The company has a good reputation for its products that are exclusively sold through its own factory outlet (there are no intermediaries in the sale). Recently, that is, in the past few months, the company has had some complaints pertaining to malfunctions of the wheels and tow bar, which are actually outsourced products and not the company’s own. While the base, wheels, and axles are produced within the UK, the tow bar and couplings are imported from Russia through a UK company. After the customer complaints began to be known, ‘Outback’ brought out a note and attached it to the packing of the tent trailers disclaiming any liability for foreign products not meeting British standards.
The company also installed testing machines to scan each product sold by the company. Although some parts are purchased from outside and not made in-house, the company outlet is displayed prominently on the outside with advertising placards that read that the components, make and standards of the trailer tents are 100% British. An accident occurred to Jerry Summer and family while using the trailer tent that had been purchased from ‘Outback’ along with the liability disclaimer, but before the test equipment had been set up. The accident occurred on account of defects in exactly the outsourced parts of the wheel that became loose, and the tow bar coupling that failed, resulting in the trailer crashing into the car and the car veering out to hit an embankment. Jerry and his family suffered severe, but not fatal, injuries. The question now is whether Jerry Summers’ tort liability suit under the Consumer Protection Act will stand and, if it will, with what extent of loss to the company. The partners fear that the court’s award of damages may totally cripple the company, leading even to the closure of a business.