The rule of strict products liability in section 402A of the Restatement (Second) of Torts is widely assumed to have been formulated to address manufacturing defects. Relying on this assumption, the Restatement (Third) of Torts defines manufacturing defects as departures from the product’s design and therefore from the manufacturer’s manifest intent. Because virtually all product malfunctions stem from manufacturing defects, the Third Restatement extended this logic to define malfunctions as departures from manifest intent as well. This move effectively discards the section 402A consumer expectations test as a redundant relic from the early days of products liability.

This Article offers an in-depth conceptual, normative, and doctrinal examination of tort liability for foundation model development and release. It provides a qualified defense of the tort of negligence – the common law’s broadest and most flexible cause of action – as the principal doctrinal foundation of the tort system’s governance of this novel domain.

The opacity of AI decision-making has led many tort scholars to conclude that ordinarily it will be infeasible to prove negligence or defect-based forms of products liability for AI-caused harms. According to mainstream tort theory, this evidentiary hurdle justifies strict enterprise liability for commercial AI distributors. Fully internalizing injury costs within these business enterprises adequately incentivizes them to adopt reasonably safe practices while relying on their liability insurance policies to efficiently and fairly compensate accident victims. Mainstream theory, however, decisively biases the analysis in favor of strict enterprise liability by not accounting for how the expansion of liability would substantially increase the cost of compensating injuries through insurance mechanisms.