I. Introduction
When dealing with product liability, it is necessary to distinguish between liability for damage caused by a defective product and liability for the product's defect as such. The latter is a matter of contract law, based primarily on contractual warranty. The former, focusing on consequential damages, falls mostly within the scope of the law of torts and product liability, more specifically, is dealt with in the following way[1].
The term "product liability" generally refers to liability for damages caused by death, personal injuries or property damage inflicted by a defective product, as supplied or otherwise put in circulation. Product liability can be based on tort or contract, applying § 1293 of the Allgemeines Bürgerliches Gesetzbuch (Austrian Civil Code, ABGB) and the Produkthaftungsgesetz (Code on Products Liability, PHG).
Therefore a claim for compensation based on product liability can be based either on the ABGB (and therefore on a tort of negligence or on contract) or on the PHG (and herewith on strict liability) by choice of the plaintiff. Before the PHG came into force in 1988, product liability was based exclusively on the ABGB. Even though nowadays the PHG - basing on the respective EC Directive, EG 85/374 EWG, - is, as to be explained below, the preferable rule to be applied, the ABGB continues to be used in a variety of special cases[2].
1. Leading litterature on the topic: Posch in Schwimann [Hg], ABGB Praxiskommentar VII2 (2005); Fitz/Grau/Reindl, Produkthaftung2 (2004); Welser/Rabl, Produkthaftungsgestz2 (2004).
2. See further IV.
