Even though an exporter may channel his products into a particular market through a distributor, franchisee or other independent operator, he may still be held liable to a person suffering injury to health as a result of a product defect. The term product liability has come to strike fear into the hearts not only of manufacturers, but also anyone associated with a product s design, production and distribution. The compensation culture which has developed in many countries has resulted in an explosion of claims being brought by disaffected consumers against manufacturers, some of which have produced startling results. Notorious among these is the claim brought by a seventy-nine-year-old American woman who was burned when spilling a cup of hot coffee over herself which she had purchased at McDonald s. She was awarded compensatory damages of $200 000 and punitive damages of $2.7 million! The only crumb of comfort for McDonald s was that these sums were reduced on appeal to $160 000 and $480 000 respectively.

As will be explained below, liability for a defective product is not necessarily confined to the manufacturer. By way of example, consider the following scenario. X is driving to work in her car which she has recently purchased from a local retailer. As she approaches a road junction, she puts her foot on the brake but nothing happens. Unable to stop, X collides with another car which is crossing the junction at the same time. Both X and Y, the driver of the other...