An Analysis of Liability and Bailment in Business Law Context

This case study addresses two distinct legal issues within the realm of business law: product liability and bailment. The first part supports Mr. John Smith's claim against Hot Coffee for failing to warn customers about the drink's unsafe temperature for handling or microwaving, arguing that the company's negligence in providing adequate warnings constitutes a breach of duty, leading to injury and entitling Mr. Smith to damages. The second part analyzes bailment under Florida law, referencing relevant court cases to clarify the requirements for establishing a bailor-bailee relationship, particularly focusing on the necessity of mutual benefit between the parties involved; the analysis emphasizes that a bailment contract cannot be formed without proof of mutual benefits accruing to both parties, which affects the standard of care expected.

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Business Law Assignment

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1Discussion 2.
In this paper, the arguments made by Mr. John Smith will be supported who has
brought a complaint against Hot Coffee for its failure to put a warning label on its
product to warn the customers that it is not over or microwave safe. Product liability is
referred to a legal liability which can be imposed on the manufacturer or trader for
producing or selling a faulty product (Tech Policy Lab, University of Washington). As
per this law, it is necessary that the product must satisfy the basic expectations of a
consumer. The product liability can be categorised into three types which include
design defects, manufacturing defect and marketing defendant. Liability is imposed on
the manufacturers to ensure that they give warning to their customers that must
identify the risk and provide policies regarding how to avoid them (Chen and Hua
845-866). The inadequate warning was present because of the negligence of Hot
Coffee. A duty was owed by the company towards its customers to put adequate
warning which identifies the risk and provide a procedure to avoid them. A reasonable
care is not maintained by the company which is expected from a manufacturer. Due to
the breach of duty by the company, the injury was suffered by Mr. John Smith based
on which he has the right to demand damages from Hot Coffee.

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Discussion 2.2
Under Florida Law, a bailment is defined as a contractual relationship which is formed
between parties in which the subject matter of the relationship is transferred and
acceptance by one party to another on a temporary basis. This definition was given by
the court in the judgment of Surety Bank v. Dunbar Armored, Inc. The court further
provided that since the property is transferred temporarily, it is important that another
person must be entitled to receive it after the bailment is discharged. Thus, the
intended delivery of goods to a third party who is entitled to receive the goods did not
define as a bailor-bailee relationship (Govinfo). This relationship can be formed
through an express or implied contract, and it is formed for the mutual benefits of
parties.
In the case of A & D International v. United States of America and M & H Brokerage,
Inc. 665 F.2d 669 (5th Cir. 1982), the court provided that a bailment is not present
between the parties. It was held by the court that both appellant and the appellees
provided arguments under the Florida law in relation to bailment by providing that
since the goods were in possession, the bailee was under the obligation to exercise
ordinary care to protect the goods (Justia). However, the court provided that the
plaintiff did not prove the elements of bailment are present in this case. The mutual
benefit was not present between parties, and the only benefit was present to the
appellant is a shift of a burden to the defendant. Confusion is caused because the case
is similar to bailment analogies; however, after its bailment analysis under the Federal
Tort Claims Act and the Tucker Act, it was held that a bailment contract is not formed
between parties. Therefore, a bailment contract was not formed due to lack of mutual
benefits based on which the standard of ordinary care cannot be imposed on parties.

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Works Cited
Tech Policy Lab, University of Washington. What is Product Liability?. 15 Mar.
2016. Web video. 15 Feb. 2019. < https://www.youtube.com/watch?
v=BnU3sidMlls&feature=youtu.be>.
Justia. A & D International, Inc., a Florida Corporation, Plaintiff-appellant, v. United
States of America and M & H Brokerage, Inc., defendants-appellees, 665 F.2d
669 (5th Cir. 1982). Web. 15 Feb. 2019.
<https://law.justia.com/cases/federal/appellate-courts/F2/665/669/408063/>.
Chen, Yongmin, and Xinyu Hua. "Ex ante investment, ex post remedies, and product
liability." International economic review53.3 (2012): 845-866.
Govinfo. Surety Bank v. Dunbar Armored, Inc. 2015. Web. 15 Feb. 2019.
<https://www.govinfo.gov/content/pkg/USCOURTS-flsd-9_14-cv-81368/pdf/
USCOURTS-flsd-9_14-cv-81368-0.pdf>.