Chain of Distribution in a Defective Products Claim

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 What is the Chain of Distribution in a Defective Products Claim?

In general, the phrase “chain of distribution” can be defined as the series of businesses or companies that are involved in the process of how a product gets from its original creator to its final destination, a consumer or customer. 

Briefly, the difference between a consumer and a customer is that a customer is the person who purchases the products or services, whereas a consumer is the person who actually uses the products or services. For instance, imagine when a parent buys their child a toy. The parent is the customer in this scenario and the child is the targeted consumer. 

On the other hand, the chain of distribution in the above example would involve the different intermediaries (i.e., not the consumers) that the toy must pass through to get to that child, such as the toy’s designer, manufacturer, distributor, wholesaler, and/or retailer. 

Customers are a tricky component to label in the chain of distribution because they can sometimes be the consumer or they might be a retail or wholesale company that buys the product or service for resale purposes.

As a product travels through its chain of distribution, there is a possibility that it can become defective in some way due to the negligence of one of the parties within the chain. This is why there may be more than one party who can be held liable for a plaintiff’s injuries in a defective products lawsuit. 

This is also why it is often so difficult to prove which of those parties in the chain of distribution is in fact responsible for the defective product since it passes through several different intermediaries on its way to the consumer. It should be noted, however, that a chain of distribution is deemed to be broken if the product or service is sold indirectly, such as through a grey market transaction.  

Therefore, if you have been harmed by a defective product or are being sued for a defective products claim, then it may be in your best interest to hire a local personal injury lawyer for further assistance. 

A lawyer can help you figure out which of the parties in the chain of distribution is responsible for your injury, or alternatively, can advocate on your behalf for why you should be dismissed from the lawsuit and not held liable for the plaintiff’s resulting injuries. 

Who Can Be Sued in the Chain of Distribution?

As previously mentioned, when a products liability lawsuit arises, there is often a chance that the cause of the plaintiff’s injury may be connected to one or more of the parties within the chain of distribution. Again, the chain of distribution may refer to the following entities:

  • Designers: The chain of distribution typically starts with a designer. The designer is the original creator of the product or service and can be an individual, small business, or large corporation. It should be noted that a designer may be the same party as a manufacturer, but if it is not, then both parties must be named in the lawsuit.
  • Distributors: Distributors tend to work closely with manufacturers. They are typically the link that sits between the manufacturer and the wholesaler or retailer in the chain of distribution. Distributors are rarely responsible for selling to consumers. Instead, they may store and ship the product for resale by a wholesale or retail store. Additionally, in some cases a distributor may also be a wholesaler. 
  • Manufacturers: As briefly discussed under the designer section, a manufacturer may be the starting point in the chain of distribution. If there is also a designer, then the manufacturer will be the second link in that chain. Manufacturers can be large or small businesses and may create the entire product or only part of it. It is crucial that a plaintiff name all manufacturers involved in the product’s creation.
    • For instance, if there are other designers or manufacturers who create parts of the whole product, then those other parties must be named in the lawsuit. For example, a major technology company may design a laptop, but they may outsource the work of who makes the battery for that laptop. 
  • Retailers: A retailer is normally where a customer or consumer buys the product from a store owner. Retailers can be held liable in a defective products liability lawsuit if they knowingly sold a defective product or failed to move items that were recalled from their shelves and inventory. Retailers are usually the last link in the chain of distribution. 
  • Wholesalers: As mentioned, a wholesaler can also be a distributor. When they are not, then a distributor will ship the product to a wholesaler for resale purposes. Wholesalers will then turn around and ship the product to retail stores when a retailer places an order.
    • This part of the chain can also work in reverse where a manufacturer sends the product for storage in a warehouse owned by a wholesaler who will then hire a distributor to ship the product to retail stores. Regardless, all of the parties in this chain can be held liable in a defective products liability lawsuit.

As such, it is possible for multiple parties to be named as a defendant in a defective products lawsuit since more than one party may have been responsible for causing harm to the injured party. 

If this type of situation should occur, it may be in all of the parties’ best interests to retain their own set of counsel because proving causation in such a lawsuit can be difficult. A lawyer can also assist in hiring an expert witness to testify against a liability claim, which is what usually needs to be done in order to be released from liability. 

How is Liability Divided if Different Parties are Responsible?

There are some instances where a defective products claim may assign legal responsibility to more than one party. If liability is divided among different parties in a lawsuit, then the laws of the state where the harm occurred will control how liability is apportioned. 

For instance, some states require that a defendant party only pay for the percentage of damages for which they are liable. As an example, suppose that there are two defendants to a lawsuit and one of them is 75% liable, while the other is only 25% liable. Under a state with this percentage requirement, the first defendant would then have to pay 75% of the damages and the second would need to pay the remaining 25% for which they are responsible. 

In states without this requirement, it may be up to the defendants as a collective whole to determine how much each of them will pay, no matter their individual liability. 

Regardless of how liability is distributed, however, it should not have an effect on the total amount that the injured party is to receive. In other words, the injured party will need to be fully compensated, but in dividing liability, it is just a matter of how much each of the defendants will have to contribute.

Do I Need a Lawyer if I Have Issues with a Defective Products Claim?

The chain of distribution in a defective products claim is a very important aspect of these kinds of lawsuits. Oftentimes, it can be difficult to determine exactly which parties in the chain are responsible for the defective product. 

Thus, if you are a designer, distributor, manufacturer, retailer, and/or wholesaler who is being sued for a defective products liability claim, then you should contact a local defective product lawyer immediately. 

An experienced defective product lawyer will be able to determine whether there are any defenses that you can raise against the defective product liability claim, can help you to protect your rights under the law, and can represent you in court if necessary. In addition, your lawyer can also assist you in tracing and suing another party who may actually be the one that is responsible for your losses.

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