Colossal Corporation maintains a subsidiary in Serafini, a small country in Eastern Europe. This subsidiary is incorporated in the state of Delaware as New Brand Design, Inc. (NBD), a company that designs, brands, and manufactures innovative electronic products, and markets and distributes them for resale across the globe. NBD has been admitted to conduct business in Serafini.
NBD has been manufacturing and distributing a laptop computer with 360-degree technology. The thin tablet can easily convert into a laptop by flipping the screen over and locking it in place against the back of the keyboard. The laptop, marketed under the name Dualplex 360 is very popular and is distributed primarily in Western Europe, North America, and South Africa.
The Dualplex 360 went on the market six months ago, and the product is selling out in the United States and Europe. Unfortunately, consumers have reported that some laptops that were shipped to the United States have overheated and ignited when they have remained plugged into a power source for too long. In a few cases, the laptops have burned users and damaged property.
NBD’s research and development team was fully aware of the overheating problem when putting the Dualplex 360 on the market but performed a cost-benefit analysis and determined that the payouts from lawsuits would be less than the cost of redesigning and manufacturing a new laptop. The research and development team covered up the defect but included the following disclaimer in the instruction manual:
DO NOT LEAVE THE DUALPLEX 360 PLUGGED IN TO A POWER SOURCE AFTER THE BATTERY IS FULLY CHARGED. SELLER EXPLICITLY DISCLAIMS ALL WARRANTIES. SELLER MAKES NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE. NOR IS THERE ANY OTHER EXPRESS OR IMPLIED WARRANTY.
The instruction manual contained no other warnings regarding the possibility of overheating or danger. To date, all instances of overheating have resulted from consumers ignoring the warning and leaving their computers plugged in after the battery is fully charged, although some claim they never read the instruction manual so did not see the warning.
The executive board of NBD has reached out to the CEO of Colossal to discuss these issues and the potential that NBD will be held liable for the overheating laptops and resulting injuries and damage to property. The CEO informed the board that the company’s international task force will research and address these concerns.
Review the Dualplex 360 case file. (attached below)This is another case arising out of Colossal’s subsidiary, NBD, but involving potential consumer claims against the company. This is a serious and time-sensitive situation, and I need your team to address the following questions:
1)Given what is happening with the Dualplex 360, list the types of claims that the US customers could file in court against NBD and the arguments they might make for each element of their claims.
2)What types of damages could be awarded under any of the claims listed in your response to the previous question?
3)What defenses might NBD have for each claim? How likely is it that NBD will win each claim?
To address these issues, begin by reading about tort damages and negligence and products liability. These resources are a great introduction, but you may need to do some additional research on the internet and in the library to answer the questions in full. We are counting on your expertise, insights, and deep research on this one.
Write a report for the CEO. Be sure to meet the following requirements: APA-formatted in-text citations and an APA-formatted reference list (do not format the body of the report using APA style, just the reference list); a specific recommendation on what action, if any, the CEO should take based on your analysis and conclusions; Support your conclusion with references to legal principles and laws; no more than five pages (double spaced, 12-point font; the reference list does not count towards page limit).
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