Product Damage in the Convention on Law Applicable to Products Liability

Article 1

This is the basic article concerned with the scope, or field of application, of the Convention. It provides that, subject to one exception, the Convention shall determine ‘the law applicable to the liability of the manufacturers and other persons specified in article 3 (see below) for damage caused by a productÂ’. This article must be read with article 2, which defines the words ‘productÂ’, ‘damageÂ’, and ‘personÂ’, and with article 3 which lists the categories of persons who may be held liable under the Convention.

This article speaks without limitation of ‘damage caused by a productÂ’ and accordingly makes clear that the Convention is intended to have a broad scope of application. The Convention is not limited to damage resulting from a defective product. It applies also to damage resulting from ‘a mis-description of the productÂ’, whether fraudulent, negligent or innocent, or from ‘a failure to give adequate noticeÂ’ of the ‘qualitiesÂ’ of the product or of ‘its characteristics or its method of useÂ’.

The exception referred to above, and which is set forth in the second paragraph of the article, is that where ‘the property in, or the right to use, the product was transferred to the person suffering damage by the person claimed to be liableÂ’, the Convention shall not apply to their liability inter se. It was felt that situations of this sort are adequately handled by existing law and that to disturb this existing law might lessen the chances for widespread adoption of the Convention. Likewise, some delegations felt that, since the contract leading to the acquisition would in most cases be a contract of sale, all possible conflicts with the Hague Convention of June 15, 1955 relating to the law applicable to the sale of goods should be avoided.

It will be noted that this exclusionary phrase does not contain such terms as ‘contractual claimsÂ’ or ‘contractual relationsÂ’. These terms were avoided because the word ‘contractÂ’ bears somewhat different spheres of application in different legal systems. Instead, it seemed preferable to describe in non-legal terms the situations that one intended to exclude.

Of course Contracting States remain free to adopt whatever conflicts rules they may prefer for cases excepted from the ConventionÂ’s scope. They are, therefore, free to apply the rules laid down in the Convention even to these excepted cases. It will be noted that in the second paragraph of article 1 the reference is to ‘the person suffering damageÂ’ while in those articles of the Convention that are concerned with the choice of the applicable law the reference is to ‘the person directly suffering damageÂ’. The former term refers to the person who is seeking recovery for the damage he has suffered in a products liability case. The latter term refers to the person who was the first to suffer damage, either to his person or to his property or by way of economic (out-of-pocket) loss. In a given case, these two persons might, or might not, be the same. Only ‘the person directly suffering damageÂ’ is given significance when it comes to the choice of the applicable law. So it is his habitual residence and the place where he acquired the product that are mentioned as important contacts in articles 4-7 (of the Convention).

An example will make this point clear. Let us suppose that a son, who resides in State X, purchases a defective automobile in that State. Unaware of the defect, he loans the automobile to his father in State Y, where the latter resides, and the father sustains physical injury in State Y by reason of the defect. Under articles 4 and 5, Y is the State of the applicable law irrespective of whether it is the son or the father who is seeking to recover damages from the manufacturer of the automobile. The situation would be different if the claimantÂ’s habitual residence and the place where the claimant acquired the product were given significance under
the Convention. In such a case, X would be the State of the applicable law in an action brought by the son and Y the State of the applicable law in an action by the father.

On the other hand, it is essential for reasons stated above that the reference in the second paragraph of article 1 be to ‘the person suffering damageÂ’. So, for example, in the hypothetical situation stated above, any action that the father might bring against the dealer from whom the son purchased the automobile would be regulated by the Convention. On the other hand, an action by the son against the dealer to recover for the loss he had incurred by reason of the injuries suffered by the father would not be covered.

The third paragraph of article 1 provides that the ‘Convention shall apply irrespective of the nature of the proceedingsÂ’. This language was inserted to make clear that the Convention also applies in situations where the claim for damages is made in proceedings that are essentially criminal or administrative in character.

Article 2

This article provides definitions for three important words used throughout the Convention: product, damage and person.

‘ProductÂ’ is given a broad meaning, since it is said to include ‘natural and industrial products, whether new or manufactured and whether movable or immovableÂ’. The Convention thus applies to all products in their raw state and to all products that have been manufactured or in any way changed by the hand of man.

The Convention likewise applies to all component parts as well as to finished products As stated in article 16, a Contracting State may reserve the right not to apply the Convention to raw agricultural products.
‘DamageÂ’ is given a broad meaning, since, subject to one exception, it covers personal injuries, damage to tangible property as well as economic loss. The exception is that ‘damage to the product itself and the consequential economic loss shall be excluded unless associated with other damageÂ’. This ‘other damageÂ’ may, but need not, be suffered by the one who is harmed by the ‘damage to the product itselfÂ’.

