7-1 Final Project: Submit

Product Liability

Product liability refers to the legal obligation that falls on the shoulders of the maker or seller of an item to reimburse any customer who sustain injuries as a result of using that product. Product liability law varies from country to country, but there are generally three types of product liability claims: manufacturing defects, design defects, and warning defects. A manufacturing defect is a flaw in the manufacturing process that makes the product unsafe. A design defect is a flaw in the design of the product that makes it unsafe (Beatty et al., 2018). A warning defect is a lack of adequate warnings or instructions on the product that makes it unsafe. There are several product liability issues present in the case of Fred's Miracle Cough Syrup. First, there is a risk that the product may not be effective. If the cough syrup does not work as advertised, Fred could be sued for false advertising. Second, there is a risk that the product may cause adverse side effects. If Fred's cough syrup causes any injuries or illnesses, he could be sued for personal injury or wrongful death. Third, there is a risk that the product may be counterfeit. If Fred's cough syrup is not the real thing, he could be sued for fraud. Finally, there is a risk that the product may be mislabelled. If the labels on Fred's cough syrup are inaccurate or misleading, he could be sued for false advertising or misleading marketing.

There are several steps Fred can take to mitigate the risks associated with his product. First, he should ensure that his product is effective. He can do this by conducting clinical trials and/or hiring an independent testing company to test his product. Second, he should ensure that his product is safe. He can do this by conducting safety testing and/or hiring an independent safety testing company to test his product. Third, he should ensure that his product is correctly labelled. He can do this by hiring a professional labelling company to create his labels. Finally, he should take steps to ensure that his product is not counterfeit. He can do this by trademarking his product and/or hiring a professional anti-counterfeiting company to protect his product.

Agency Relationship

The legal concept of agency alludes to the link that exists between two or more individuals, who are collectively referred to as agents, in which one of them performs an action on behalf of the other, who is referred to in this context as the principle. In the same vein, one may also operate in favour of either the firm or the government in certain circumstances based on the contract that was agreed upon. In most cases, the agent as well as the principle are the parties involved in this relationship; nevertheless, none of these parties can legitimately claim to act as the agent of the other within the context of this formation. Consequently, the agency law in the situation of Sam and Fred as described in the case remained absent as the former acted merely as a worker to the parent, in this scenario Fred, regardless of the fact that Sam later acquired half ownership of the business (Beatty et al., 2018). Prior to and even after the development of the company, Sam's participation in this firm does not always result in the construction of an agency relationship with Fred. This is mostly due to the absence of any kind of agreement between the two parties, which would allow one to act in the other's place whilst the other is away and prevent Sam from pretending to fulfil Fred's obligations.

Real Property

The location of the company, a family farm in this instance, presents possible real estate concerns. There could be potential zoning issues if the farm is located in a rural area that does not allow for commercial businesses. Zoning regulations are put in place to control the development of land and protect the health and well-being of the community. If the farm is located in a rural area that does not allow for commercial businesses, this could limit Fred's ability to operate his business and sell his cough syrup. There could also be issues with the property title if the farm has been in the family for generations and is held in trust. If the farm has been in the family for generations and is held in trust, there may be restrictions on how the property can be used (Beatty et al., 2018). These restrictions could limit Fred's ability to use the property for his business. Secondly, there may be problems with running the business if the necessary permission to do so on this land isn't in place. Fred would need the license in order to legally run his business in the city. Thirdly, it would be difficult to enforce the requirement that the home-based company be located on the family's property. It would entail, among other things, making sure there is enough room to grow into the property that personnel have easy access to the building, and that utilities are set up in a way that works for them.

Manufacture

Yes, the manufacture of Fred's Miracle Cough Syrup on the family farm does necessitate a formal transfer of ownership or possessory rights. This is because when Fred manufactures the cough syrup on the farm, he is using farm resources to do so. Therefore, he needs to formally transfer ownership or possessory rights in order to use the farm resources for his business. Some of the resources that Fred would need to use in order to manufacture his cough syrup on the family farm include the land itself, any buildings or structures on the property, and any equipment or machinery that is needed. In order to use these resources, Fred would need to get permission from the owner of the farm (likely his parents or grandparents). Once he has obtained this permission, he can then go about setting up his business (Beatty et al., 2018). There are a few different ways that Fred can go about transferring ownership or possessory rights to the family farm resources. One option is to simply lease the land from the owner. This would give Fred the right to use the land for his business for a set period of time, after which he would need to renew the lease or return the land to the owner. Another option is to purchase the land outright from the owner. This would give Fred full ownership of the land and he would not need to renew the lease or return the land at the end of the lease period. Another option for Fred is to enter into a partnership with the owner of the farm. This would involve both parties sharing ownership of the land and any resources on it. The partnership agreement would need to be drawn up in order to specify the rights and responsibilities of each party.

