Business Law the Objective of This Work

Business Law

The objective of this work in writing is to examine the case study and to answer the three following questions based on the information provided and the relevant consumer laws governing such defective product purchases.

Paul Price is clearly concerned about the Tefal Actifry. Explain to Paul Price about his rights regarding the Sale of Goods Act 1979 (amended). In your answers you are required to refer to the relevant sections of the Sale of Goods Act (SOGA) and relevant case law. Assuming the shop where the purchase was made had included an exclusion clause limiting liability briefly explain whether the company could rely on this clause.

The Sale of Goods Act (1979) is applicable to contracts of sale of goods which is where the "seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price." (Sale of Goods Act, 1979) The contract may be either "absolute or conditional." (Sale of Goods Act, 1979) Where under a contract of sale 'the property in the goods is transferred to the seller by the buyer the contract is called a sale." (Sale of Goods Act, 1979) In regards to implied terms about quality or fitness the Sale of Goods Act (1979) states as follows:

"Subject to this and any other Act, there is no implied condition or warranty about the quality or fitness for any particular purpose of goods supplied under a contract of sale. Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller's skill or judgment, and the goods are of a description which it is in the course of the seller's business to supply (whether he is the manufacturer or not), there is an implied condition that the goods will be reasonably fit for such purpose, except that in the case of a contract for the sale of a specified article under its patent or other trade name there is no implied condition as to its fitness for any particular purpose." (Sale of Goods Act, 1979)

In the event that the individual chooses to file a lawsuit against the seller of the product, it is necessary to understand that if the seller was provided an indemnification clause by the manufacturer to hold them harmless from any product defects that the seller will also likely be filing suit against the manufacturer for damages that the individual might be awarded in the lawsuit.

Question 2 - Dave and Sandra (Paul's parents) suffered burns and a lung infection from smoke inhalation. As a result Sandra a keen gardener has not been able to work in her garden and Dave has not been at work for over a month. The kitchen will also need to be re-decorated. Paul and his parents are convinced that their condition was caused by the faulty Actifry chip fryer. Explain to Dave and Sandra the relevant principles of tort law; advise them on the course of action that could be taken, and whether Tefal has any liability for negligence in relation to them.

A products liability lawsuit enables the individual to prosecute a case against reckless, incompetent or negligent manufacturers. Product defect cases are based on strict liability rather than on negligence. Even where the manufacturer exercised the standard of great care, a defect in the product results in the manufacturer retaining liability which means that the consumer does not have to prove fault on the part of the defendant but instead has to prove that the product was unreasonably dangerous or defective and that an injury resulted from the product. Product claims can be brought under three primary theories including:

(1) Design defects in which liability arises due to an oversight or mistake in the product design resulting in the product being dangerous when use as it was intended;

(2) Manufacturing defects in which liability arises from a defect that results during the process of manufacturing; and (3) Marketing defects involves such issues as failure to provide adequate warning labels or instruction, which may result in the user failing to recognize a defect in the product or being unaware of how the product should be safely used. (Larson, 2005)

There is more than one theory of liability available to the individual in a defective product case including the following:

(1) Negligence -- the individual must be able to prove that the parties who placed the product into commerce had a duty to make provision of goods that would be fit for the foreseeable use of those goods and that they would have detected the defect with exercising reasonable care in the design, manufacturing, marketing, distribution and sales process.

(2) Breach of Warranty -- this is a contract of fitness that exists between the manufacturer or vendor and its customer. Under this type of claim the individual can allege that the actual written warranty associated with a product was violated and under the implied warranty theory, the individual alleges that while there is no express warranty or that the defect alleged is not covered by the express warranty, a defect in the goods results in them being unfit for the intended purpose.

(3) Strict Liability -- Where strict liability applies the plaintiff has to only establish that a product is defective. Once the product is established defective liability results from that fact only no matter what level of care the manufacturer applied during the product's design, manufacture, marketing, distribution and sale of the product. (Larson, 2005)

Question 3 - With regard to the law of contract, advise Paul whether there was a legally binding contract between him and the shop which sold him the chip fryers, and if so, when the contract became binding and why. You must refer to relevant cases to support your advice.

Under the Sales of Goods act 1979 the goods must be fit for their normal purpose. If a good does not conform to contract and is faulty the consumer is entitled to a claim for repair or replacement of the good and may either keep the goods and claim a price reduction if repair or replacement is not possible or may return the goods and claim a full or partial refund. In the case of Panatol Corporation v. Emerson Electric Company No. 04-03-00547-CV it is stated as follows: