Your legal duty to warn customers

October 1, 2001 By    

If properly designed and built products cannot be made completely safe, the law requires that consumers be instructed on the proper use, inherent dangers and proper means to avoid those dangers. Obviously, propane is such a product.

Most retail propane distributors are well aware that the above “duty to warn” is applicable to them. However, some industry members are surprised to learn that the responsibility does not stop with the retailer.

The law in most states requires every person or company in the chain of distribution to provide a warning to the end user, although that duty may be discharged by another party in the chain. It is important to note that the duty is not to the party next in the line for distribution and sale, but rather to the final consumer.

An intermediate or “remote” supplier of propane who is several steps removed from the end user still has a legal duty to warn that consumer. So does a supplier of a bulk product ­ like propane ­ to which it is impossible to attach a warning. In both cases, the supplier’s duty to warn may be satisfied if the retailer provides an adequate warning to the consumer.

The duty also may be discharged if the remote supplier provides adequate information to the person next in line in the chain of distribution and takes reasonable steps to ensure that supplier has passed those warnings down the chain. “Adequate information” would include a description of and sources where the proper warnings may be obtained.

Even better ­ but not always justified, given the frequency of your wholesale business ­ is to distribute the warnings at cost to your purchaser.

This is one area of the law where compliance pretty much forces a seller to engage in invasive business practices with its customers. Obviously, you really don’t want your marketing plan to include telling your customer how to run his business or disclosing negative information about your product. Yet sellers of propane must warn their customers.

With most products, the upstream supplier’s duty usually can be satisfied by attaching a warning tag or label to the product itself, or by including written warnings in the package in which the product is shipped to the ultimate user. Since propane is a bulk product to which a warning cannot be attached and is not delivered in a package to the end user, the law in most states provides that a supplier can satisfy its duty by providing full and adequate warnings to its direct customer.

What you should do
In addition to providing information and warnings to the next customer in line, remote suppliers should include in their sales contract that your buyer:

  • Acknowledges his or her understanding of the hazards and characteristics
    of propane;
  • Agrees to furnish such information and warnings as are appropriate to his
    or her customers;
  • Agrees to take steps to assure that the ultimate consumer received such
    information and warnings; and
  • Indemnifies and holds you harmless from any claims or suits resulting from
    any failure to adequately warn the ultimate consumer.

In the lawsuits in which I have been involved over the years, it has been my experience that the fault of a plaintiff must be overwhelmingly clear in order to persuade the jury to render a complete defense verdict. If the evidence of plaintiff’s negligence is not clear and compelling, the jury is inclined to apportion fault among plaintiff and the defendant. When death or serious burn injuries are at issue and the potential damages are large, even a small apportionment of fault to a defendant can result in a large dollar verdict.

This is especially true in those jurisdictions where joint and several liability still exists, exposing each defendant to the risk of paying a significant portion of the entire verdict if the other defendants are judgment proof or have little insurance coverage or net worth.

The bottom line for a propane retailer, manufacturer, shipper, wholesaler, pipeline or other transporter is that each party has a significant financial self-interest in providing the legally mandated warnings about the properties and hazards of propane and ensuring that consumers get the information needed to safely use propane in their homes.

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