Legal Definitions - risk-utility test

The risk-utility test is a method used to hold a manufacturerresponsible for product liability. If the evidence shows that a reasonable person would conclude that the benefits of a product's particular design versus the feasibility of an alternative safer design did not outweigh the dangers inherent in the original design, then the manufacturer can be held liable.

For example, if a car manufacturer designs a car with a faulty brake system that causes accidents, the manufacturer can be held liable if it is determined that a safer alternative design was feasible and the benefits of the faulty design did not outweigh the dangers.

Another example could be a pharmaceutical company that produces a drug with harmful side effects. If it is determined that a safer alternative was feasible and the benefits of the harmful drug did not outweigh the dangers, the company can be held liable.

These examples illustrate how the risk-utility test is used to determine if a manufacturer is responsible for product liability.