Internet Application Liability for internet manufacturers is basically the same as non-internet companies. Manufacturing in general has evolved into a high tech, international business, and use of the internet has merely replaced telephone and fax as a high speed method of doing business in certain areas. One problem with strict internet use is the potential lack of face to face communication that affords a potential business to assess the physical capabilities of the new internet style supplier. In the computer industry, many components are manufactured by different manufacturers, then assembled by a final entity, who may put labels on the final product for other businesses. When a single component fails in an assembled product, the manufacturers of all the successful components should not bear the cost of a strict liability case against a single defective component.
Some companies simply combine parts from other manufacturers for sale.
See Step-Saver v. In Step-Saver , the one component manufacturer attempted to bring a breach of the implied warranty of merchantability against a manufacturer of terminals. Here the value-added package was decided to be the cause of the conflict, the terminal was shown to conform to industry standards, therefor no breach by the terminal manufacturer. Software is a product. The court found the boxtop warranty disclaimers ineffective based on other contract actions of the parties, but most reporters believe that boxtop licenses will not be supported by the courts as a liability limiting device in the future.