Who is liable for damage done by exploding Coke bottles?
• A. Consider two alternative legal rules: • 1. Caveat Emptor (latin for “let the buyer beware”): You take your good as it is, defects and all. If the coke bottle explodes, the injured consumer pays his own bills. • 2. Caveat Venditor (“let the seller beware”): If something goes wrong with the product, the seller is liable for the damage. • 3. I am treating the distinction as sharper than it really is. If your wife shoots you with your gun, something has gone wrong, but the fact that a gun shoots the person it is pointed at does not generally count as a product defect, even if it happens to have been pointed at the wrong person. So implicitly we are talking only about some subset of “things going wrong” that are plausibly associated with something wrong with the product. • 4. But that can still be a large and hazy category. • B. Insurance, risk spreading argument: The Coke company can self-insure, the customer cannot. • 1. If Coca-cola is selling ten billion bottles a year, of which on
