The various tort rules that determine which foreseeable losses are recoverable aim, in part, to provide appropriate safe product incentives. And a liability rule that diminishes liability simply because of some such resale is a rule that, other things being equal, diminishes that basic incentive. That circumstance requires a justification. Peterson v. Idaho First Nat. No court has thought that the mere possibility of such a contract term precluded tort recovery for damage to an Initial User's other property.
Respondents make two other important arguments.
First, they say that our reasoning proves too much. They argue that, if a Subsequent User can recover for damage a defective manufactured product causes to property added by the Initial User, then a user might recover for damage a defective component causes the manufactured product, other than the component itself. Saratoga Fishing, for example, could recover the damage the defective hydraulic system caused to any other part of the ship. Our holding here, however, does not affect this rule, for the relevant relations among initial users, manufacturers, and component suppliers are typically different from those at issue here. Initial users when they buy typically depend upon, and likely seek warranties that depend upon, a manufacturer's primary business skill, namely the assembly of workable product components into a marketable whole.