Question

In: Economics

Moran vs. Faberge (1975) At a slumber party held at the home of Louis Grigsby, Randi...

Moran vs. Faberge (1975)

At a slumber party held at the home of Louis Grigsby, Randi Williams poured Faberge “Tigress” cologne into a burning candle in order to make it a “scented” candle. The perfume, composed of 82% alcohol, was highly flammable and caught fire. The resulting flames caused severe burns to the neck and torso of Randi’s friend Nancy Moran. The Moran family sued the Williams family and the Grigsby family, and both were found not guilty. The Williams family also sued the Faberge company, on the basis of the fact that there was no warning on the product indicating that it was highly flammable, even though the manufacturer knew that it was highly flammable. The trial court found Faberge liable for $30000 in damages. Faberge appealed.

The appeals court noted that manufacturers (as of 1975) had a duty to “produce a safe product, with appropriate warnings and instruction when necessary”. Thinking in terms of the Hand rule, it noted that printing a warning on a label is indeed a very cheap precaution, but that there also must be some identifiable benefit to printing the warning for failure to print a warning to become failure to meet a duty.

The appeals court then ruled against Faberge.

QUESTION:

1. Did Faberge fail in its standard of care according to a Hand rule? (That is, if there had been a warning of flammability on the product, would the benefit to society in the form of fewer losses due to accidents outweigh the cost of printing the warning?) Or is the ruling wrong, because it is too costly to ask companies to foresee and try to safeguard or warn against every bizarre type of product use?

Solutions

Expert Solution

Moran vs. Faberge (1975)

From the case study it is clear that the court has found a punishable offense against the manufacturer the Faberge and action was taken over them. The action was taken over them, was due to the failure in giving the warning for the masked danger in that particular product.

The court found that it is the sole responsibility of the manufacture company to place the warning over the product which contains the hidden danger in it. And it may leads to cause injury to the consumers or Thiers property or it may cause dangers when handled with the things which people exercise naturally. So the manufacturing company must give the warning on the product, which will allow people's to handle the product with care.

According to Hand rule, the stand of the court can be justified. Hand rule is actually named after the judge Learned Hand, and this law is the pioneer of the other laws which try to define the standard of care when there is a negligence detected. When this case analyzed with this law, we can find that the result of negligence can be avoided if the proper warning had give with the product. So the company is responsible for this and accountable for this negligence. Hence the decision of the court faithful and it is the accurate step had to be taken.


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