Question

Chemical Company created a new product called “Tire Shine” to clean the oil and tar from car tire rims. Chemical company sold 1,000 bottles of “Tire Shine” to Amazon, who then sold the product to Ferrari Corp. Ferrari received and used the “Tire Shine” from Amazon without altering the product. “Tire Shine” however caused harm to Ferrari employees who used the product, even though they used the product as instructed. In random checks of the “Tire Shine” bottles received by Ferrari it was discovered that the fumes from the bottles of “Tire Shine” were extremely toxic. If Ferrari can “prove” that Amazon sold the product “Tire Shine” without warning of any dangerous conditions on the warning labels and Chemical Company didn’t fully warn of the toxic and dangerous conditions, both companies could be liable under what two different causes of action? 1) Please identify which company is liable for which cause of action, 2) then explain your answer by listing the elements of each cause of action and applying the appropriate facts.

Answer 1

Both companies could be liable under what two different causes of action?

Yes, because both companies are having different business, contracts and terms and conditions as a buyer and supplier. The business in Chemical Company to Amazon is having implicit and written contact while Amazon and Ferrari is having explicit contract which is generic for every Amazon costumer.

Answer:

1) Please identify which company is liable for which cause of action,

Cause of action for Ferrari (Plaintiff) vs Chemical Company (Defendant): The cause of action is “FRAUD”.

Cause of action for Ferrari (Plaintiff) vs Amazon (Defendant): The cause of action is “BREACH IN CONTRACT”.

Cause of action for Amazon (Plaintiff) vs Chemical Company (Defendant): The cause of action is both “FRAUD” and BREACH IN CONTRACT”.

2) Then explain your answer by listing the elements of each cause of action and applying the appropriate facts.

Elements for Cause of action for Ferrari (Plaintiff) vs Chemical Company (Defendant) [FRAUD]:

· Representation: The instruction given by Chemical Company on “Tire Shine” was false

· Compelling assertion: While preparing the product, the employee of chemical company must have tested it before releasing to market but still they have not printed the list of Do’s and Don’t’s.

· Relying of Plaintiff: Ferrari employee harmed relying on product.

Cause of action for Ferrari (Plaintiff) vs Amazon (Defendant) [BREACH IN CONTRACT]:

· Parties: Amazon and Ferrari.

· Breaching Party: Amazon

· The explicit contract from Amazon to it’s costumer is they (Amazon) will do the quality check of product before selling it to market. But the product has not been verified and directly sold to Ferrari.

Cause of action for Amazon (Plaintiff) vs Chemical Company (Defendant):

              [FROUD]

· Representation: The instruction given by Chemical Company on “Tire Shine” was false

· Compelling assertion: While preparing the product, the employee of chemical company must have tested it before releasing to market but still they have not printed the list of Do’s and Don’t’s.

· Relying of Plaintiff: Amazon lost Ferrari’s trust.

[BREACH IN CONTRACT]

· Parties: Amazon and Chemical Company.

· Breaching Party: Chemical Company

· Harm due to Action of Defendant: Loosing of business