The effect and scope of this limitation can best be illustrated by two hypothetical examples. Suppose that by reason of a defect in its manufacture an automobile breaks down during the course of a business trip and that as a result the owner incurs expense in repairing the automobile and also loses a valuable contract by reason of his inability to get to a certain place on time. In such a case, the Convention would not regulate any right the owner might have against the manufacturer to recover the cost of repairing the automobile, since this economic
loss was only ‘consequentialÂ’ to the ‘damage to the product (the automobile) itselfÂ’. Nor would the Convention cover the right of the owner to recover for the lost contract, since this too was an economic loss ‘consequentialÂ’ to the damage to the automobile.

If, however, the owner sustained even a slight personal injury by reason of the breakdown, the Convention would cover his right to recover from the manufacturer damages for his personal injury, for his cost of repairing the automobile and for his lost contract. For in this latter situation, ‘damage to the product itself and the consequential economic lossÂ’ would be ‘associated with other damageÂ’.

Similarly, if by reason of the defect the automobile had crashed into a wall and if as a result both the automobile and the wall had sustained damage, the Convention would cover the rights against the manufacturer of the respective owners of the automobile and of the wall. For in this case likewise, ‘damage to the product (the automobile) itselfÂ’ was ‘associated with other damageÂ’.

The justification for the solution reached by the Convention on this particular point seems obvious. In situations where damage to the product itself is associated with other damage, claims to recover for the ‘other damageÂ’ would be regulated by the Convention. This being so, it is appropriate in these circumstances to have the Convention also regulate claims to recover for damage to the product itself. The Convention would thus regulate all the claims involved in the case.

It should perhaps be added that the question whether the Convention should cover damage to the product itself and, if so, under what circumstance was the subject of lengthy discussions during the course of the Conference.
‘Person’ is also given a broad meaning and is said to refer to both natural and legal persons, such as corporations, business associations and partnerships.

Article 3

This article lists the categories of persons whose liability for damage caused by a product is covered by the Convention The language of the article makes clear that it is all-inclusive. That is to say, persons, such as transporters, who do not fall within any of the listed categories are not covered by the Convention.

In general, it can be said that the Convention applies to the liability of all persons, other than transporters, who are engaged in the commercial chain of preparation or distribution of a product. So the Convention applies to all manufacturers of a finished product or of a component part of the product, to all assemblers of a product, to all producers of a natural product and to all suppliers of a product, whether natural or man-made. The word ‘suppliersÂ’ is intended to be understood in a broad sense. It covers all vendors, bailors and lessors of a product. It likewise covers anyone who furnishes a sample of a product to another with the hope that the other will be induced as a result to acquire similar products.

The Convention also covers the liability of persons who are gratuitous transferors of possession to any kind of product, whether manufactured or natural. As already noted, the Convention speaks without limitation of ‘suppliers of a productÂ’. As a consequence, it clearly covers all donors of a product and all who gratuitously give temporary possession of a product to another.

On the other hand, as stated in the second paragraph of article 1, the Convention does not cover any claims that a person may have against one who transferred to him the product or the right to use the product.

Repairers and warehousemen are covered by the Convention in situations, and only in situations, where they are involved ‘in the commercial chain of preparation or distribution of a productÂ’. So, for example, the Convention covers the liability of an automobile dealer to the person to whom he sells an automobile for repairs negligently made to the automobile either prior, or subsequent, to its sale. On the other hand, the Convention does not cover the liability of a garageman for negligent repairs to an automobile to a person to whom he neither sold nor leased it.

Similarly, a warehouseman who stores a product prior to its sale to the ultimate purchaser is covered by the Convention. But this is not true of a warehouseman with whom the ultimate purchaser stores the product after having purchased it.

Finally, the Convention is explicitly made to apply to the liability of the agents or employees of the persons whose liability it regulates. [1]

The Legal History of Damage (_arar)

This section provides an overview of Damage (_arar)


See Also

  • International Environmental Law
  • Environmental Law Violations
  • Pollution
  • Environmental Law
  • Environmental Policy
  • Disaster


Notes and References

  1. Explanatory Report by W.L.M. Reese, Actes et Documents, Douzième session (1972) Tome I, Institute of International Law

See Also

  • Legal Biography
  • Legal Traditions
  • Historical Laws
  • History of Law

Further Reading

Hierarchical Display of Damage

Law > Civil law > Civil law > Liability
Law > Justice > Legal action > Criminal proceedings > Associated action for damages
Finance > Insurance > Insurance > Indemnity insurance


Concept of Damage

See the dictionary definition of Damage.

Characteristics of Damage

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Translation of Damage

Thesaurus of Damage

Law > Civil law > Civil law > Liability > Damage
Law > Justice > Legal action > Criminal proceedings > Associated action for damages > Damage
Finance > Insurance > Insurance > Indemnity insurance > Damage

See also

  • Material damage