Plaintiff brought this action based upon the theory of strict liability in tort to recover for personal injuries caused by a 24-year-old crane sold by defendant, a used equipment dealer, to plaintiff’s employer, Durametal. The court tried the case without a jury and found for the defendant. The plaintiff appeals and we affirm.
Durametal asked the defendant to locate a crane for purchase by Durametal. Defendant found one that looked suitable; Durametal inspected and approved it. The defendant purchased the crane and immediately resold it to Durametal. Defendant prepared documents making the sale "as is.”
Durametal assigned plaintiff to оperate the crane, including greasing it. Plaintiff believed the greasing of the gears could not be done properly without removing the gear cover and applying the grease while the gears were moving. While he was so greasing the gears, plaintiff’s hand was drawn into them and he was injured. 1
Plaintiff alleged the defendant seller was liable because the crane was defectively designed in that it could not be properly greased without removing the protective gear covering and for failing to provide warnings of the danger. The trial court found for the defendant because the crane was a used piece of equipment and sold "as is.”
*750 The parties disagree about the effect of the "as is” disclaimer in the documents of sale. The issues raised include whether that disclaimer has any effect in an action of strict liability in tort, 2 and whether, if so, it is effective to disclaim liability for a design defect as distinguished from a defect in the condition of the individual product. We do not answer these questions because we cоnclude that the trial court was correct in holding that a seller of used goods is not strictly liable in tort for a defect in a used crane when that defect was created by the manufacturer.
While we have decided cases in which the sale of a used product was involved, we have not decided the issue presented in this case. 3
In
Tucker v. Unit Crane & Shovel Corp.,
In
Markle v. Mulholland’s,
Inc.,
"* * * Nevertheless, the manufacturer selected this casing from among all available casings to retread and this implies something concerning its condition. Tread was put upon it which was capable of lasting more than 5,000 or 6,000 miles. This indicates that there is reason to believe that the manufacturer intended and the purchaser had a right to expect a quality of performance from the casing greater than that which it gave. * * *" Id. at 271.
In
Cornelius v. Bay Motors,
In order to determine whether the defendant seller may be held liable we are required to re-examine why we arrived at the decision that a seller "who is free from fault in the usual sense” should be held strictly liable for a defective product.
Wights v. Staff Jennings,
"* * * Usually liability has been predicated on a breach of an implied warranty without explaining why the warranty was judicially implied. When the action was brought by the buyer against his immediate seller, it seemed enough that the plaintiff and defendant were parties to a contract, the warranty being bom in some mysterious way out of the contractual relationship even in the absence of any promise express or implied in fact made by the seller. * * Wights v. Staff Jennings, supra, at 306.
Because of the impediments accompanying a contractual remedy, including the requirement of privity, we evolved the tort of strict liability.
Redfield v. Mead, Johnson & Co.,
Nevertheless, courts did impose strict liability on the nonmanufacturer sellers of new goods as summarized in a recent study:
"Over time most courts extended the rationale of these cases to both retailers and distributors. * * * Courts extended strict liability to retailers and distributors, in part, on the assumption that these groups would place pressure on the manufacturer to produce safe products. Courts also believed that retailers and distributors might be more accessible to suit than manufacturers.” U.S. Dept of Commerce, Interagency Task Force on Product Liability: Final Report II-4, 5 (1976).
