McDonald's Coffee Case: Product Liability and Consumer Rights

This case study examines the McDonald's coffee spill case, focusing on the legal and ethical implications of the incident. The analysis delves into the concept of product liability, specifically the breach of implied warranties of merchantability and fitness. It highlights the court's decision regarding McDonald's liability for serving coffee at a temperature deemed excessively hot and capable of causing severe burns. The study explores the role of corporate governance and social responsibility in preventing such incidents, including recommendations for preventive measures like lowering coffee temperatures and providing warnings to customers, especially senior citizens. It also touches upon the importance of consumer awareness regarding their rights and the impact of secret settlements on public knowledge of product liability cases. The case study references relevant legal concepts, including compensatory and punitive damages, and emphasizes the importance of businesses taking precautions to protect their consumers.

Running head: CORPORATE GOVERNANCE AND SOCIAL RESPONSIBILITY
Corporate governance and social responsibility
Name of the Student
Name of the University
Author Note

1CORPORATE GOVERNANCE AND SOCIAL RESPONSIBILITY
Question 7
McDonald’s was held liable to compensate the Ms. Liebeck. However, the parties entered
into a mediation procedure where they settled the matter in secrecy. It is speculated that Ms.
Liebeck have probably settled for a lesser amount than what she had initially claimed as
compensation and punitive damages. McDonald’s was held guilt under the product liability
law, which protects consumers from the negligence of the retailers. The court decided that that
the coffee which was of 170 degrees was above the regular threshold to serve the customers, as it
has the ability to cause second degree burn within a couple of seconds. It was held that
McDonald’s has breached ‘implied warranties of merchantability and fitness’. A product comes
with an implied warranty, which is like a promise and it bears the responsibility to have a
standard of care towards the consumer. In case such implied warranty of merchantability is
breached, the manufacturer, distributor or the retailer of the product would be liable for the
adverse consequences (Johnson, 2018).
Furthermore, it was also claimed by the court that the plaintiff was too some extent was
responsible for the accident, thus reducing her claimed compensatory amounts (Solberg &
Hosack, 2017). However, the ultimate settlement that had occurred between the parties remain
secret, which is still unknown to the public, even though this case received public hearing
extensively. Although such secret mediations and settlements are rampant these days, however,
they prevent the common people from knowing and learning the final consequences of a case of
product liability law infringement. It is important for people to be educated about their rights as a
consumer, which these kind of cases lay down.

2CORPORATE GOVERNANCE AND SOCIAL RESPONSIBILITY
Question 8
The manufacturers are recommended to take all the necessary precaution and preventive
measures regarding the products that they sell, as they would be held liable for any defect or
danger arising out of such products, especially to senior citizens. Businesses should be held
liable for the accidents that customers face due to the defective products of such businesses. With
the growing global age, there should be better customer service, especially for the old people
who are much more dependent on others for their incapacity to hardship due to old age. In this
case, McDonald’s is advised to lower the temperature of the coffee to such endurable threshold
that it does not harm the consumers. Additionally, McDonald’s is recommended to train their
servers to warn the customers regarding the high temperature of the drink, especially while
serving senior citizens. This gives the company a scope to defend itself on the grounds that the
consumer was warned regarding the high temperature of the drink, as the companies bears
product liability to its consumers (Tulibacka, 2016). Moreover, companies should be more
cautious when it comes to senior citizens, for they tend to lack the fine sense of judgment with
old age, unlike the young.
In addition to, the consumers are advised to be have the complete information regarding
the products they are consuming.

3CORPORATE GOVERNANCE AND SOCIAL RESPONSIBILITY
References
Solberg, J. J., & Hosack, K. A. (2017). Recent Trends in Punitive Damages Jurisprudence: Are
Excessive Awards Galloping Away, or Are Courts Acting in Good Faith to Rein Them
In?. Southern Law Journal, 27(1), 113.
Tulibacka, M. (2016). Product Liability Law in Transition: A Central European Perspective.
Routledge.
Johnson, M. H. (2018). Essential reproduction. John Wiley & Sons.