Store Liability: Sale of Goods Act and the Failure to Warn

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Written By: Lindsay Charles and Aidan Vining, Summer Student

What happens when you purchase a product from a store and are subsequently injured by that product?

While much of the focus in product liability situations is on the manufacturer of the product, it is important to know that the store which sold the product is also responsible for damages caused by the product to the purchaser of the product.

The Sale of Goods Act

This is largely due to the Sale of Goods Act (SGA). The SGA is legislation that regulates contracts of sale and provides protection to consumers in Ontario. One of the ways it does this is through section 15, where the SGA stipulates that every contract of sale between a “buyer” and “seller” has implied warranties as to the quality and fitness of the product being purchased. One of the implied conditions is that products being purchased must be reasonably fit for their purpose. If a product is found to not be reasonably fit for its purpose, the seller can be found strictly liable. This means it does not matter whether the seller was negligent or not – they are liable for the injuries caused by the product.

An example of how this works comes from Shandloff v City Dairy Ltd, [1936] ONCA. In Shandloff, a store sold a bottle of chocolate milk that contained glass fragments to the plaintiff. The plaintiff drank the contents of the bottle, including the glass fragments, and suffered injuries. The Ontario Court of Appeal stated that the chocolate milk was purchased by the plaintiff by description from the store and that pursuant to section 15 of the SGA, there was an implied condition that the goods were of merchantable quality. The ONCA held the store where the bottle was purchased liable for the plaintiff’s injuries even though the store did not manufacture or ship the bottle. The sole reason for the store’s liability was the SGA’s implied condition that the chocolate milk sold was of merchantable quality.

As noted, the SGA applies to every contract of sale between a “buyer” and “seller,” as defined in the SGA. However, the SGA only applies to the contract of sale, it does not apply to the actual product itself that is purchased. This means the protection provided by section 15 of the SGA is only available to a “buyer,” and not an end-user of the product who is not a “buyer.”

So, what happens when a person is injured by a product that was not purchased by them, but rather by someone else – for example, a gift?

Failure to Warn

Some gifts may have an increased potential to injure or cause harm. Some of the cases that have been litigated in Court include:

  • Bicycles
  • Electronics
  • Children’s Toys
  • Sports Equipment

When a gift does cause injuries, it is still possible to find the store liable even without the assistance of the SGA.

The store, as a supplier, has a continuing duty to warn all those who may reasonably be affected by the potentially dangerous product of any dangers inherent in the use of the product that is known to the store or ought to be known. The store must also warn of any risks associated with reasonably foreseeable misuses of the product. There does not need to be a contractual buyer-seller relationship. Stores must also take care in the way they display and advertise dangerous products. Stores are in a position of knowledge about the product, and the average consumer is relying on the store to accurately describe the product and to provide warnings where they are necessary.

Ultimately, to be successful against the store, it must be established on the balance of probabilities that:

  • the store knew or reasonably ought to have known of the risk;
  • the store negligently failed to warn of the risk (i.e., they gave no warning or the warnings were inadequate); and
  • the gift-receiver would have heeded the warning and used the product differently had the adequate warning been made.

The nature and scope of the duty to warn increases with the level of danger involved in the use of the product. All warnings must be reasonably communicated and must clearly describe any specific dangers that arise from the product.

When a person is injured by a product, it is important to consider and determine who is responsible for the injuries suffered. Not only does the injured victim deserve to be adequately compensated for his or her injuries and loss of income, but holding all careless parties accountable is one way to ensure that consumers are protected and products become safer. If you or a loved one have been injured by a product, we recommend speaking with an experienced lawyer.

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