Products liability law in North Carolina is primarily governed by statute, specifically by Chapter 99B of the North Carolina General Statutes, which begins by confirming that North Carolina does not adhere to the strict liability standard in products liability cases, as do most other states.
Chapter 99B also addresses the different types of products liability claims that are recognized in North Carolina, all of which are generally premised on a negligence standard:
- Inadequate Design – A manufacturer is liable for inadequate design if the manufacturer acted unreasonably in designing the product and the unreasonable design proximately caused the claimant’s damages. A product design is unreasonable if the manufacturer failed to adopt a feasible and safer alternative design that would have reduced the risk of harm without impairing the usefulness of the product. A design is also unreasonable if no reasonable person having full knowledge would use the product. However, there is no liability if the product is inherently hazardous and such hazard cannot be eliminated without compromising the utility of the product.
- Failure to Warn – Liability for inadequate warning/instruction exists if (1) the manufacturer/seller acted unreasonably in failing to provide warning or instruction; and (2) the unreasonably inadequate warning/instruction proximately caused damages to the claimant. A manufacturer/seller acts unreasonably if it either (1) failed to warn/instruct despite knowledge of a danger before the product left its control or (2) discovered a hazard after the product left its control and failed to take reasonable corrective action. However, there is no liability for failure to warn if the hazard is open and obvious or a matter of common knowledge.
- Breach of Warranty – Although not expressly addressed, Chapter 99B clarifies that it does not preclude products liability actions for breach of warranty. Accordingly, North Carolina claimants are entitled to bring claims for breach of express or implied warranties. However, Chapter 99B affirmatively states that breach of warranty claims are subject to the defenses set forth in § 99B (see below). Chapter 99B also clarifies that an end user may bring a breach of implied warranty claim against a manufacturer even though there is no privity between the manufacturer and end user.
Chapter 99B also lays out various defenses to products liability claims:
- Contributory Negligence – A claimant’s contributory negligence is a complete bar to recovery in any products liability action (in the absence of gross negligence on the part of the manufacturer).
- Sealed Container Defense – Product sellers are not liable if the seller acquired and sold the product in a sealed container or if the seller otherwise had no opportunity to inspect the product unless the seller mishandled or damaged the product.
- Product Alteration or Modification – Manufacturers and sellers of products are not liable where a product was altered or modified after the product left the possession of the manufacturer or seller if the alteration or modification was a proximate cause of the loss.