Results 1 to 3 of 3
  1. #1
    Join Date
    May 2018
    Posts
    1

    Default Liability of Freelance Design Engineer for Design Defects in Production

    My question involves malpractice in the state of: California

    This is a hypothetical, but quite reasonable, scenario that I (as a freelance electronics engineer) am often concerned about...

    A client hires me as a freelance contractor to design the electronic hardware of a new product. Let's say this is a rather simple design which I do and charge a total of $1k in design fees. I supply the client with samples to test in the end application and the manufacturing data so he/she can manufacture the product in volume when ready to do so. The client later manufactures 10k pieces (through a third party) spending $100k for the manufacturing and sells the final products at a profit. A few months down the line the products start failing systematically (becoming permanently unusable after the failure but causing no injury or other damage), and after inspection it is evident that the failure is due to a previously undetected design defect in the part that I designed (not a manufacturing defect). My client is forced to compensate or replace the failed units with a resulting financial impact.

    Assuming there is no relevant contract clause, what would be my liability in such a scenario? If it is clear that the issue is a result of a design mistake that, notwithstanding the extensive design stage testing, somehow slipped through, I can understand the client demanding a full or partial refund of the $1k design fees. However, the client had the samples to test with and verify their suitability in the end application and the act of getting the design to volume manufacturing is in itself (in my opinion) an approval of the design's suitability. So shouldn't the liability of my client towards his end customer stop at my client ? ...What I am trying to say is that while the design issue is clearly a direct result of my work, the magnitude of the damage is not and depends primarily on the quantities manufactured and sold by my client and my client's decision that the design was suitable for the end application in those quantities. It is easy to imaging how the magnitude of the financial loss can scale to huge sums as the production quantity increases with the original design fee being infinitesimally small by comparison.

    I would like some thoughts on this, never had a problem really but this scenario is a constant discouragement.

  2. #2
    Join Date
    Oct 2016
    Posts
    1,431

    Default Re: Liability of Freelance Design Engineer to Design Defects in Production

    First off anyone can sue anyone for anything. If they will be successful is the question.

    In product liability issues plaintiffs often sue every entity they can because they have nothing to lose by doing so and often much to gain.

    As a small contractor it really isn't the loss of the lawsuit that will bring you down it is simply the cost of defense that will do it.

    I strongly suggest you discuss with an insurance professional with expertise in your area for the proper Liability insurance. Also have a meeting with an attorney that specializes in the field.

  3. #3
    Join Date
    Mar 2013
    Posts
    15,492

    Default Re: Liability of Freelance Design Engineer to Design Defects in Production

    Quote Quoting fleng
    View Post

    I would like some thoughts on this, never had a problem really but this scenario is a constant discouragement.
    You could be 100% liable for your design defect no matter what. And even if you aren't, the cost of defending a lawsuit could put you in the poor house. And heaven help you if your design injures somebody.

    That's why you buy Professional Liability Insurance.

    If you can't afford it you can't afford to be in business.

    1. Sponsored Links
       

Similar Threads

  1. Patents: Will Adding to the Design of a Design Patent Support a New Patent
    By R92024 in forum Intellectual Property
    Replies: 1
    Last Post: 03-10-2018, 06:16 PM
  2. Patents: Can You Apply for a Similar Design Patent When Your Design Patent Expires
    By R92024 in forum Intellectual Property
    Replies: 1
    Last Post: 07-02-2016, 02:34 PM
  3. Copyright Law: Can You Sue Somebody for Using Your Design Ideas
    By joe morreale in forum Intellectual Property
    Replies: 5
    Last Post: 09-07-2014, 02:22 AM
  4. Patents: Design in the U.S
    By theorsays in forum Intellectual Property
    Replies: 1
    Last Post: 07-04-2011, 07:31 PM
 
 
Sponsored Links

Legal Help, Information and Resources