*First a disclaimer.* I am not a lawyer and the following article should be read as my opinion and is not intended to be taken as legal advice. You should talk to an attorney for legal advice.
A question that we see often here at WorldwideBrands.com is if an online retailer can be sued for product liability issues on the products they sell through their online stores.
For example: Jim is selling Child Car Seats online, and even though unlikely –but possible- the child becomes injured due to a faulty car seat. Should Jim worry that the parents of the child might include him in the lawsuit?
Well, anything is possible. Watch the news. There are some truly ridiculous lawsuits filed and you never know what someone else would do in this situation. Now, I’m not saying that the parents of the injured child filing a lawsuit is ridiculous! I just feel that anyone responsible for the injury should own up to it.
But should Jim be included in that responsibility? Is he responsible for the faulty product, simply because it was sold through his online store? Could he have KNOWN it was defective? I doubt it. I personally have never heard of a situation where an online seller sold something manufactured by someone else, and had to take the blame for it. People who sue over things like this, generally go after the manufacturer, not the unaware retailer who sold the product in good faith. This doesn’t mean it CAN’T happen, but I personally have never heard of it happening.
Then again, if Jim was knowingly selling products that were factory recalled because of a defect – then this story would be different and he SHOULD be held responsible.
So, generally, in my opinion, if a product that you sell in your online store fails because of a manufacturer’s defect that you were unaware of, I don’t personally believe you would or should be included in a lawsuit over the issue. It should be the manufacturer that is responsible.
But to protect yourself, always make sure that you are aware of any recalls or safety notices that your Wholesale Supplier, Drop Ship Supplier or manufacturer may post about any of the products that you sell. If there is a notice issued, IMMEDIATELY stop selling those products until the problem is resolved.
If you are a worry wart about this issue, there are two things that you could do.
Contact an Attorney and have them draft a legal disclaimer or policy that you place in your online store or auction listings that can give you as much protection as possible.
Incorporate your business. As I understand it, if you are not incorporated and you do get sued over any issue regarding your business, you not only lose your business assets, but your personal assets may become affected too. Incorporating your business acts to protect your personal assets.
Again, I want to stress that questions such as these should be addressed to an Attorney for the correct legal interpretations.