500 words !!

Amaiya Anderson

Professor Rankin

Management 3300-08

09 September 20212

Week 2 and 3: Chapter 7 Assignments

Part One

Fraud: Fraud is intentionally knowing the causes of harm and is intentional.

intentional misrepresentation: this is similar to fraud, intentional using or saying the wrong information knowing the truth

Misstatement: a misstatement can be considered lacking or missing information

material fact: an important fact that can be seen. People would recognize a decision to be made.

Scienter: the courts find there is something wrong with a contract.

privity: a legal relationship between people.

damages interference with contract: damages within a contract that leads to interference

interference with prospective advantage: an unfair business practice that interferes with a business relationship

product liability: this is when a manufacturer is responsible for a product's safety to ensure that injuries don’t occur.

privity of contract: only involves people within the contract which means that no one can interfere.

caveat emptor: the buyer is responsible for inspecting a product before it is purchased.

reasonable care: being cautious of self and others

strict liability: a standard liability that involves holding a person legally responsible

warranty: a written guarantee that can be referred as the root of a contract

express warranty: gives you what is guaranteed or what is being expressed in certainty.

implied warranty: a legal term that will give assurances. It can be verbal and/or written.

Misrepresentation: Presenting as something or someone else that isn’t truthful.

failure to warn: this is a let down of letting someone know

design defect: a product may be made correctly but there are still dangers to consumers.

unknown hazard: a danger that was unexpected

joint and several liability: if one or more manufacturers have combined both parties to be held responsible. One or the other or both will be owed.

bulk-supplier doctrine: this doctrine allows the manufacturer to not be responsible in some cases for the receiving end of bulk products.

sophisticated user: someone who has experience within the legal field.

ultrahazardous activity: an unavoidable risk that causes harm to someone.

Part Two

Azar v. Lehigh Corp.

According to the case given, the issue at hand is that the appellant, a former employee at Lehigh Corporation, was following prospective customers to the Lehigh motel and persuading them to purchase property from him at a lower price. According to the case study, it can be argued that Azar was using the connection he had with clients while at Lehigh Corporation to persuade clients to buy property from him. Interference with business relations is a type of tort where a third party intentionally acts to cause one party in a business relation to violate business relations with another party. Azar took advantage that he was working with Lehigh and he had contact with his former clients. He took the opportunity to use the name of his former company to do business for his own benefits.

However, Azar did not have any existing contract with his former company. His actions can be described as tortious interference, which occurs when a party interferes with an advantageous business relationship with another party. Azar interfered with an advantageous business relationship with Lehigh Corporation for personal benefits, which may have caused harm to the company. Lehigh had the grounds to sue Azar for tortious interference. The grounds on which the court gave an order to restrain and enjoin Azar from directly or indirectly contacting or soliciting customers was based on the advantageous relationship that Azar had with his former employer. Complains by the company are broader in scope, but it is evident that the defendant leveraged the relationship he had with the company to pursue customers belonging to the company.

However, tortious interference with a business relationship is an intentional act and is usually hard to prove. Most of the ruling by the court are based on assumptions and circumstances under which the interference happened. For instance, when there is no valid contract existing between the parties it is hard to prove tortious interference with a business relationship. The fact that Azar worked for Lehigh Corporation is enough evidence to prove business relationship. The court had to prove that the defendant intentionally and without justification interfered with the business relationship. In addition, for Azar to be held accountable for violation of the business relationship, Lehigh Corporation must have proved that the interference resulted in financial harm to the business. It must have been proved that persuading customers by Azar caused financial harm to Lehigh Corporation.

Despite the fact that Azar may not have acted intentionally, he must have been aware that his actions would cause harm to his former employer. However, Azar did not owe Lehigh duty of care since he was no longer an employee of the company and there was no enforceable contract. There are two main types of tortious interference related to business relationships. First is interference with prospective economic advantage and interference with contractual relations. Interference with prospective economic advantage may involve anything from a vast array of economic relationships such as contracts. In the case provided, Azar interfered with the economic relationship between the plaintiff and its customers. Azar, a competitor and a former employee at Lehigh would watch buyers at Lehigh, contact them at the motel and pursue them that under federal law, they had three days to cancel any contract they had with the company, and instead show them a less expensive property that he was selling.

Lehigh had a valid claim to call for Azar to be ordered to keep away from Lehigh’s customers and premises because it interfered with its business. The ruling by the court to restrain and enjoin Azar is justifiable. Since customers would think Azar was still working for Lehigh, they had no doubt to believe anything Azar told them and do business with them. In this case, the action would cause financial harm to Lehigh since the company would lose clients who purchased property from Azar at a cheap price. The court ruled in favor of the plaintiff that the defendant is restrained and enjoined from directly or indirectly contacting or soliciting the plaintiff’s perspective or actual customers on the premises of the Lehigh resort motel or at the sales offices of the complainant. Azar would be allowed to engage clients who have not been contacted by Lehigh Corporation, either directly or indirectly to view Lehigh commercial property.

