9140 Lecture Notes - Francisco Liriano, Absolute Liability

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tatakausupai

18 Dec 2022

School

Baylor University

Department

Law

Course

9140

Professor

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Document Summary

Imposing a post-sale duty to warn would place absolute liability upon the manufacturer: the read and heed principle of warning defects assumes that if a warning was present, the purchaser read it. A manufacturer"s duty to the consumer is not open-ended. It does not extend to designing a product that is impossible to abuse or one whose safety features may not be circumvented. The manufacturer need not trace its product through every link in the chain of distribution to insure that users will not adapt the product to suit their own unique purposes. liriano v. hobart corp. , ny 1998. Imposing a post-sale duty to warn eliminates the requirement that a defect existed when the product left the hands of the manufacturer. This imposes absolute liability on the manufacturer, extending from production to infinity. It would be impossible for wls to contact each purchaser of every beta blaster.

Related Questions

Plastic Co Pte Ltd (‘Plastico’) is a Fiji company. The company has issued and paid up capital of $250,000 held in equal parts by two brothers. The company’s business involves making plastic products for the local market.

The brothers are planning to emigrate to New Zealand and wish to sell the company. An agreement in principle is reached for X to buy the company for $1 million. This is a cash sale.

Presume that you are wealthy and a longtime friend of X.

X comes to see you. She explains that she has in hand $800,000 (from her own savings and bank financing) and is short $200,000 to close the deal. X wants you to loan her $200,000. X has two specific proposals as follows.

Proposal One

Plastico is an old company. When founded it established its factory on the outskirts of Suva. Since that time Suva has grown and spread with the consequence that the land on which the factory stands is today much more valuable than when the factory was built. X has had the land valued at $300,000.

X has found alternative factory premises on the outskirts of modern Suva that would be suitable for the company. These premises are for sale for $100,000.

X proposes that you lend her $200,000 for four months only. X will acquire Plastico. The company’s new directors, X and her husband, will have Plastico sell its current factory and relocate to the premises already identified. The relocation will provide net cash of $200,000. Plastico will then pay a dividend of $200,000. X will use the distribution to repay your loan.

Proposal Two

X proposes that you lend her $200,000. This will be a longer term loan of say 6 years to be paid down incrementally over the life of the loan. Plastico will retain its present factory premises. As security for the loan, Plastico’s new directors, X and her husband, will have Plastico grant you a first mortgage over the current factory premises. Given the valuation placed on the premises the loan will be almost risk free.

Further details of both proposals provide an attractive return for you on the financing.

Required:
Consider each proposal separately and in turn.
Does the proposal offend any of the capital maintenance rules?

[Note ‘agreement in principle’ refers to a situation where two parties have agreed on all the terms of a deal (i.e. contract) but have not yet formally committed to the deal. In this story the parties (X and the two brothers) will only sign the contact document detailing the agreement when X has lined up the required cash of $1 million.]

amethystpug972

CASE STUDY:

Jolinda Hobble had a history of her left knee slipping out of joint since 1998. She went to see Dr. Ralph J. Verygood, an orthopedic surgeon who recommended corrective surgery after Jolinda had a major dislocation of the left kneecap in July of 2000. As a result of this surgery, Jolinda suffers from palsy of her left foot, a condition evidenced by numbness in her big toe and three adjoining toes, the numbness extending about half way up her foot on both the top and the bottom. Jolinda was advised that she might still experience postsurgical knee problems, including inability to walk altogether. She also says that she was not specifically warned about possible postsurgical numbness to either her left leg or foot. Dr.Verygood says that he did indeed warn Jolinda about this possibility.

The surgery was performed July 31, 2000. Jolinda was placed under general anesthetic and remained unconscious throughout the operation. Dr. Verygood performed a surgical procedure which has the effect of realigning the entire mechanism controlling the kneecap in order to correct the knee dislocation. During the operation a pneumatic tourniquet was applied to Jolinda's leg to help the operation procedure by cutting off the blood supply to the leg to create a dry (bloodless) surgical field. Following surgery Jolinda's leg was wrapped by Nurse Vicky with a padded dressing consisting of expandable bandage extending from the toes to the top of her leg. Nurse Vicky is an employee of the hospital.

Dr. Verygood was scheduled to take a few days vacation after the operation, but he nevertheless checked on Jolinda in the recovery room within one hour of the surgery. He also wrote detailed orders to be followed during his absence.

Jolinda says that she first awakened around dinner time on the day surgery was performed, but that she did not regain full consciousness until the following morning. At that time she became aware of a throbbing pain in her left leg which was concentrated on the knee and foot. Jolinda first complained about the pain to the hospital nurse, Nicky the morning after surgery. Nothing was done about the pain, however, until she was checked by Dr. Greatman, Dr. Verygood's partner, on the second postoperative day. Following Dr. Greatman's visit, Jolinda's bandages were cut off in the foot area giving her some relief and after which she experienced a tingling sensation throughout the whole foot.

Jolinda received follow up care from Dr. Verygood after surgery for about one year and during this time period Jolinda's complaints of pain and numbness in her left foot continued.

Here is some more information to consider: You end up hiring for your expert, Dr. Richard Cutgood, a board certified orthopedic surgeon, who had performed literally thousands of knee surgeries in his medical career. Dr. Cutgood is of the opinion that the risk of the type of injuries Jolida has following this type of surgery was statistically nonexistent.

Dr. Cutgood concluded that the most probable cause of plaintiff's injury was external pressure either from the tourniquet used during surgery or from the application of tight bandages after the operation. He considered the probability of nerve damage during the actual surgical procedure to be small because the surgical knife "isn't long enough to reach over and cut that nerve." Regarding the tourniquet, from his experience tourniquet pressure ordinarily does not result damage to the nerves unless "it is incorrectly applied or it is applied over a bony prominence or the tourniquet itself is defective."

Dr. Cutgood stated that while nothing in the record indicated that defendant did anything wrong during the surgery, he was of the opinion defendant was "below the usual and customary standard of care" as such result "does not generally occur without some untoward action of the surgeon."

Does the doctrine of Res Ipsa Loquitor apply to this case? What does this legal term mean? What are the conditions that need to be present for this doctrine to apply?

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9140 Lecture Notes - Francisco Liriano, Absolute Liability

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