According to the stream-of-commerce theory, a company can be held responsible for harm caused by its product in a specific place if the product is sold in many different places and the company has a connection to that place, such as advertising or having a salesperson there.
The stream-of-commerce theory allows a state to have jurisdiction over a defendant if the defendant sells a product in the general marketplace and that product causes harm or injury in the state. This principle applies when the defendant also takes additional actions to establish a connection with the state, such as advertising or hiring a sales agent there. For instance, if a company based in California sells a defective product that harms a consumer in New York, the state of New York can assert jurisdiction over the California company using the stream-of-commerce theory. This is because the company made the product available in the general marketplace and took steps to establish a connection with New York, such as advertising or hiring a sales agent there. Another example involves a Texas-based company that sells a product online and ships it to customers nationwide. If a customer in Florida is injured by the product, Florida can establish jurisdiction over the Texas company using the stream-of-commerce theory. This is because the company made the product available in the general marketplace and established a connection with Florida by shipping the product there.
The stream-of-commerce theory is a legal concept that determines whether a defendant can be held liable for a product that causes harm, even if the defendant did not directly sell or distribute the product.
Under the stream-of-commerce theory, a defendant can be held liable if they are part of the chain of distribution and their actions contribute to the product reaching the consumer.
The stream-of-commerce theory is significant in product liability cases as it helps determine the extent of liability for manufacturers, distributors, and sellers of defective products.
Yes, a defendant can be held liable under the stream-of-commerce theory if their component is an integral part of the final product and contributes to the harm caused.
Yes, the stream-of-commerce theory applies to online sales as well. If a defendant is part of the chain of distribution and their actions contribute to the product reaching the consumer, they can be held liable.
Yes, a defendant can still be held liable under the stream-of-commerce theory even if they were unaware of the defect. The focus is on their role in the distribution chain rather than their knowledge of the defect.
Yes, there are limitations to the stream-of-commerce theory. Some jurisdictions require a defendant to have purposefully targeted the market where the harm occurred to be held liable.
In some cases, a defendant who only provided advertising or marketing services may be held liable under the stream-of-commerce theory if their actions contributed to the product reaching the consumer.
Yes, a defendant located in a different country can still be held liable under the stream-of-commerce theory if they are part of the chain of distribution and their actions contribute to the product reaching the consumer.
The stream-of-commerce theory focuses on the defendant’s role in the distribution chain, while strict liability holds defendants liable for harm caused by a defective product regardless of their role in the distribution chain.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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