When business transactions take place across international borders, do product liability laws apply?


Business Law

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ophelious's profile pic

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Product liability law is complicated, and when international interests are added to the mix it becomes a quagmire.  Suppose, for instance, that you buy a product in the US that was also manufactured in the US by a company that operates within the US.  Now, suppose you are injured by that product.  Filing a suit against that company depends on US law, and should you win a judgement or agree to a settlement, the mechanisms of the law allow for that money to be collected.

Now, what if you are injured by a product that was not manufactured in the country you live in?  You'd still have a chance at a law suit if that foreign company had operations in the US (it's easier to sue someone and actually collect the money when they've got assets under your country's legal jurisdiction.)  But in this day and age, many products are imported from across the sea and have been built by companies with no physical presence in the United States.  In that case, one would generally try to sue the retailer or importer of the product, who would in turn take legal action against the foreign company through what's called an "indemnity" lawsuit.

The trouble is that, even if the lawsuit is won, there is no way to force collection of the judgment against the company if it doesn't have assets inside the US.  There are no treaties in place by which the United States agrees to act as a "collection agent" for foreign lawsuits, or vice-versa.  While winning the lawsuit is the easy part, collecting any damages becomes very unlikely when an entirely foreign company is involved (especially if that company lives in a country that is hostile to US interests.)


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