Last updated 16 April 2025

A person might suffer personal injury or property damage as a result of a product being defective in the manufacture, design or formulation of a product or a defect in product information. For example, a bottle might explode and injure a person’s hand, or a replacement part in an engine might fail and damage the whole engine.

If the person who suffers the injury or damage has purchased the defective item, they will probably be able to sue the supplier of the goods in contract. Furthermore, if the item was acquired for private or domestic use and was either manufactured by a corporation in Australia or was imported into Australia by a corporation, there will probably be a statutory right to sue the manufacturer for breach of warranty under the Competition and Consumer Act 2010 (Cth) (Competition and Consumer Act) (see chapter on Consumers and Contracts).

In cases where there is a safety defect in goods, and the safety defect causes personal injury or damage to certain types of other goods, there may be further claims that can be made under the Australian Consumer Law (sch 2 ch 3 Competition and Consumer Act). In addition to these contractual and statutory duties, the common law of negligence also imposes a liability on manufacturers of defective products to those who suffer injury or damage as a result of coming into contact with defective products.

This area is complex and legal advice should be sought.

Liability of manufacturers for negligence

A manufacturer of a defective product may be liable for negligence, breach of contract and/or for breach of the Competition and Consumer Act.

The normal elements of negligence must be established in order to establish liability.

Under common law, however, before a manufacturer can be sued it must be shown that the manufacturer was negligent in the design, manufacture or presentation of the product. Negligence is not a prerequisite for a claim relating to breach of contract and/or breach of the manufacturer’s liability under the Competition and Consumer Act.

The duty of care in negligence is not an absolute duty to prevent loss or damage. It is only a duty to take reasonable care. Accordingly, a defendant will not be liable in respect of obvious and unavoidable risk or in respect of unforeseeable risk.

To whom is the manufacturer’s liability owed

A manufacturer’s common law liability is owed to anyone the manufacturer should reasonably foresee as likely to suffer injury or damage if the product is defective in either its design, manufacture, presentation of the product, safety and/or distribution. If a motor vehicle contains a manufacturing defect and as a result is involved in an accident, the manufacturer will be potentially liable to the owner of the vehicle for damage caused to the vehicle in the impact and to anyone who else who suffered personal injury, whether they were travelling in the vehicle or were standing on a footpath. All could be foreseen as likely to sustain injury or damage.

Proof of negligence

Proof will vary depending on the particular incidence of negligence being alleged. The main allegations of negligence in manufacturing liability cases include defect in the product itself, defect in the product design or failure to give appropriate instructions/warnings as to its proper use.

Establishing a defect in a product may require detailed expert examination of the product such as by an engineer. It must also be shown that any defect has, on the balance of probabilities, resulted from matters within the control of the person being sued and has not resulted from any subsequent handling or use of the product. For example, a bottle might explode due to a defect in the bottle itself (responsibility of the bottle manufacturer), excessive carbonation in the bottle (responsibility of the drink manufacturer), mishandling in transit (responsibility of the transporter, wholesaler or retailer) or mishandling by the consumer.

When a product is involved in an accident and injury or damage results, and there is any suspicion that the product might have been defective, then that product (or what is left of it, including all pieces) should be kept until legal advice is obtained. It may be near impossible to prove that a product was defective if its remains are disposed.

What products are covered

Products are generally defined in the broadest sense of the term. The definition extends to construction of houses, production of cars, household consumables, industrial equipment and the like. The fact that a product is second hand does not bar a claim. However, the definition of ‘goods’ and ‘consumer goods’ under the Australian Consumer Law can limit the application of some of the statutory causes of action.

Who is liable

Anyone who causes a product to be defective is potentially liable for any injuries or property damage resulting from the defect. Such persons or entities may include:

  • producers or suppliers of raw material
  • manufacturers of component parts
  • manufacturers and designers of finished products
  • assemblers and installers
  • importers and distributors
  • repairers and other service providers
  • architects and engineers
  • certifiers
  • licensors
  • bailors
  • bailees
  • retailers and other suppliers.

What damages are recoverable in negligence

Generally speaking, if a product is defective there may be remedies for breach of contract or under the Australian Consumer Law for the cost of replacement, repair or refund for a product.

If personal injury or property damage results from the product being defective, compensation for such loss may be recoverable. These damages include general damages for pain and suffering, loss of income (past and future), care and special damages (including medical treatment expenses). There are often caps to the amount of damages that can be recovered. When the product itself is physically damaged, damages for the reasonable cost of repair or replacement are recoverable.

Does a defence exist

In addition to some of the defences detailed above (see Defences to a negligence action), a defendant may be able to avoid liability for a defective product if:

  • developmental risks defence exists. This defence may be available where the defect that was present in a product at the time of its supply was neither known nor discoverable by the defendant given the state of scientific and technical knowledge at the time. The defence would not be available where the defendant would have known of the risk created by the defect if it had carried out appropriate research, testing or investigation prior to the time of supply
  • learned intermediary defence exists. This defence may be available where products, such as vaccines, prescription-only pharmaceuticals or professional hair-care products, are supplied through learned intermediaries such as medical practitioners or professional hairdressers. The defendant must establish that the information, if provided to learned intermediaries, was adequate in the circumstances to alert them to the potential risks associated with the product. This defence may be available where products, such as chemicals, are supplied in bulk and where there is a reasonable expectation that the person acquiring the product in bulk will package and label the product, and will provide appropriate warnings and instructions to persons who it can reasonably be foreseen may suffer loss or damage in using the product.

What is the limitation period?

A person who has suffered personal injury generally has three years from when the cause of action arose to bring a common law claim. In relation to a claim for breaches under the Competition and Consumer Act, an injured person generally has three years from the time when the person becomes aware or should have reasonably become aware of a cause of action. There are some extensions to this time period depending on the specific cause of action of up to 10 years from the supply of the goods and also up to 12 years following the act that is alleged to have caused the injury.