Products Liability Through Private Ordering: Notes on a Japanese Experiment

University of Pennsylvania Law Review, 1996.

Posted: 14 May 1998


Any justification of strict products liability faces a problem: why should the law impose on private contracts made in competitive product markets what is effectively a mandatory insurance contract? Proponents of the current regime generally justify it by citing some mix of contracting costs, informational asymmetries, and (sometimes) consumer irrationality. The common implicit premise is that parties to ordinary consumer sales contracts would not, in an unregulated market, negotiate strict products liability by contract. In fact, over the past 20 years, manufacturers of a wide variety of products in Japan have voluntarily offered strict products liability protection by contract. In this article, I introduce the data on these contracts, and explore why some manufacturers (but not others) have found the contracts economically advantageous.

JEL Classification: K13

Suggested Citation

Ramseyer, J. Mark, Products Liability Through Private Ordering: Notes on a Japanese Experiment. University of Pennsylvania Law Review, 1996., Available at SSRN:

J. Mark Ramseyer (Contact Author)

Harvard Law School ( email )

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