It can be concluded that the ruling by the court was justifiable since Azar was using his previous business relationship with Lehigh to persuade clients to purchase property at a cheaper price. Since he was pitching clients within Lehigh’s premises, it is evident that he was targeting clients that had been invited by Lehigh to view its commercial property. Azar took advantage of the relationship to steal customers from Lehigh thus violating the business relationship with the company.

Reference

Azar v. Leigh Corp., 364 So.2d 860, Dist. Ct. App., Fla (1978).

Part Three

Case Analysis: Todd v. Societe Bic, S.A

Todd v. Societe Bic is a prime example of cases about the Strict Product Liability and Defective products laws. The laws seek to hold product manufacturers responsible for unreasonably dangerous products. The current analysis pursues substantiating the courts’ ruling and holding of the ruling in the appeal. On both occasions, the court ruled in the defendant’s favor. A holistic analysis of the judgments reveals no errors because the lighter “was not unreasonably dangerous” and the "KEEP OUT OF REACH OF CHILDREN” warning was adequate under the consumer contemplation test and the warning theory, respectively.

Todd v. Societe Bic involved the death of a 2-year old Tiffany Todd. A 4-year Cori Smith used a Bic lighter to light some papers in the bedroom. Eventually, there was a fire outbreak, which claimed Todd’s life. Todd’s estate sued Bic. However, the district court granted summary judgment against the claimants ruling that the lighter “was not unreasonably dangerous. The claimants appealed, and on hearing the appeal, the court affirmed the district court's ruling, arguing that the "KEEP OUT OF REACH OF CHILDREN" warning on the lighter was adequate and proved the defendant’s exercise of the duty to warn.

The Consumer Contemplation Test

The consumer contemplation test distinguishes defective merchandise from the cosmos of good commodities, which may cause harm. The test determines if a product was unreasonably dangerous or not. Under its jurisdictions, a production is faulty or unreasonably dangerous if its performances fail to meet the ordinary consumers’ expectations. Hence, rubber-soled shoes would not be unreasonably dangerous because an individual wearing them would slip on a wet floor. The rationale derives from Fanning v. LeMay, 38 Ill.2d 209, 230 N.E.2d 182, 184 (1967): “it is a matter of common knowledge that shoes are more likely to slip when wet than dry.” On the contrary, if a hammer breaks while striking an iron, putting a metal piece into the user's eye, the hammer is unreasonably dangerous. The rationale derives from Dunham v. Vaughan & Bushnell Mfg. Co., 42 Ill.2d 339, 247 N.E.2d 401 (1969): “ordinary users do not anticipate hammers to crumb on impact.”

The data leads to a seminal question in the Todd v. Societe Bic case: what does an ordinary consumer expect when purchasing lighters? They expect the lighter to produce a flame when activated, and this is precisely how the Bic lighter, in this case, performed. However, an individual used it to do more; he ignited some papers with the flame, instigating a fire outbreak.

The ordinary user expects that if they subject combustible materials to the lighter’s flame, a larger fire will follow, making the lighter dangerous. Nonetheless, it does not make it unreasonably dangerous because the fire resulted from its possible misuse. According to the Illinois Supreme Court in Hunt v. Blasius, 74 Ill.2d 203, 23 Ill.Dec, 574, 578, 384 N.E.2d 368, 372 (1978), essentially all commodities can be harmful and injurious when subjected to certain uses or misuses. Damages are not compensable in product liability if they stem purely from a product's inherent chattels, which are apparent to all who encounter them. The harms must originate from a distinct fault in commodity, a flaw, which exposes those involved in the product to an unreasonable risk of injury. The factor that lighters start fires is among their primary inherent properties: this fact does not violate consumer expectations but rather fulfills them. As such, under the consumer contemplation test, a lighter, which does no more than cause a small flame, “is not unreasonably dangerous.” For this reason, the court did not err in granting a summary judgment in favor of the defendant.

The Warning Theory

In the appeal, Plaintiff argued that Bic should have cautioned their consumers about the risks, which lighters pose to households with children, and that it should have designed and manufactured its lighters to resist children's endeavors to use them. Bic uses the warning "KEEP OUT OF REACH OF CHILDREN" in bold. The defendant also contended that Illinois laws do not require producers to make child-resistant products when parents may take adequate precautions. However, the Plaintiff argued that the warning was insufficient because Bic did not inform parents that children aged 3-5 are attracted to flame and unable to follow instructions, among other things.

Such secondary warnings are, of course, possible. Nevertheless, extended notifications table various difficulties. For example, Hay and Spier (2004) argue that including more text on a product the more text reduces the font; hence, visibility and impression on consumers. Only brief and bold notices can be effective. Hay and Spier (2004) illustrate that long chapters in capital letters are almost indecipherable while long sections in lower case letters only come out as boilerplate. More so, it is highly unfeasible that smaller and more subtle points would influence consumers who disregard a bold and effective warning. For this reason, the court was correct that the "KEEP OUT OF REACH OF CHILDREN” warning was adequate; hence, giving a summary judgment in favor of the defendant.

References

Hay, B., & Spier, K. (2004). Manufacturer liability for harms caused by consumers to others. https://doi.org/10.3386/w10972