Business Law Assignment: Analyzing Business Liability in Product Cases

This business law assignment examines the legal risks associated with product liability and negligence in a business context. The assignment analyzes a scenario where a business, PI owners, faces potential liabilities related to the use of paints containing volatile organic compounds (VOCs). The analysis explores the grounds for consumer actions, including negligence, breach of warranty, and strict liability. The assignment delves into the concept of negligence, defining the duty of care and the consequences of its breach, particularly concerning the potential harm caused by VOCs. It further discusses product liability, highlighting the manufacturer's responsibility for defective products, and the three types of defects: design, manufacturing, and marketing. The assignment also considers the advantages and disadvantages of different choices, such as the potential use of 'privity of contract' as a defense and the impact of government regulations on the business's liability. The assignment concludes by emphasizing the importance of understanding consumer rights and the legal obligations of businesses to prevent potential damages and reputational harm.

Running head: BUSINESS LAW ASSIGNMENT
Business Law Assignment
Name of the Student
Name of the University
Author Note

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Memorandum
1. In business, the owners of the business or the businesses are the defendant who is alleged
to have failed to exercise reasonable standard of care and have breached the duty of trust
towards customers, suppliers, employees and other associated individuals.
2. In the USA, consumers can bring action actions against business on three grounds
namely, negligence, breach of warranty and strict liability;
3. In the given scenario, if choice 1 is opted, the PI owners may be subjected to certain legal
risk and liabilities arising in the form of product liability and negligence.
4. Negligence refers to the legal failure to exercise the duty of care that is owed by
defendant towards the plaintiff. The failure to exercise duty of care refers to the care that
any reasonable person would have exercised under the same circumstances. In order to
proceed with a negligence claim, it is important to establish the defendant owed duty of
acre and has committed a breach of the duty of care causing damages to the plaintiff. The
damage should be a direct outcome of the breach of the duty of care (Owen, 2014).
5. The legal risk that may arise is the risk of causing intentional damage to the consumers if
the contract is continued with Naturals. This is because VOCs release gases that are
considered harmful to people and the environment as well, hence, they are subjected to
governmental regulation. On the other hand, paints containing Low VOC have reduced
amount of volatile organic compound and does not release gas unlike traditional paints.
However, paint’ having ‘low’ VOC is not a standard and the labels are random.
6. This would imply that the low amount of VOCs in the paint might cause damage to the
consumers who use such pain. This may amount to the breach of duty of care that the
business owners owe to the consumers. Apart from the physical damages that the breach

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may cause to the consumers, the business shall also suffer from reputational damage for
causing environmental damage, resulting in loss of investors, which ultimately will lead
to lack of financial stability.
7. The aggrieved party may establish that the business has breached its duty of care and
duty of trust that it owed to the consumers and claim pecuniary damages for the injuries
sustained due to the use of the paint containing low amount of VOCs.
8. The consumer may bring a legal action against the vendor or the manufacturer on the
grounds of strict liability as they have been responsible for causing the injuries resulting
from defective product that were dangerous to the consumers or his/her property (Luntz
et al., 2017).
9. Unlike negligence, under product liability law, the aggrieved person need not establish
that the business has breached a duty of exercising reasonable standard of care (Allee,
Mayer & Patryk, 2017). The aggrieved consumer will only have to establish that the
product was defective and it existed when defendant handed over such product to the
consumers, which has caused injury to the consumer.
10. In the USA, product liability law holds the manufacture or the business selling the
product liable if it causes injury to the consumers. The law requires the seller or
manufacturer to be responsible for fulfilling the ordinary expectations of the consumer.
Since there is no Federal Legislations on Product Liability, the product liability claims
are based on strict liability principles, negligence or warranty breach (Goldberg &
Zipursky, 2016).
11. Moreover, if option 1 is opted the business owners do not have the opportunity to use
‘privity of contract’ to use in their defense against claims made by any non-user of the

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product. There are three forms of defects that can be claimed against by the aggrieved
persons. The defects include design defects, manufacturing defects and marketing
defects.
12. In this case, opting choice 1 may give rise to liability claims against marketing defects
under product liability law and hold the business liable for committing breach of duty of
care under negligence law if they fail to provide insufficient instructions or if provides
inadequate safety warnings while selling the product. However, the only advantage of
this option is that the business owners shall be able to use the defense that the Federal
and state regulations have categorized the paint as zero-VOC. Thus, the risk of suffering
damages was not foreseeable by the business owners as they relied on government
regulations with respect to the presence of VOC in the paint.

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Reference list
Abraham, K. S., & White, G. E. (2017). The Transformation of the Civil Trial and the
Emergence of American Tort Law. Ariz. L. Rev., 59, 431.
Allee, J. S., Mayer, T. V., & Patryk, R. W. (2017). Product liability. Law Journal Press.
Best, A., Barnes, D. W., & Kahn-Fogel, N. (2018). Basic tort law: cases, statutes, and problems.
Wolters Kluwer Law & Business.
Epstein, R. A., & Sharkey, C. M. (2016). Cases and materials on torts. Wolters Kluwer Law &
Business.
Goldberg, J. C., & Zipursky, B. C. (2016). The Strict Liability in Fault and the Fault in Strict
Liability. Fordham L. Rev., 85, 743.
Goldberg, J. C., Sebok, A. J., & Zipursky, B. C. (2016). Tort Law: Responsibilities and Redress.
Wolters Kluwer law & business.
Henderson, J. A., Kysar, D. A., & Pearson, R. N. (2017). The torts process. Wolters Kluwer Law
& Business.
José Ganuza, J., Gomez, F., & Robles, M. (2016). Product liability versus reputation. The
Journal of Law, Economics, and Organization, 32(2), 213-241.
Luntz, H., Hambly, D., Burns, K., Dietrich, J., Foster, N., Grant, G., & Harder, S. (2017). Torts:
cases and commentary. LexisNexis Butterworths.
Owen, D. (2014). Products Liability Law, 3d (Hornbook Series). West Academic.

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