The goWholesale Blog
Ignorance is NOT Bliss…When it Comes to Product Defects
March 6th, 2008
Here’s some pretty important news straight from the National Association of Wholesaler-Distributors. Usually the manufacturer is held liable for product defects but in some cases, the wholesaler can be held liable as well/instead.
Here are some of the specific circumstances where the wholesaler-distributer can be held liable:
- Some wholesaler-distributors provide installation, service or repair work as a “value-added” for their customers, which may increase their product liability exposure in the process.
- Wholesaler-distributors that modify, repackage or re-label products may assume a greater liability than those who don’t. Modification of the product can include any modification of instructions or warranties.
- Repackaging under the wholesaler-distributor’s name may increase the exposure substantially.
- The United States has some of the most stringent product safety standards in the world. When goods are produced overseas, they do not necessarily comply with these standards. When a wholesaler-distributor imports products from a foreign manufacturer who does not carry U.S. product liability coverage, they can assume the product liability exposure.
- If the manufacturer is insolvent or otherwise unavailable (foreign manufacturers with no coverage inside the U.S. for example) the wholesaler-distributor can be held liable for any defect in the product.
- When the wholesaler-distributor is directly responsible for the defective condition, i.e. if they have damaged the product while repackaging, or by making product modifications, they may be held liable for product liability.
- If a wholesaler-distributor had knowledge of the defective condition prior to the sale and did nothing, they can be held accountable.
- If a wholesaler-distributor recommended an unsuitable product for the job they may be liable
Be sure you are aware of any instances where you could be held liable for the wholesale products you sell. Any lawyer will tell you that “ignorance is no defense.”
Posted in Product Sourcing |
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