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Who is Liable for a Defective Product Bought on Amazon?

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Who is Liable for a Defective Product Bought on Amazon?

liable amazon defective product

Effective September 1, 2021, Amazon will compensate customers who suffered injuries or property damage from a defective product bought on their platform. This includes those purchased from a third-party seller. For claims under $1,000, which accounts for eighty percent of cases, Amazon will pay customers directly. Third-party sellers generate over half of Amazon’s sales. To sell their product, third-party sellers must adhere to the terms of the Business Solutions Agreement and the Conditions of Use, which restrict Amazon’s liability. For more information on who is liable for a defective product on Amazon, please continue reading, then reach out to AVASK Group today.

Why can’t customers hold Amazon liable for defective products?

As opposed to most retailers, Amazon has the unusual legal status of being half-platform, half-store. In terms of liability, Amazon has argued that customers and sellers have the ability to connect through their platform and that Amazon functions as the intermediary. From a legal perspective, this allows Amazon to avoid the liability that conventional retailers face.

Why could a third-party Amazon seller face liability for a defective product?

Third-party products sold in the Amazon Marketplace are often less expensive, less controlled and, quite often, less reliable than other products. Amazon does not assume liability if the product is defective because the government considers Amazon a platform for those products rather than the actual seller. Because they are not separated on the website, customers often miss the difference between products sold in Amazon’s main retail store and products sold in the Marketplace. Courts have not yet decided whether they should increase Amazon’s liability for products sold by third-party sellers.

How does a customer prove a third-party seller is liable for a defective product?

In order to hold you, the third-party seller, liable for a defective product, the customer must prove:

  • The product they purchased is unreasonably hazardous
  • The customer suffered an injury
  • The defective product directly caused the injury

If you have any further questions about this or other Amazon-related topics, please reach out to Timothy E. Nelson, CPA immediately.

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If you are an Amazon seller and require the assistance of an experienced Certified Public Accountant, please contact Ebiz Accounting for an initial consultation.

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