Personal Property

Sam's car being used to transport the goods raises a number of questions about ownership of various items. Vehicle liabilities are one concern, as accidents as well as other types of damage are unfortunately possible in the line of duty. If an accident were to occur while making deliveries or performing other tasks directly linked to the company's operations, it would be Fred and Sam's responsibility to make sure the vehicle was adequately insured. Also, as noted by Bian et al., (2018) well-crafted vehicle policies would be essential in preventing the car that in this case acts as the means of transportation of items, from being used for purposes unrelated to the company. Finally, using Sam's car to convey the products to customers would have tax implications. As a result, Sam will need to keep meticulous records of the company's expenditures. In the event that Sam does not get compensation for Fred's use of his vehicle, he will be able to deduct this expense from his taxable income by keeping meticulous records.

Liability Issues

When Sam's vehicle is used for business-related deliveries, both Sam and the company are put in a position where they could be held liable for a variety of negligence-related liabilities. These liabilities could, in most circumstances, range from hiring and retaining employees all the way to the actual servicing of Sam's car. In this context, negligent recruiting refers to a circumstance in which a party engaged in an accident may prosecute the owner of the business for potentially hiring an inexperienced driver and deciding to keep them despite the fact that they were involved in creating an accident (Beatty et al., 2018). Therefore, prior to hiring Sam, Fred needs to perform the necessary research to guarantee that Sam is still competent for the job. The term "negligent lending" refers to the practice of extending driving privileges to those who do not meet the requirements, in this case to unsuitable employees who are aware of their circumstances. If Fred was cognizant of Sam's health situation at the time of the accident, this would indicate that he should still be held responsible for the incident. It is considered negligent maintenance when one does not take the necessary precautions to guarantee that the delivery vehicle is kept in a safe condition at all times.

Estate Planning

Some potential estate planning difficulties include a lack of an extensive strategy, the absence of professional engagement, and the absence of regular evaluations. In the first case, the state statutes would step in after the demise of the proprietors to fill the void left by the absence of a detailed plan. Here, Fred needs to make sure there's a solid strategy in place for what to do after the heirs are gone. As for the second concern, the company's demise is guaranteed if its owners refuse to seek professional assistance in running the company. As a result, Fred must pursue and pay for specialist counsel on the management of this company, including its web appearance, rather than restricting service to relatives. The third aspect of performing reviews describes the company's standing. Consequently, the proprietors of this organization, led by Sam, should adhere to this procedure strictly to prevent its eventual demise.

Transfer Ownership

If Fred and Sally want to make sure that both Sam and Lilly benefit from the family business, they can use estate planning tools like trusts and family limited partnerships. Trusts are useful in this situation because they allow Fred and Sally to transfer ownership without giving up access to their riches while they are still alive (Beatty et al., 2018). The drawback is that Sam and Lilly will not be able to enjoy all the advantages of the land throughout their parents' lives. Fred and Sally will benefit from the family limited partnership since they will not have to give up control of the business following the transfer, whereas Sam and Lilly will suffer the opposite fate.

Business Entity

Following a condensed investigation into the concerns raised up top, it has become clear that operating a firm as a sole proprietorship is the most prudent course of action. Since the company is not very large at the moment, it is hoped that Fred will be able to expand it more quickly and then hand Sam some of the company's ownership.

Best regards,

Jennifer Moore

References

Beatty, J. F., Samuelson, S. S., & Abril, P. (2018).  Essentials of Business Law. Cengage Learning.

Bian, Y., Yang, C., Zhao, J. L., & Liang, L. (2018). Good drivers pay less: A study of usage-based vehicle insurance models.  Transportation research part A: policy and practice,  107, 20-34.

Nurumov, D. (2020). Role and Importance of Advocacy In Legal Support Of Business Entities.  The American Journal of Political Science Law and Criminology,  2(12), 117-122.

Xue, Y., Temeljotov-Salaj, A., Engebo, A., & Lohne, J. (2020). Multi-sector partnerships in the urban development context: a scoping review.  Journal of Cleaner Production, 122291.