As Mr. Justice Traynor said in
Vandermark v. Ford Motor Company,
61 Cal 2d 256, 37 Cal Rptr 896,
"Retailers like manufacturers are engaged in the business of distributing goods to the public. They are an integral part of the overall producing and marketing enterprise that should bear the cost of injuries resulting from defective products. (See Greenman v. Yuba Power Products, Inc., 59 Cal 2d 57, 63,27 Cal. Rptr. 697 ,377 P2d 897 ). In some cases the retailer may be the only member of that enterprise reasonably available to the injured plaintiff. In other cases the retailer himself may play a substantial part in insuring the product is safe or mаy be in a position to exert pressure on the manufacturer to that end; the retailer’s strict liability thus serves as an added incentive to safety. * *
Mr. Justice Schaefer stated in
Dunham v. Vaughan & Bushnell Mfg. Co.,
42 Ill2d 339,
Moreover, if a jurisdiction has adopted the principle of strict liability on the basis of enterprise liability, the liability of the seller of either a new or used product would logically follow. A judge of the Superior Court of New Jersey in a case involving a used truck explained the reasoning:
"We will first consider whether this is the type of case for the application of strict liability in tort. An economic analysis of enterprise liability which includes direсt as well as indirect costs, would charge those in the business of selling a defective product with responsibility for all harms, physical and economic, which result from its use. Baxter, 'The SST: From Watts to Harlem in Two Hours,’ 21 Stanf. L. Rev. 1 (1968); Coase, 'The Problem of Social Cost,’ 3 J. Law & Econ. 1 (1960). To a considerable extent— with respect to new goods—the manufacturer bases the cost of his product on his expenses, which include damages caused by the product and insurance to cover those damages. This cost is spread among all the customers for that product; it reflects the justifiable expectations of customers regarding safety, quality and durability of new goods. Sellers of used goods may similarly distribute their costs of doing business which, in turn, will reflect what is considered by thе public to be justifiable expectations regarding safety, quality and durability of used goods.” Turner v. International Harvester Company, 133 NJ Super 277,336 A2d 62 , 69 (1975).
To the same effect,
Hovenden v. Tenbush,
This court has never been willing to rely on enterprise liability alone as a justification for strict liability for defective products.
See Markle v. Mulholland’s, Inc., supra
(
"* * * [Cjompensation (ability tо spread the risk), satisfaction of the reasonable expectations of the *754 purchaser or user (implied representational aspect), and over-all risk reduction (the impetus to manufacture a better product) * * Fulbright v. Klamath Gas Co.,271 Or 449 , 460,533 P2d 316 (1975).
While dealers in used goods are, as a class, capable like other businesses of providing for the compensation of injured parties and the allocation of the cost of injuries caused by the products they sell, we are not convinced that the other two considerations identified in Fulbright weigh sufficiently in this class of cases to justify imposing strict liability on sellers of used goods generally. 4
Our opinions have discussed, on other occasions, what we called in
Fulbright
the "implied representational aspect” of the justification for strict products liability. In
Heaton v. Ford Motor Co.,
"* * * It is an expectation which is the result of the manufacturer’s or seller’s placing the article in the stream of commerce with the intention that it be pm-chased. This expectation is given legal sanction by the law through an assumption that the seller, by so placing the article in the stream of commerce, has represented that the article is not unreasonably dangerous if put to its intended use.”265 Or at 268 .
This representational aspect, the opinion continues,
"* * * * is one of limitation in an attempt to keep [the expansion of strict liability doctrine] within *755 manageable and logical bounds and to keep the liability from being absolute.” Id
By identifying this purpose of limitation wе recognized that the court’s role in defining the kinds of cases in which the law will permit a jury to find an expectation of safety serves a policy function.
See, also, id.
at 293-294 (Denecke, J., dissenting) and
Cornelius v. Bay Motors, supra
(
We consider, then, whether the trier of fact may infer any representation as to safety from the sale of a used product.
We conclude that holding every dealer in used goods rеsponsible regardless of fault for injuries caused by defects in his goods would not only affect the prices of used goods; it would work a significant change in the very nature of used goods markets. Those markets, generally speaking, operate on the apparent understanding that the seller, even though he is in the business of selling such goods, makes nо particular representation about their quality simply by offering them for sale. If a buyer wants some assurance of quality, he typically either bargains for it in the specific transaction or seeks out a dealer who routinely offers it (by, for example, providing a guarantee, limiting his stock of goods to those of a particular quality, advertising that his used goods are specially selected, or in some other fashion). The flexibility of this kind of market appears to serve legitimate interests of buyers as well as sellers. 5
We are of the opinion that the sale of a used product, without more, may not be found to generate the kind of expectations of safety that the courts have *756 held are justifiably created by the introduction of a new product into the stream of commerce.
As to the risk-reduction aspect of strict products liability, the position of the used-goods dealer is normally entirely outside the original chain of distribution of the product. As a consequence, we conclude, any risk reduction whiсh would be accomplished by imposing strict liability on the dealer in used goods would not be significant enough to justify our taking that step. The dealer in used goods generally has no direct relationship with either manufacturers or distributors. Thus, there is no ready channel of communication by which the dealer and the manufacturer can exchange informаtion about possible dangerous defects in particular product lines or about actual and potential liability claims.
In theory, a dealer in used goods who is held liable for injuries caused by a design defect or manufacturing flaw could obtain indemnity from the manufacturer. This possibility supports the argument that permitting strict liability claims against deаlers in used goods will add to the financial incentive for manufacturers to design and build safe products. We believe, however, that the influence of this possibility as a practical factor in risk prevention is considerably diluted where used goods are involved due to such problems as statutes of limitation and the increasing difficulty as time passes of locating a still existing and solvent manufacturer.
Both of these considerations, of course, are also obstacles to injured parties attempting to recover directly from the manufacturer. However, although the provision of an adequate remedy for persons injured by defective products has been the major impеtus to the development of strict product liability, it cannot provide the sole justification for imposing liability without fault on a particular class of defendants.
*757
For the reasons we have discussed, we have concluded that the relevant policy considerations do not justify imposing strict liability for defective products on dealers in usеd goods, at least in the absence of some representation of quality beyond the sale itself or of a special position vis-a-vis the original manufacturer or others in the chain of original distribution. Accord: R
ix v. Reeves,
23 Ariz App 243,
We have suggested, although we have never had occasion to rule on the question, that those who are in the business of leasing products to others may be strictly liable for injuries caused by defective products on the same basis as sellers of new products.
Fulbright v. Klamath Gas Co., supra
(
Plаintiff contends the trial court also erred in refusing to admit into evidence defendant’s third party complaint which was offered to show a judicial admission that the crane was defective. In view of our decision that the defendant seller is not liable in strict *758 liability in tort for the sale of a defective crane, the admission, if it was an admission, is irrelevant.
Affirmed.
Notes
Plaintiff was injured in March of 1975. Defendant has raised no issue concerning the applicability of OES 30.905, which provides:
"(1) Notwithstanding OES 12.115 or 12.140 and except as provided in subsection (2) of this section, a product liability civil action shall be commenced not later than eight years after the date on which the product was first purchased for use or cоnsumption.
"(2) A product liability civil action shall be commenced not later than two years after the date on which the death, injury or damage complained of occurs.”
The statute applies "only to causes of action, claims, rights or liabilities accruing after December 31, 1977.” 1977 Oregon Laws ch 843, § 5.
See K Lines v. Roberts Motor Co.,
"Unless the circumstances indicate otherwise, all implied warranties are excluded by expressions like 'as is,’ 'with all faults’ or other language which in common understanding calls the buyer’s attention to the exclusion of warranties and makes plain that there is no implied warranty; * * *.”
The few cases frоm other jurisdictions are collected at 53 ALR3d 337 (1973).
When considering the applicability of these policy bases, of course, the courts consider their application not to the specific facts of the particular case, but rather to the general type of situation before them. That means, for example, that they are not concerned with a particular seller’s actual insurance coverage, but with the ability in general of those in the business of selling a product to spread the risk through such means as pricing and insurance.
While the buyer’s actual expectations in a particular transaction have no logical relevance to whethеr an injured plaintiff who was not the purchaser should be allowed to recover in a given case, the expectations of purchasers generally are relevant to what the public expects, and the courts should recognize, as the appropriate level of the seller’s responsibility for the safe condition of the goods he sells.