Business for the Client - Report Example

Running Head: BUSINESS REPORT Business Report for the Client No: Business Report for the Client Table of Contents Problem Statement In planning to start up a business with Jess by selling hand-made crafts to the public and import and sell jewellery from Indonesia along with proposing to lease an old Victorian commercial property on the outskirts of Norwich as their workshop and sales area, there are certain issues to understand. The presence of potential liability for harm caused by their products and services and the safety of their business premises in terms of legal obligations and liabilities concerning their visitors and any potential trespassers need to be understood. Potential liability for harm caused by products and services Before setting up a small business of handmade crafts for the consumers of the locality, the owner of the business has to take care of the rules and regulations of the United Kingdom. Non-compliance of the rules of business may attract penalties from the law enforcers. First of all, owner of the business has to take into consideration the business and introduce the chosen products to market legally as safe products besides their business potential. If owner of the business fails to abide by the rules, she has to face the serious repercussions. This could be in shape of penalties and the imprisonment, as the case may be from the competent court of law. There are strong chances that the consumers could sue the owner of the products who have suffered through colossal damages at the hands of the manufacturer of the products. We advise you to go through the basics of product liability and the product safety laws, which could be of great help in understanding how these laws would affect your business and what action you have to take for your defence in otherwise situation. Product Liability Product liability law informs details about manufacturers to retailers responsible for any injuries that were caused by their products irrespective of any contractual limitations of liability. In case, product or any of its components are found defective, the manufacturers will be liable for damages in accordance with Consumer Protection Act (CPA) or the common law of negligence. Negligence may lead to one’s death, personal injury and damages to the property in view of the product defect. However, the legal action cannot be initiated if it relates to compensate for pure economic or consequential loss (Stapleton 1994, p. 51). We cannot ignore statutory liability for defective products. Liability under the CPA fixes the liability in negligence. Common law may succeed in providing other option that is not available under the said Act. It deals with two sorts of products. One is used by the consumer and the other one is used at the workplace. As per the mentioned act, the regulator imposes strict liability on manufacturers for a defective product that caused harm to the consumers. This means that people who are injured by defective products have the right to sue for compensation without prove that the manufacturer was negligent. It would be enough for the aggrieved customer to prove that the product, which used was defective. Hence, cause of action arises (Stapleton 1994, pp. 59-62). The previously mentioned act is applicable to all consumers who use the products. The beauty of the act is that anyone can sue the manufacturer against the harm done to him by the product. However, the claim could be in excess of 275 GBP. In otherwise situation, which purely connects with the economic losses, the CPA imposes no financial limit on the producers total liability (Stapleton 1994, p. 67). We have to take into account the case of MacPherson, a leading authority concerning negligence. The mentioned case attracted the attention of the masses with regard to sympathy for the victims of industrial negligence as well as the demise of the rule. A manufacturers product related literature, distributed amounts to “shatterproof", which constituted warranty for the purchaser that the windshield would not be broken down. We can refer to the case of Baxter v. Ford Motor Company (1932). Take another case of Henningsen v. Bloomfield Motors, Incorporation, wherein the New Jersey Supreme Court abolished the limitation of privity and held that implied warranties were meant for ultimate user or consumer of the product only. The decision in the case of Henningsen has been followed in almost all subsequent jurisdictions (Henningsen v. Bloomfield Motors, Inc. (1960)). It would be in the fitness of things if we could refer famous case of Escola v. Coca Cola Bottling Company in terms of judicial exposition by the Supreme Court of California. The learned Justice held that in a number of justifications strict liability was