legal disputes Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity'', 90. with its precise definition a matter of longstanding debate. It has been vario ...

regarding

product liability Product liability is the area of law in which manufacturers, distributors, suppliers, retailers, and others who make products available to the public are held responsible for the injuries those products cause. Although the word "product" has br ...

, a risk-utility test is used to determine whether a

product Product may refer to: Business * Product (business), an item that serves as a solution to a specific consumer problem. * Product (project management), a deliverable or set of deliverables that contribute to a business solution Mathematics * Produ ...

's design or warning is

defective Defective may refer to:: *Defective matrix, in algebra *Defective verb, in linguistics *Defective, or ''haser'', in Hebrew orthography, a spelling variant that does not include mater lectionis *Something presenting an anomaly, such as a product de ...

, thereby making the manufacturer

liable In law, liable means "responsible or answerable in law; legally obligated". Legal liability concerns both civil law and criminal law and can arise from various areas of law, such as contracts, torts, taxes, or fines given by government agencie ...

for injuries caused by its product. The manufacturer is held liable under the risk-utility test if the probability of injury times the gravity of injury under the current product design is more than the cost of an alternative reasonable design plus the diminished utility resulting from modifying the design. More simply, the court considers if the

economic An economy is an area of the Production (economics), production, Distribution (economics), distribution and trade, as well as Consumption (economics), consumption of Goods (economics), goods and Service (economics), services. In general, it is ...

costs (determined from likely

lawsuit - A lawsuit is a proceeding by a party or parties against another in the civil court of law. The archaic term "suit in law" is found in only a small number of laws still in effect today. The term "lawsuit" is used in reference to a civil actio ...

s) are higher than the cost of changing the product design (ex: installing a plastic guard) plus the loss of use of the product (ex: the new guard makes it harder to use the product). Generally, the simplest way to think of the risk-utility test is the Hand Formula applied to products. The Third Restatement of the Law, Torts: Products Liability §2(b) favors the risk-utility test over the Second Restatement of the Law, Torts §402(a), which favored the consumer expectations test. §2(b) states, in part, "A product is defective when, at the time of sale or distribution...is defective in design. A product is defective in design when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design by the seller or other distributor, or a predecessor in the commercial chain of distribution, and the omission of the alternative design renders the product not reasonably safe."Restatement (Second) of Torts § 402A, cmt. b (1965).

References

Tort law Legal tests {{US-law-stub