suppliers, any product safety certifications, and recall notices received from the manufacturer.
Having this documentation can protect you if a lawsuit arises by showing that you were unaware of any defects or that the product was already defective before it reached your business. Without proper records, proving your role in the supply chain can be difficult, potentially increasing your liability in a lawsuit.
Respond Quickly to Recalls and Safety Alerts
If a product you sell has been recalled or identified as defective, it is critical to take immediate action to prevent consumer injuries. Removing the product from shelves or online listings should be your first step. In addition, notifying customers who purchased the item and providing instructions on how they can return or dispose of the product safely is often necessary.
Following recall procedures established by the manufacturer or government regulatory agencies ensures that you are handling the situation responsibly. Failing to act on a known safety risk could increase your liability, as courts may view inaction as negligence. The faster you respond to recalls and safety concerns, the better you can protect both consumers and your business.
Consider Liability Insurance
For businesses that sell products in any capacity, having product liability insurance can be a crucial safeguard against legal and financial risk. This type of insurance helps cover legal fees, settlements, and damage awards in cases where a consumer claims that a product you sold caused them harm. Even if you did not manufacture the product, a lawsuit could cost thousands — or even millions — of dollars in legal expenses.
Small business owners and online sellers often assume they don’t need liability insurance, but even a single lawsuit could be enough to put a company out of business. Investing in insurance coverage can provide peace of mind and financial protection, ensuring that one defective product does not jeopardize your entire business.
What to Do If You Are Named in a Product Liability Lawsuit
If you are facing a product liability lawsuit, taking the right steps early can make the difference between resolving the case efficiently or facing severe financial and legal consequences. Even if you only sold the product and did not manufacture it, you may still be drawn into litigation. Acting quickly can help protect your business, finances, and reputation.
Gather Documentation
The first step in defending yourself is collecting all relevant records related to the product in question. This includes purchase orders, invoices, receipts, product descriptions, and correspondence with manufacturers, distributors, and suppliers. If you have emails or notices about recalls, safety concerns, or past complaints, these should also be provided to your attorney. Having detailed documentation may help prove that you had no prior knowledge of the defect or that responsibility lies with another party in the supply chain.
Do Not Admit Fault
It can be tempting to try to resolve the issue quickly by offering a refund, replacement, or compensation. However, admitting fault too soon can damage your defense and be used against you in court. Product liability cases are complicated and often require a thorough investigation to determine who is actually responsible — whether it is the manufacturer, distributor, retailer, or another party. Instead of making statements that could increase your liability, allow your attorney to handle all communications related to the lawsuit.
Consult an Attorney Immediately
Product liability laws are highly technical, and defending against a lawsuit requires strategic legal representation. An attorney will review the details of your case, examine liability issues, and develop a defense strategy to protect your business. They may also negotiate with the other parties involved, helping you avoid costly litigation or limit your financial exposure.
If you are a small business owner or online seller, defending against a product liability claim can feel overwhelming. However, with the right legal guidance, you may be able to prove that you were not responsible or that another party should bear the costs of the claim. Acting swiftly and securing an experienced lawyer will give you the best chance at a favorable outcome.
Selling Products Comes With Responsibilities
If you sell physical products, you could be held legally responsible for any harm they cause. While manufacturers are often the primary defendants in product liability cases, retailers and resellers are not immune from lawsuits. By taking preventative measures — such as sourcing products carefully, keeping detailed records, and responding to recalls — you can reduce your risk of legal action.
If you have been injured by a defective product, or if you are a business facing a product liability lawsuit, contact Bretz Injury Law at 620-RESULTS or reach out to us online for a free consultation. Our team can help you understand your rights, navigate complex liability laws, and fight for the best possible outcome.
