Liability in Tort and Putting a Defective Product Into Circulation

The wording of § 823 para. 1 of the German Civil Code (BGB) is very wide in scope and establishes producer liability in tort:

“Anyone who, intentionally or negligently, unlawfully injures the life, body, health, property or other right of another person shall be liable to pay compensation to the other party for the resulting damage.”

This general formulation includes liability for damage caused by a defective product at the purchaser’s, end user’s or other third party’s. If you transfer the individual conditions of liability into a structure, you will have the following method of assessment:

1. Act or omission of offender = Putting a defective product into circulation 
2. Physical injury or damage to health, damage to property
3. Physical injury or damage to health/damage to property caused by defective product
4. Illegality
5. Fault (slightest negligence is sufficient!)
6. Legal consequence: Compensation

Putting a defective product into circulation
Liability in tort, as stated in the Product Liability Act, begins when the defective product is put into circulation. Nonetheless, the point at which the product is put into circulation is not defined in law. At the latest therefore, this can be deemed to be when the product appears on the market, but this is not a condition: It is sufficient for the producer to pass the product to another person outside his sphere of producers.

The product is deemed to have been put into circulation when it has been delivered to a sales company which is legally independent of the producer, has been passed to the forwarder or carrier, or the subproduct has been supplied to the assembler. It has not been put into circulation if the product has merely been offered, held in stock or passed to a materials testing laboratory for test purposes.