Products liability refers to the liability of any or all parties along the chain of manufacture of any product for damage caused by that product. This includes the manufacturer of component parts (at the top of the chain), an assembling manufacturer, the wholesaler, and the retail store owner (at the bottom of the chain). Products containing inherent defects that cause harm to a consumer of the product, or someone to whom the product was loaned, given, etc., are the subjects of products liability suits. While products are generally thought of as tangible personal property, products liability has stretched that definition to include intangibles (gas), naturals (pets), real estate (houses), and writings (navigational charts).

Products liability claims can be based on negligence, strict liability, or breach of warranty of fitness depending on the jurisdiction within which the claim is based. Many states have enacted comprehensive products liability statutes. These statutory provisions can be very diverse, such that the the United States Department of Commerce has promulgated a Model Uniform Products Liability Act (MUPLA) for voluntary use by the states. There is no federal products liability law.

In any jurisdiction one must prove that the product is defective. There are three types of product defects: design defects, manufacturing defects, and defects in marketing. Design defects are inherent; they exist before the product is manufactured. While the item might serve its purpose well, it can be unreasonably dangerous to use due to a design flaw. On the other hand, manufacturing defects occur during the construction or production of the item. Only a few out of many products of the same type are flawed in this case. Defects in marketing deal with improper instructions and failures to warn consumers of latent dangers in the product.

Products liability is generally considered a "strict liability" wrong. Strict liability wrongs do not depend on the degree of carefulness by the defendant. Translated to products liability terms, a defendant is liable when it is shown that the product is defective. It is irrelevant whether the manufacturer or supplier exercised great care; if there is a defect in the product that causes harm, he or she will be liable for it.

The law of products liability is found mainly in common law of torts (state judge-made law) and in the Uniform Commercial Code. Article 2 of the UCC deals with the sale of goods and it has been adopted by most states. In it, the most important products liability sections are the implied and express warranties of merchantibility in the sale of goods, §§ 2-314 and 2-315.

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