Warranty, Product Liability and Transaction Structure: The Problem of Amazon

Abstract

Amazon, and other internet sales platforms, have revolutionized the manner in which goods are purchased.' This was true even before the current pandemic. While the centrality of Amazon in the sale and distribution of consumer goods in America is now in high relief, the obligations undertaken by Amazon in those sales are unclear, both as a matter of transparency, and as a matter of legal doctrine. Is it a store? Is it a shipper? Is it a telephone? In various transactions Amazon can play some or all of these roles. Choosing the right metaphor has consequences. Amazon knows this and has done everything it can to deploy the metaphors selectively to its best legal and practical advantage, even when the chosen characterizations are inapt or even mutually inconsistent.

Consumer goods of all sorts are sold using the Amazon platform. Some are sold directly by Amazon or its subsidiaries such as Whole Foods, but many goods sales are, Amazon argues, merely intermediated. Buyer and seller find each other on the Amazon platform; Amazon merely facilitates their transaction. Sometimes, however, items bought through the Amazon platform explode. E-Cigarettes and hoverboards have caught fire. Faucets have malfunctioned flooding houses, and dog collars have snapped. In these cases, Amazon has claimed to be a stranger to the transaction, and until recently, courts have been willing to go along.' In an earlier article, we explored whether Amazon should be considered a "seller" for the purposes of product liability when a customer purchases goods from a third-party seller using the Amazon platform.' 2 We concluded that the answer was, "Yes." We examined the relationship between Amazon and the third-party seller, and considered the extent to which Amazon controlled all aspects of the sale.' We also noted, to a lesser extent, the way in which the consumer experienced the sale process."

The purpose of this article is, to extend that analysis to include the law of contracts-principally the law of warranty. We ask the next question: Should Amazon be considered a "warrantor" for the purposes of making the implied warranty of merchantability when it serves as an intermediary between a third-party seller and a consumer buyer?