CHAPTER 45

FORMERLY

SENATE BILL NO. 65

AN ACT TO AMEND TITLE 18, DELAWARE CODE RELATING TO INSURANCE AND A SEALED CONTAINER DEFENSE IN PRODUCT LIABILITY.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend Title 18, Delaware Code by adding a new Chapter 70 thereto which shall read as follows:

"CHAPTER 70. SEALED CONTAINER DEFENSE IN PRODUCT LIABILITY

§7001. Sealed Container Defense in Product Liability

(a) In this Section, the following words have the meanings indicated.

(1)(1) 'Manufacturer' means a designer, assembler, fabricator, constructor,

compounder, producer, or processor of any product or its component parts.

(ii) 'Manufacturer' includes an entity not otherwise a manufacturer that

imports a product or otherwise holds itself out as a manufacturer.

(2) 'Product' means any tangible article, including attachments, accessories
and component parts and accompanying labels, warnings, instructions and packaging.

(3) 'Sealed container' means a box, container, package, wrapping, encasement
or housing of any nature that covers a product so that it would be unreasonable to expect a seller to detect or discover the existence of a dangerous or defective condition in the product. A product shall be deemed to be in a sealed container if the product, by its nature and design, is encased or sold in any other manner making it unreasonable to expect a seller to detect or discover the existence of a dangerous or defective condition.

(4)(1) 'Seller' means a wholesaler, distributor, retailer or other individual or entity other than a manufacturer that is regularly engaged in the selling of a product whether the sale is for resale by the purchaser or is for use or consumption by the ultimate consumer.

(ii) 'Seller' includes a lessor or bailor regularly engaged in the business of the lease or bailment of the product.

(5) 'Similar product' means another article of the same design produced by the same manufacturer.

(b) Elements of defense to action against product's seller. It shall be a defense to an action against a seller of a product for property damage or personal injury allegedly caused by the defective design or manufacture of a product if the seller establishes that:

(1) The product was acquired and then sold or leased by the seller in a sealed container and in unaltered form;

(2) The seller had no knowledge of the defect;

(1) The seller in the performance of the duties he performed or while the product was in his possession could not have discovered the defect while exercising reasonable care;

(1) The seller did not manufacture, produce, design or designate the
specifications for the product which conduct was the proximate and substantial cause of the claimant's injury; and

(2) The seller did not alter, modify, assemble or mishandle the product while in the seller's possession in a manner which was the proximate and substantial cause of the claimant's injury; and

(1) The seller had not received notice of the defect from purchasers of
similar products.

(c) Defense not available. The defense provided in Subsection (b) of this Section is not available if:

(1) The claimant is unable to identify the manufacturer through reasonable effort;

(2) The manufacturer is insolvent, immune from suit, or not subject to suit in Delaware; or

(3) The seller made any express warranties, the breach of which were the proximate and substantial cause of the claimant's injury.

(d) Summary judgment; reinstatement of action.

(1) Except in an action based on an expressed indemnity agreement, if the seller shows by unrebutted facts that he had satisfied Subsection (b) of this Section and that Subsection (c) of this Section does not apply, summary judgment shall be entered in his favor as to the original or third party actions.

(2) Notwithstanding the granting of a motion for summary judgment pursuant to Subsection (d)(1) of this Section, the seller will thereafter continue to be treated as though he were still a party for all purposes of discovery including the uses thereof.

(3) On a subsequent showing of the occurrence of any condition described in Subsection (c) of this Section or that one or more of the conditions of Subsection (b) of this Section did not exist, during the pending litigation, the actions dismissed by summary judgment pursuant to Subsection (d)(1) of this Section shall be reinstated and are not barred by the passage of time."

Approved June 18, 1987.