Product Liability & Negligent Misrepresentation

Product Liability

A person buying a defective product in Canada has rights that are protected by a provincial Sale of Goods Act. Each Act states that there is a contract between the producer and purchaser and that the product should be reasonably fit for its intended purpose.

There is also the situation where a person uses but who did not purchase a product – and therefore has no contractual arrangement with the original supplier – but who is also adversely affected by the defective item. There are therefore broader implications for manufacturers in terms of who might reasonably be affected by a faulty product beyond the original purchaser.

Again, the plaintiff has to prove negligence to in order to win a tort action.

Negligent Misrepresentation

Misrepresentation is defined as a false statement or conduct which induces another party to enter into a contract. This mis-statement could be intentional – in other words fraudulent – or careless, where an individual makes a representation without having a reasonable basis to know that it is true. In either case, an affected party can sue in a tort action.

For negligent misrepresentation to take place, there must be:

  • an untrue statement;
  • it must have been made negligently;
  • there must be a special relationship giving rise to a duty of care; and
  • there must be reliance on the false information provided which is foreseeable.