discussed by the competent jurisdiction. Accordingly, negligence is seldom proved, it can be accomplished through an array of actions relating to breach of warranty. It needed strict liability for safety incentives. Hence, the manufacturer is in the comfortable position either to prevent the harm or insure or spread the cost of risk amongst the stakeholders. By way of this mechanism, the manufacturer of a product heavily relies on the expectation of the products safety that enables her to stand behind the product (Escola v. Coca-Cola Bottling Co. (1944)). Liability for Defective Products Producer of the product is liable in case of defective product under the CPA. There is no exception to it whether the product is a finished good or the component of the product or any person responsible for an industrial or likewise processes, is attributable. Liability may also be imposed on the misuse of a name or a trade mark of a company. Besides the above, any person who imported the product falls into the ambit of European Community Law (Whittaker 2008, p. 78). From the above study, it reveals that more than one party is liable under the CPA as far as the damages are concerned. Under the above said scenario, liability can be treated, as joint and several, so the injured party may enjoy the right to sue any of them or all of them. Liability cannot be excluded or limited (Whittaker 2008, p. 81). A product can be attributed to all stakeholders who took an active part of making finished goods. It can be the raw material or it can be any component of the product, which includes goods, electricity and any component of any product. A product can be defective in terms of safety, which does not confine to risk of a personal injury, but also the risk of damage. It is not necessary that a product will not generally be considered defective due to its safer version later put on the market (Whittaker 2008, pp. 87-88). In the case of Greenman v. Yuba Power Products, Incorporation the Supreme Court of California was in favour of strict liability under the law of tort for defective products. By virtue of mentioned judgment, strict liability became dominated factor in the country and in the subsequent year, the law got introduced in many states (Greenman v. Yuba Power Products (1963)). Safety Measures for the Products In analyzing the safety measures for the product, the competent court of law will take following points into account while hearing the case (Harpwood 2000, p. 131): a) The use of any mark with regard to the product; b) Wrapper of the product that carries instructions and warnings; c) Reasonable measures to be taken at the time of supplying the product. The last point compels the court to look into the state of the art at the time of supply. The laws provide manufacturer a number of defences when a claim is made. Now, it is the responsibility of the defence to show that (Harpwood 2000, p. 135): 1) The product in use can be defective in to comply with domestic / European law 2) The claimant did not supply the product 3) Product was not manufactured / supplied in the course of a business 4) Defect did not exist at the time when the product was circulated 5) The way the finished product was designed CPA’s Role The CPA identifies development risks defense, creating a defense provided for scientific and technical knowhow at the time of manufacturing the product was not such that the producer of a similar nature might have been expected to find out the defect. This is an important aspect in relation to innovative and high tech products. Comparatively, European law is stricter than the law of the United Kingdom, which deals with the state of scientific and technical knowledge rather than what a manufacturer of similar products might be expected to discover (Holmes 2009, p. 94). The limitation period to lodge a claim under the CPA is three years, which starts from the date of damage or injury since damage may not appear on the surface at once. A product may remain in circulation for so many years altogether. The claim cannot be made before three years of its circulation (Holmes 2009, p. 97). The safety of the business premises Trespassing In the United Kingdom, trespassing law is considered a civil matter baring few exceptions, and those who owned property cannot always depend on the police to implement trespass laws. This matter is not confined to a specific person who walks into someone’ property without his or her permission (Holmes 2009, p. 103). The law of the United States of America and the United Kingdom even empower the employees of a business entity or a private property to protect the property against trespassers with tooth and nail. The nature of trespassing will determine nature of liability, as far as the criminal or civil liability is concerned. Thus, using of booby trap to discourage trespassers is treated against the law. However, it could be a safer way to resolve the conflict with a trespasser through the court of law (Holmes 2009, p. 119). Business Tenant and Commercial Lease In accordance with UK law, business tenant will have to abide by paying the rent at the agreed time and not to use the premises for illegal purposes. It is incumbent upon the tenant to sort out the things before signing the lease agreement with the owner of the premises. The moral and legal duty of a property owner to do his best for the tenant by providing comforts on favourable terms as much as he possibly can. Before entering into premises, the tenant has to go through each clause of the lease and to check the premise thoroughly to identify the fault to the landlord (Crosby, Hughes & Murdoch 2006, p. 165). The following essential terms and conditions of a lease are given below: The rent payable for the space leased. Establish business in line with market conditions. Responsibility for insuring the premises. Responsibility for making any repairs of the property. How to get out of lease under specific circumstances. Ensure payment of service charges such as cleaning, heating and lighting on due dates. Provide a guarantee who takes over your lease. Lease end protection: rights to renew the lease when it ends. Retaining the same premises such as shops or restaurants, so although you have some statutory protection in this area. According to commercial lease being a tenant, one has to honour the obligations associated with the premises required under the statute inclusive of health and safety (Crosby, Hughes & Murdoch 2006, p. 169-170). To fulfil the fire safety requirements To meet environmental and asbestos requirements To implement Disability Discrimination Act requirements Occupiers Liability With regard to Occupiers liability, which comes under the purview of law of tort, codified in statute specifically deals with duty of care, who occupies the property either as an owner or as a tenant owe to the people who visit the place of business. It exclusively deals with liability that arises out from accidents due to defective or dangerous condition of the premises (Bennett 2011, p. 127). In English law, occupiers have to fulfil their liability towards visitors that is regulated vide Occupier Liability Act 1957. In addition to that, occupiers liability to trespassers is provided under the Occupiers Liability Act 1984. In a broader term, common law pinpoints the difference between a "visitor" and a "trespasser (Bennett 2011, p. 127). Following are the case examples to strengthen the rules and regulations in vogue to run the affairs of small business by its owners and to avert any unpleasant action to be taken by the competent authority whose responsibilities are to encourage and promote healthy business strictly in accordance with the law: Glasgow Corporation v Taylor (1922) Robert Addie & Sons (Colliery) Ltd v Dumbreck (1929) Phipps v Rochester Corporation (1955) Roles v Nathan (1963) Table of Statutes and Legal Cases 1. Baxter v. Ford Motor Co. (1932) 168 Wash. 456, 12 P.2d 409. 2. Escola v. Coca-Cola Bottling Co. (1944) 24 Cal. 2d 453, 150 P.2d 436. 3. Greenman v. Yuba Power Products (1963) 59 Cal. 2d 57. 4. Henningsen v. Bloomfield Motors, Inc. (1960) 161 A.2d 69 N.J. 5. Phipps v Rochester Corporation (1955) 1 QB 450. 6. Robert Addie & Sons (Colliery) Ltd v. Dumbreck (1929) AC 358. 7. Roles v Nathan (1963) 1 WLR 1117. 8. Taylor v Glasgow Corporation (1922) 1 AC 448. 9. Common Law 10. Product Liability Law 11. Consumer Protection Act 12. European Community Law 13. Trespassing Law 14. Law of Tort 15. Occupier Liability Act 1957 16. Occupiers Liability Act 1984 Bibliography Baxter v. Ford Motor Co. (1932) 168 Wash. 456, 12 P.2d 409. Bennett, L 2011, ‘Judges, child trespassers and occupiers liability’, International Journal of law in the Built Environment, vol. 3, no. 2, pp. 126-145. Crosby, N., Hughes, C., & Murdoch, S 2006, ‘Flexible property leasing and the small business tenant’, Journal of Property Research, vol. 23, no. 2, pp. 163-188. Escola v. Coca-Cola Bottling Co. (1944) 24 Cal. 2d 453, 150 P.2d 436. Greenman v. Yuba Power Products (1963) 59 Cal. 2d 57. Harpwood, V 2000, Principles of tort law. Routledge. Henningsen v. Bloomfield Motors, Inc. (1960) 161 A.2d 69 N.J. Holmes, O. W 2009, The common law. Harvard University Press. Phipps v Rochester Corporation (1955) 1 QB 450. Robert Addie & Sons (Colliery) Ltd v. Dumbreck (1929) AC 358. Roles v Nathan (1963) 1 WLR 1117. Stapleton, J 1994, Product liability. Cambridge University Press. Taylor v Glasgow Corporation (1922) 1 AC 448. Whittaker, S 2005, Liability for Products: English Law, French Law, and European Harmonization. Oxford University Press. Read More