Business Law: Fault In American Contract Law

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Business Law: Fault In American Contract Law

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Business Law: Fault In American Contract Law

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Discuss about research a current products liability issue in the news and analyze, with supporting arguments and academically sound support, what elements of a valid (products liability) claim are raised, and then discuss how a negligence and a warranty claim, respectively, compare and contrast.?

Johnson & Johnson, the giant baby care and Pharmaceutical Company has been accused by the tort Law of US for their Talcum powder products (Andrews, 2011). The jury of St. Louis has provided verdict That Johnson & Johnson has to pay $72M to the family of a woman who is dead because of using talcum powder manufactured by Johnson and Johnson. As per the article of ABA journal of 23rd Feb. 2016, it was a land mark case, where the client from Alabama State from the last sixty years purchased and applied talcum powder by Johnson and Johnson. The woman used the products of the pharmaceuticals company as the company advertised, promoted and marketed these products in such a way that they would be used by the targeted customers (Ben-Shahar & Porat, 2010). The woman used these products to maintain feminine hygiene and thus dusted this talcum powder on regular basis inside of her genitals. The legation was that the company knew about the adverse effects of the talcum powder and its potentiality of giving rise to cancer. Despite of being aware of the fact that the talcum powder can be a cause of ovarian cancer and has issues with the fatal disease of cancer, the company has been unsuccessful in warning their customers.  The company has shown negligence in this issue of cancer and the fact that this can adversely effect on their business, which means the company can lose out on its huge sale and thus the profitability (Boeckman, Greenwald & Von Bismarck, 2013). For this particular reason, the company did not aware their customers about the adverse effect of their products, which eventually caused fatal disease to the customer. The customer was suffering from ovarian cancer, which originated from the use of the talcum powder manufactured and traded by Johnson & Johnson. However, Johnson and Johnson said that there are not any connection between the usage of their talc and ovarian cancer. Moreover, after raising the issues of ovarian cancer, the company continued to sell their products containing talc and thus it is case of tort or negligence.
Johnson and Johnson is a renowned company for cosmetics and baby products. But recently Johnson and Johnson has been fined 72 million dollar because it caused a consumer’s death.  The tort law in United States of America forms to rectify damages caused to any person by the behaviour of another. Product liability is one the major issues that comprises the tort law in United States of America (Brennan, 2011). Product liability refers to the liability of sellers or manufacturers to compensate users, buyers and as well as the bystanders, for any injuries or damages because of any faults in the products purchased. The rule of tort law product liability is also applicable to the commercial sellers and the distributors of the goods. Liability can arise at any situation along the process of production and distribution also. Even, the retailer, manufacturer, and wholesaler are also being responsible for injuries and damages caused by any defected product. Basically, product liability claims are based on multiple theories of liability. It includes negligence, strict liability, breach of warranty and misrepresentation. Johnson and Johnson caused the death of a woman. Some unhygienic contents in Johnson and Johnson talc damaged that woman’s ovary. It has been found that the growth of her ovarian cancer was proximately and directly caused by defective and dangerous elements of the product. According to the tort law, Johnson and Johnson is responsible for not making their customers aware of the effects that the different elements in the products can have on its users (, 2016). Negligence is one of the major factors in this case because Johnson and Johnson promoted their products as hygienic. Moreover, they are the leading brand of child care product which ensures the customers that the company would not compromise on the quality of the product. According to a research, Johnson and Johnson’s talcum powder is very dangerous for women if they use it in their genitals.  In a word, Johnson and Johnson is liable in this case as the particular consumer claims for the product liability failure to conspiracy, negligence and warn.    
From the above case it can be easily perceived that a business giant like Jonson & Johnson has played with the life of their customers. The company consistently crafts their advertisement, promotional and marketing programs, where the company briefly describes their products as hygienic and most suitable baby products without any adverse effect on any part of the body of the babies. Therefore, most of the people as well as families across the world extensively use their products to protect their baby from any harmful effects (Brennan, 2011). Nevertheless, it is perceived that by using the products from Johnson & Johnson several women are suffering from ovarian cancer; thus, there are many cases running against the company in several judiciaries. From this particular news article it is observed that a woman from Alabama, who afterwards dwelt in Georgia, used the talcum powder for many years. As per the report from sixty cases, the consumers bought as well as used these products for personal as well as feminine hygiene. The women used to dust their perineum with this talcum powder for hygienic purpose. As per the advertisement campaign and promotional activities by the Johnson & Johnson their products are highly hygienic and thus it is normal that several people get influenced by their advertisement and apply the products from Johnson & Johnson for ultimate hygiene and safety. The women filed case on behalf of around 60 applicants against Jonson & Johnson for their defective products (Cremades & Dimolitsa, 2013). The woman directly accused Johnson & Johnson that her cancer is caused by the defective and dangerous talc products manufactured by them. Moreover, the woman alleged that Johnson & Johnson knew about the fact that their products have harmful effect on human body, but they have been consciously silent about it. The unhygienic elements of the product caused the ovarian cancer of the women. The manufacturers are also responsible because of their negligent and wrongful conduct of the research, progress, testing, manufacturing, promotion, distribution and sale of that faulty product.  
