The purpose of this project is to research, analyze and apply tort law, product liability law, jurisdiction, and contract law and their associated potential risks and liabilities in business. The project requires you to identify and analyze legal issues and to make recommendations.
You will also develop skills in critical thinking to create an in-depth comprehensive analysis.
Outcomes Met by Completing this Assignment:
recommend appropriate actions in the business environment based on an understanding of sources of law, legal process and procedure, and available remedies
analyze contractual rights, obligations, liabilities, and remedies in the business environment
analyze tort rights, obligations, liabilities, and remedies in the business environment
Background: Things are moving quickly for the CG owners. They are almost ready to open operations and finalize contract negotiations with EPEE to purchase cleaning products. EPEE and CG have already agreed that CG:
(1) will buy cleaning products exclusively from EPEE for three years,
(2) will be permitted to resell those products to clients and other businesses, and
(3) may contract with certain businesses who buy cleaning products from CG to become Authorized Distributors (AD) for those CG products; Ads will be listed on GC’s website.
CG needs to draft a contract to reflect an agreement between CG and future Ads. The contract will be complex, and CG is concerned about risks and liabilities created by AD relationships.
In a meeting with LG, CG owners stated they have heard about several recent lawsuits involving businesses and Ads. Connor presented a “what if…” scenario that could create complicated liabilities arising from CG-AD agreements.
The “what if…” scenario follows.
“What-If…” scenario: In contracts with Ads, CG includes an indemnification clause stating that the AD would cover claims by third parties harmed directly as a result of the Ads actions.
A CG AD contracts to clean concrete floors in a commercial building in North Carolina using Floor-ex, a cleaning solution, purchased from CG (manufactured by EPEE and sold to CG for resale distribution).
The AD’s employee spills a large tub of Floor-ex on the job site resulting in the following:
the building owner slips on the spill, is injured and misses 3 weeks of work;
the building owner hits a piece of equipment in the fall causing it to slide resulting in damage;
Floor-ex splashes on the wall, staining it and part of the wall must be replaced.
The building owner files a lawsuit against the AD and CG for negligence, as well as for product liability. The building owner seeks compensation damages for:
medical expenses and economic loss from her injuries;
costs for repair to the building wall;
costs for repair to the damaged piece of equipment.
The CG owners ask Tlingit opinion about their liability if a situation like the “what-If…” scenario occurred with one of their Ads. Tlingit response will influence the owners’ final decision about whether to use Ads in their new business.
Winnie and Ralph asked you to discuss the “what-If…” scenarios and analyze the related potential liabilities with an attorney LG has on retainer. Winnie and Ralph want you to then summarize the attorney’s analysis in a memorandum to them for further discussion with the CG owners.
The memo should analyze and explain: