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Finance & Accounting
Pages 4 (1004 words)
CHAPTER 1 CASE 4 1. No, Yellowstone should stop marketing mowers. It is neither legal, nor ethically correct to continue selling products to people, knowing that they could cause injuries to the users. Under Section 2 of the Restatement (Third) of Torts: Products Liability, this is a design defect.
2. It is understandable why Yellowstone wishes to settle all the claims out of court. A trial would inform public opinion about the low quality of the mowers and would harm the company’s image. It is also understandable why the company’s lawyers keep the claims out of the court. Considering the fact that this is an abnormally dangerous defect, Yellowstone should act ethically and just publicly admit its fault, retrieve all the mowers from the shops and work on repairing them. However, the ones that should go to court and accept no settlement are the injured parties, the consumers who have suffered because of the defected products. 3. Again, it is understandable why Yellowstone would like to include the secrecy clause in the settlement agreements. If one party were to start talking about the defect of the mower and about the fact that the claim was kept out of the court in change for an impressive sum, Yellowstone would be forced to deal with one of the two situations: 1. Their sales would grow, as a result of people looking at this like at a business opportunity: buy one defective mower, wait until it explodes, threaten the manufacturer with a lawsuit and get a refund from Yellowstone, or 2. Their sales would be drastically reduced as a result of the bad publicity. ...
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