Background:

In Grant v. Australian Knitting Mills (1936), Dr. Grant developed dermatitis after wearing woolen underwear made by the defendant manufacturer. It was later discovered that the garment contained harmful chemical residues due to negligent production. Although Dr. Grant had no direct contract with the manufacturer, he sued for damages, arguing that the faulty product caused his injury. The court held that manufacturers owe a duty of care to end consumers, even without a direct contractual relationship. This decision significantly shaped product liability law by confirming that manufacturers must ensure their goods are safe for use.

Issues:

Whether the manufacturer owed a duty of care to the ultimate consumer and could be held liable in negligence for injuries caused by a defective product, despite the absence of a direct contractual relationship (privity) between them.

Observations:

The Court made the following observations:

• • A manufacturer owes a duty of care to the ultimate consumer to ensure products are free from defects that can cause injury.
• • The duty of care exists even in the absence of direct contractual relations (privity) between manufacturer and consumer.
• • Negligence can be established where a manufacturer fails to exercise reasonable care in the manufacturing process, resulting in harmful defects.
• • Consumers have the right to expect that products sold are reasonably safe for their intended use.
• • The case marked a shift from strict contract-based liability towards liability in tort for defective products.

Decision:

The Privy Council held the manufacturer liable in negligence for the injuries suffered by Dr. Grant.

• • It was ruled that the manufacturer owed a duty of care to the ultimate consumer and breached that duty by leaving harmful chemical residues in the woolen underwear.
• • The Court awarded damages to Dr. Grant for the dermatitis caused by the defective product, establishing a foundational principle in product liability law that manufacturers must ensure their products are safe for consumers.

Why this case matters?

This case is a landmark case because it fundamentally transformed the law relating to product liability by establishing that manufacturers owe a duty of care directly to consumers, even in the absence of a contractual relationship. This marked a significant shift from the traditional requirement of privity of contract to recognizing negligence as a basis for liability in defective products. The ruling reinforced the principle that manufacturers must take reasonable care during production to avoid causing harm. Its impact extends globally, shaping modern consumer protection and tort law by promoting accountability and enhancing consumer safety.