Javeria Naz

BBC-08-59

6.4 The Social Costs View of

manufacturers Duties
Obligations of manufacturer
Strict Liability
critics of social Cost View
Advertising Debts (case study)

Social Cost View

The manufacturer pay the costs of any

injuries sustained through any defects in
the product, even when the manufacturer
exercised all due cares in the design and
manufacture of the product & has taken all
reasonable precautions to warn users of
every foreseen danger.

According to this theory, a manufacturer

has a duty to assume the risks of even
those injuries that arises out of defects in
the product that no one can reasonably
have foreseen or eliminated the defect

Strict Liability

A legal doctrine that holds that

manufacturer bear the cost of injuries
resulting from product defects regardless
of faults.

Utilitarian argument

They argue that manufacturer bears

external cost result from the injuries as
well as the ordinary internal costs of
design & manufacture , all the cost are
internalized and added on to the price of
product, sorting out 2 problems

No Overproduction
Resources are not wasted on it
(if some cost is not added producer will
produce more than needed)
2. Reduce accidents by increase in care
3. Internalizing the cost of injury in this way
to enables the manufacturer to distribute
the cost among all of the user in stead of
any single individual
1.

Agenda of Utilitarian

Value of efficiency: The theory assumes

that an efficient use of resources is so
important for society that social costs
should be allocated to whatever way will
lead to more efficient use & care of our
resources.

Critics of theory
1.
2.
3.

Compensatory justice (producer will only

compensate risk which is foreseeable)
Increase level of carelessness of
consumer
Increased cost by many of law suits o
Strict Liability will generate problem for
insurance companies forcing many
valuable firms out of business

Arguments against Critics

In reality cost of consumer liability suits
are not so large. Less than 1% of product
related injuries result in suits.
Consumer accountability can never
abolish because today consumer is wised
enough e.g. red bull energy drink

Advertising Death (case study)

Tobacco industry spended 5.5 billion each
year on ads.
2million kids under 18 start smoking to
replace those smokers who die or quit
90% of smokers start smoking before age
of 21.

Smoking cause 4000,000 smokers

globally mouth, throat, larynx, stomach ,
bladder, kidney and pancreas cancer
Joe Tye an industry critic, notes:
No advertising is more deceptive than
used to sell cigarette
Images of health & vitality is used to sell
disease and suffering
Images of life are use to produce death

Studies show that advertising increase

tobacco sale and advertising BAN reduce
smoking up to 16%.