Contract Law Case Study
Business contracts in USA create certain obligations that must be fulfilled by the companies or people who have entered into the following agreement. According to the law, if any party fails to fulfill the conditions of the agreement then it would be called as the breach of contract. If any contractual dispute occurs then formal lawsuits and courts are the only option for the businesses and people involved in the contract (Carter, 2012).       
A shaft in the mill of Hadley was broken and the mill became inoperable. Baxendale was hired by Hadley to transport the mill shaft that was broken to an engineer in Greenwich in order to make a duplicate. Hence, Hadley wanted that the broken shaft to be immediately replaced and Baxendale said that the duplicate shaft will be delivered the next day. Baxendale promised for the immediate delivery but did not know that the Hadley’s mill would not be operable till the new shaft arrives (Zhang, 2011).  Baxendale did not transport and deliver the shaft on time and was negligent as promised, which caused the mill of Hadley to remain shut down at least for the next five days. Therefore, Hadley had paid an amount of two pounds to shift the new shaft and also sued for three pounds in the damages due to the lost wages and profits (Elliott & Quinn, 2007). The court awarded 25 pounds to Hadley beyond the amount that had already been paid to the count and Baxendale appealed. Consequential damages in contract law are linked to foreseeability and knowledge at the time of the contracting and dealing with the damage recovery for the losses that are not arising naturally. Therefore, the parties can take action as per the contract law in USA.
In the analysis of this case study, it has been found that the injured party may recover those damages which are reasonably considerable for the breach of the contract. The court also held the usual rule that the claimant should be entitled with the amount that he/she had received by breaching the other party. For this reason if the claimant is put in this position then she would had the same breaching thing that the party performed. Hadley was entitled to recover the lost profits from the extra five days since the mill was closed from five days (Gosselink & Mitsch, 2011). The court also held the case and gave the decision that the damages made are fair and reasonable considering the case appeal of both the parties. It was also proved that there was contemplation of both the parties during the time of the contract. Under the contract law, the court held some special circumstances which were breached during the time the contract was made and hence the court provided the results of breaching in between the two parties by following the special circumstances (Turner & Martin, 2010). The damages for special circumstances are assessed against the parties when they were reasonably taken into considerations. With the two parties, there lies the contemplation as a probable consequence of breach. The court held the case in for Baxendale who did not have any knowledge of the mill being closed till the arrival of the new shaft. Loss of profits could not fairly be contemplated in between the two parties in case of the breaching of the contract (Grundmann, 2011). The court also said that there will be co count of the profit and losses and also these will be not considered in the jury.
When the individual or the contract law breaches, under the law, the other party will have to bear all the remedies according the contract law (Grundmann, 2013). Thus the remedies can be pointed out in three parts that are as follows:-
Damages: – the remedies most often breaches the contract, the remedy of damages of payment should be made in one form or the other and the breaching party should make the payment to the non-breaching party. There are many kinds of damages and generally the damages which are specific in nature are considered in the contract so as to prevent breaching in between the contract (Koziol, Steininger & Alunaru, 2011).
Compensatory damages: It aims to put the other party to put the non-breaching party in the position that had been if they are not breached.
Punitive damages: punitive damages are the type where the breaching party must be made and the point should be compensated by the breaching party. These help in punishing the wrongful party for its particular wrong contract deeds (, 2016).
Nominal damages: these damages are awarded when breach occurred but no money loss will be taken into account. When the non-breaching party will be found to be in fault then he will not be paid for the wrong deeds.
Liquidated damages: these are some of the specific changes that need to be made previously by the other party’s contract even if the contract is breached. Liquidity damages are made even if the fault arises in case of any parties. The actual outcome may result in breaching (White, 2012).
Cancellation and restitution: a non-breaching party may cancel the contract according to the clause of the institutions even if the non-breaching party has given benefits to the breaching party. Restitution act as a remedy for the non-breaching party which helps him to be put back in position.
Andrews, N. (2011). Contract law. Cambridge: Cambridge University Press.
Ben-Shahar, O., & Porat, A. (2010). Fault in American contract law. Cambridge [U.K.]: Cambridge University Press.
Boeckman, P., Greenwald, D., & Von Bismarck, N. (2013). Twelfth annual institute on securities regulation in Europe. New York, NY: Practising Law Institute.
Brennan, C. (2011). Tort law. Oxford: Oxford University Press.
Carter, J. (2012). Contract Law in Australia. Chatswood, A: Lexisnexis Orders/service.
Cremades, B., & Dimolitsa, A. (2013). Third-party funding in international arbitration. Paris: International Chamber of Commerce.,. (2016). Johnson & Johnson must pay $72 million after jury finds talc. Retrieved 29 February 2016, from
Elliott, C., & Quinn, F. (2007). Contract law. Harlow: Pearson Longman.
Gosselink, J., & Mitsch, W. (2011). Wetlands. Hoboken, N.J.: Wiley.
Grundmann, S. (2011). The Future of Contract Law. European Review Of Contract Law, 7(4).
Grundmann, S. (2013). The Bankinter Case on MIFID Regulation and Contract Law. European Review Of Contract Law, 9(3).
Koziol, H., Steininger, B., & Alunaru, C. (2011). European tort law 2010. Berlin: De Gruyter.,. (2016). Hadley v. Baxendale – Case Brief Summary. Retrieved 29 February 2016, from
Turner, C., & Martin, J. (2010). Unlocking Contract Law. London: Hodder Education.
White, M. (2012). Political Philosophy. Oxford: Oxford University Press, USA.
Zhang, L. (2011). Innovations, standards, and practices of Web services. Hershey, Pa.: IGI Global (701 E. Chocolate Avenue, Hershey, Pennsylvania, 17033, USA).

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