Question

In: Accounting

Rim Corporation makes the rims for cars that it sells to Tesla Motor Cars, Inc. Tesla...

Rim Corporation makes the rims for cars that it sells to Tesla Motor Cars, Inc. Tesla uses the rims to manufacture all of its models of cars. One set of the rims are defective when they left Rim’s control. An inspection by Tesla would have revealed the defective condition of the rims if Tesla performed it. Tesla sold the car with the defective rims to the Tesla Dealership. Tesla Dealership sold the car to Sven. Soon the car was in an accident due to the defective rim and Sven was injured. Is Tesla Motor Cars, Inc. liable for Sven’s injuries? (1 point). Please explain the legal theory that Sven may use. (2 points).

Solutions

Expert Solution

Yes, in this case Tesla Motor Cars, Inc. will be liable for Sven’s injuries. The provisions of law will hold Tesla Motor responsible for the defect and will allow Sven to claim damages from Tesla.

The legal theory that Sven may use in this case is the theory based on “product liability law”. The theory based on “product liability law” is used to find out who is responsible for defective products. Here Tesla was responsible for placing a car with defective rims in the hand of Sven. Even though the rim was manufactured by Rim Corporation the eventual responsibility will rest with Tesla as it is the manufacturer of its cars that are being sold to buyers like Sven. Theory of negligence can be used by Sven in which he can say that Tesla owed a legal duty of care to him and Tesla was responsible for selling car that was safe. This duty of care was breached when Tesla sold a car that had defective rim and this made the car unsuitable and accident prone.


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