Flaming Phone Memo

Phone and Build is a South African based company specializing in the production of Flaming Fast brand mobile phones. The company launched its products to the market six months ago, selling phones at the local market and in North America and Europe. Unfortunately, some of consumers have reported that some of the product being sold in the United States overheated and some ignited. In a few cases, some phones have burned users and even damaged properties. Ideally, whether small, medium, or large, business organizations must interact with the society at every level of their functionality. The social, cultural, and ethical issues within the society at which they function also often influence business organizations. Additionally, as the global market expands, businesses are spreading their reach and facing various challenges. More specifically, as businesses expand in the international market, the concern for ethical issues and socially responsible behavior intensifies. Consistent with the rising interest in business ethics, we look into the case of Phone and Build elaborating the way the company should handle the situation. More specifically, we analyze the case and outline the types of claims the U.S. customers are likely to file in court and the arguments they might make for each element for cause of action. We also analyze the types of damages that could be awarded under the causes of action listed. Lastly, we explore the types of defenses hone and Build could present for each claim and the probability of winning.

In the United States, tort law is used to address damages caused by the conduct of another individual that is below the standard of care outlined by the civil courts. In particular, the primary purpose of tort law is to compensate individuals or entities who have suffered personal or property damage due to the wrongful conduct of another individual. Notably, the specific causes of tort law are several, but as (Okrent, 2015) notes, it can arise from intentional torts, negligence, and strict liability also known as product liability. According Okrent, negligence tort comes about ordinary care is not exercised and damage occurs. In negligence, it does not require the intent to do a wrong; rather the misconduct become negligent because the person was not reasonably careful and someone got injured. Intentional torts involve the deliberate intent to hurt someone or damage property. On the other hand, strict liability does not consider the intent or negligence, but for as long as someone got injured by the product or activity, then there is absolute liability. Consistently, the U.S. customers are more likely to file negligence and strict liability. In the case of negligence, the customers would argue that, while the damage was not intentional, the company was not reasonably careful to mitigate any future problems that may arise with the use of their products. On the case of strict liability, the argument is that, regardless of the intent, negligence, or fault, the company is liable to compensate its consumers who have suffered damage because of their products.

Types of Damages that could be Awarded

Damages are monetary awards ordered by the civil court to be paid to the victim by the party at fault. There are two types of damages awarded for tort violations – compensatory and punitive damages. Compensatory is meant to ensure the injured part is back to the same position they were in before the damage occurred, while punitive are intended to punish the offender. In the case of Phone and Build, the type of damage that could be awarded is compensatory to repair or replace the damaged property. Customers who were injured by the products could also be awarded compensatory damages to cover for pain and suffering.

Defences for Phone and Build

Ideally, in strict liability and negligence torts, business organizations can put up a defense for each claim a customer files. According to Mann and Roberts (2016), businesses can put an assumption of risk, comparative fault, or misuse or abuse or the product in strict liability and negligence torts. A critical analysis of the Phone and Build case indicates that, the company can put up a misuse or abuse of the product defense. The argument would be, the injured party knowingly used the product in a manner the seller did not intend for it to be used. The argument would be backed up by evidence showing that customers in Europe and South Africa have not experienced the problems that have occurred with the products in the United States. Consequently, only a small percentage of customers in the United States have had problems with the phones, which means they could have misused or abused the product. In a way, if the Phone and Build company put up a strong defence based on misuse or abuse of the product in court, they might win.

Business organizations have an ethical obligation towards the society. However, when a breach occurs, the consequence would most likely result in a tort. Companies are often involved in negligence and strict liability torts and are liable to pay for damages caused to the consumers. Additionally, although they have the option of putting up a defense, in most cases, tort cases end up favoring the customers.

References

Mann, R. A., & Roberts, B. S. (2019). Essentials of business law and the legal environment. Australia: Cengage.

Oumlil, A. B., & Balloun, J. L. (2017). Cultural variations and ethical business decision making: a study of individualistic and collective cultures. Journal of Business and Industrial Marketing, 32(7), 889-900.

Okrent, C. (2015). Torts and Personal Injury Law. Connecticut: Cengage Learning.