The legal rationale for warning labels
The law recognizes that it is reasonable to sell some products even though they are dangerous when used in a certain way. A most obvious and non-controversial example would be contraindications for drugs: “don’t take this drug while pregnant”, “don’t take this drug if you are also taking X”, etc.
Why labels usually don't help
People misuse products, sometimes in truly absurd ways. A favorite prank when I was in college was busting the nozzle on disposable butane lighters, and lighting the rush of butane that came out all at once. As I recall, nobody ever got burned by one of these party tricks (we called them "light sabers") but frostbite was common. Quickly emptying a butane lighter sucks up a lot of heat, converting the liquid butane to gas. Moral: don't try this at home, but if you do, wear gloves.
Why labels are used, even though it seems pointless
Basically, if there is a known risk, you have to tell the consumer about it. If you do, it is a complete defense to liability.
Some warnings make a lot more sense if you know the facts of the lawsuits which inspired them. For example, on hair dryers, you are sometimes warned not to use the dryer while sleeping. For a blow-dryer, this advice is ridiculous. However, before blow-dryers, hair dryers had different designs. Have you ever seen the space-helmet style dryers that used to be popular in salons? There used to be a home version of this, involving a blower attached to a plastic bag, like a shower cap. These were a lot less efficient than blow-dryers. They took a long time, and lulled people to sleep. Result: plastic bag melted on head. Ouch!
Speaking of hair-dryers, it took extensive litigation to convince blow-dryer makers to use GFI circuit breakers on all blow-dryers. Before GFIs were extensively used, an average of sixteen deaths by hair dryer electrocution occured each year. In 1992, the number was down to two electrocutions. When virtually all hair dryers in use will have GFI, the number may go down to zero.
When a product can be made safe, why should manufacturers be allowed to just slap a warning on a product to avoid liability? This is an unresolved legal issue in many states. The latest edition reference work for uniform tort laws, put out by the American Law Institute, reflects this change. See Restatement of the Law of Torts (Third Edition): Products Liability, Section 2.
How the Labels Could be Better
A study by J. Paul Frantz, an industrial and operations engineering doctoral candidate at the University of Michigan has shown that the typical warning label suffers from two major problems. Sally Pobojewski, “Product warning labels: how best to get the message across.” The University Record (Univ. Mich 1992).
Frantz studied how 80 undergraduate students used two household products, a drain cleaner and a wood sealant, which can be hazardous if used incorrectly. He used four sets of labels: a control, and three labels was changed to test the location of safety information, the explicitness of warnings, and whether instructions and warnings appeared as a paragraph or as a numbered list. Putting warnings and instructions in a numbered list did not seem to affect compliance with the safety precautions.
The location of safety information did make a difference. Safety warnings are often printed in a separate location on the label, frequently in a box in prominent, colored type. Franz found that the students tested ignored these warnings. The students tended to follow instructions embedded in the directions for use: it more than doubled the number of subjects who read the information, from 48 percent to 82 percent.
“ When I studied how people actually use product labels, however, I found that they were highly goal-directed,” Frantz stated “They tend to scan the label, focusing on the portion that helps them complete the task, and they filter out other information.”
Also, warnings stating instructions (“Open a window” instead of “Use only in a well-ventilated room.”) resulted in higher compliance.
Unfortunately, as this node shows, it isn’t easy to write a good warning label. Warning labels are written or approved by lawyers, who aren’t known for clear writing.