Products liability is an outgrowth of shortcomings in both contract law and negligence law. This means that third parties injured by a product usually cannot sue for breach of contract because they are not one of the contracting parties. Until recently, third parties who had been injured by a product were required to prove that the manufacturer of the product was negligent. Proving that an automobile manufacturer in Michigan was negligent is difficult for an injured consumer in California or New Jersey. Products liability law was born from these inadequacies in contract law and negligence law.
Product liability is applicable to sellers of defective products to consumers.
The important difference between negligence and products liability claims is that the former focuses on the behavior of those who created the product or placed it in the hands of the user whereas the latter focuses on the product itself. Thus, while a negligence claim would involve proving that a product was put into the stream of commerce despite unreasonable risks of harm from it that should have been anticipated at the time of production, a products liability claim would involve proving that the product was defective, regardless of whether or not the seller exercised all possible care. One popular definition is a product that fails to live up to the reasonable expectations of the user. It is this variable deviation from the original concept of strict liability from state to state that is responsible for the uncertainty sellers and their insurers face in products liability litigation. A product may be defective due to an error during its manufacture which causes it to be different from what was intended.