Question

Lazlo purchased a Samsung S7 smartphone from a local Toronto retailer in 2019. Initially, he was very happy with the phones’ performance, including the convenience of its extended battery life. This satisfaction ended abruptly, however, when Lazlo notice his pocket warming up, and upon pulling his phone out to investigate, felt it explode and catch fire in his hands. Lazlo was driving a vehicle at the same time so he quickly pulled over and tried throwing the phone out the car window. He did not initially succeed because, to his horror, the burning phone had stuck to the flesh of his hand. In great pain, Lazlo then drove himself to the hospital. There, doctors confirmed that the explosion had caused severe burns to Lazlo’s hands and wrists. Lazlo had to take several months off work to recover.

When Lazlo first purchased his S7 smartphone (S7), he considered it to be a safe product which reviewed well. However, Samsung’s Galaxy Note7 had the opposite reputation – it was actually considered to be dangerous. Indeed, the Note 7 had been made subject to a product recall around the time of Lazlo’s purchase because its defective battery system caused short-circuiting, leading the phones to sometimes burst into flames. Infact, the Note 7s were considered such a menace that they were banned on Canadian and US airlines – both in the cabin itself and in checked luggage. Samsung offered refunds or replacement phones but class actions against Samsung in relation to Note7 have still been proposed in the United States and Canada, for example.

Lazlo wondered if the S7 was being afflicted by the same battery problem as the Note7 and his internet search confirmed that several class actions had been commenced in the United States in relation to S7s catching fire and causing damage. The class actions allege that the S7 devices, along with several other Samsung models, are defective because they can overheat and explode. Lazlo is very relieved to have found a Canadian law firm that is pursuing a proposed class action against Samsung in relation to the S7 and Note7 as well as other Samsung models, and he would like to join it. But whether alone or as part of a class action, Lazlo wants to recover damages from Samsung for the terrible pain he suffered from being severely burned, his loss of income while he was off work, and the fact that one hand suffers from numbness that could well be permanent.

Applying the relevant and correct principle(s) of law discuss the following questions:

a) Explain the most applicable tort Samsung may have committed in relation to its S7 product   (4 marks)

b) Discuss what Lazlo have to prove in order to establish that tort and the defence(s) (if any) open to Samsung in this action? Test the elements of the tort identified against the scenario to determine whether an action based on the tort is likely to succeed. Provide reasons for your answer, with proper reference to the fact situation and the law.   (6 marks).

Note: Application means you have to identify the correct legal concept, define it, enumerate the elements and then apply it to the fact scenario before drawing conclusion.

The answers to each question should not exceed 1 page in length. Penalty will apply if length restriction is breached; 2 marks to be deducted. Marks will also be deducted for works without citations, bibliography and references.

PLEASE ADD REFERENCES.

Answer 1

Answer:

Question 1

The most applicable tort Samsung may have committed in relation to its S7 product is the breach of warranty and fraud. Consumer warrants are governed by the Magnuson-Moss Warranty Act of 1975 that covers all consumer product warranties in the United States for products worth more than a few dollars (The Federal Trade Commission, 2015). According to the law, a retailer or manufacturer should provide warrant to the consumer assuring them that the product meets certain standards of quality and reliability. Should the product fail to function as advertised, the retailer might be held accountable (The Federal Trade Commission, 2015).

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Question 2

The plaintiffs will have to prove that Samsung knew that their product was faulty before they put it on sale in order to make the case strong or have a likelihood of success.

Also, the court will consider the fact that Samsung was trading products they knew the consumers had an obligation to pay third parties for exposes them to liability and special damages for breaching warranty. Also, the plaintiffs will have to prove that failed to conduct necessary tests for dangers or defects and that Samsung knew that the end consumers would not or could not properly inspect the devices for defects as doing so would be beyond their capabilities.

In addition, the plaintiffs could argue that the phone was defective in its design and manufacture hence failed to function as advertised and that Samsung failed to warn the users of the hazardous conditions presented by the device.

One of the best arguments that the plaintiffs could make is that the risks posed by the phone far outweigh its utility and that a safer, more feasible and practical alternative design could have prevented or reduced the likelihood of the battery to explode.

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The plaintiffs could also argue Samsung was negligent and failed to honor its obligation to the consumers by negligently engaging in sale, manufacture, design, testing, assembly, supply, importation, and distribution of S7 Edge phone when the product was unfit, not suitable and unsafe.

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Based on these facts, the consumers could invoke the three rules under the Magnuson-Moss Warranty Act on the Rule on Disclosure of Written Consumer Product Warranty Terms and Conditions (the Disclosure Rule), the Rule on Pre-Sale Availability of Written Warranty Terms (the Pre-Sale Availability Rule), and the Rule on Informal Dispute Settlement Procedures (the Dispute Resolution Rule) (The Federal Trade Commission, 2015). Using these rules, the best course of action would be to argue that Samsung engaged in Fraud by not disclosing the functionality or risks posed by the device.

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References

Federal Trade Commission. (2015, August 7). Businessperson's guide to federal warranty law. https://www.ftc.gov/tips-advice/business-center/guidance/businesspersons-guide-federal-warranty-law#Magnuson-Moss