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Question:

Discuss about the Commercial Law for Samsung Note 7.

 

Answer:

A tort law put in simplified terms refers to, committing a civil violation against an individual party causing them harm, and thus making them able to sue for damage charges. Samsung electronics producer is held responsible for tort negligence, due to the diverse damages that occurred after the manufacturing of Samsung galaxy note 7.The following paper discusses the details of how Samsung galaxy manufacturers are held liable for the damages that occurred to Australian consumers, due to failures of the manufacturing and faulty battery design.

Samsung galaxy note 7 is an android Smartphone whose use has since been put to an end, produced in the year 2016 by Samsung electronics. It is a successor to galaxy note 5 hence it is recorded as the sixth device in the series of galaxy notes. The Samsung electronics is however blamed for failing to take part in the process of duty to warn its consumers on the faults that occurred during the manufacture of the product, Samsung galaxy note 7. The duty to warn is a perception arising from the tort law prompted by various circumstantial situations. These duties explain that a specific party which has a chance to forewarn on impending danger pertaining to faults they are aware of likely to occur, but fails to do so, is subject to suing for resultant damages and injuries.   The duty to warn is a case that sprouts up from product liability actions. 

 

Reason of Damages Caused by Samsung Note 7

According to Mr. Koh, the chief of Samsung mobile, the company admits to being held responsible for failing to examine and authenticate, the evident problems brought about in the designing and production of the Samsung note 7 batteries (Sang-Hun and Mozur, 2017). The hasty introduction of Samsung to the market without further detailed checkup was prompted by the stiff competition posed by apple’s iPhone 7 (Tilley, 2017). However, battery professionals present at the meeting announcement blame the decision of battery design as the main point of problem occurrence (Samsung completes the investigation of Note 7 explosions; sends the report to regulators, 2016).

Samsung settled on the option of producing a thinner separator within the battery, with the belief that it would stand out more powerful compared to the other batteries. The vital component, a separator, responsible for separating positive and negative electrodes is said to be prone to cause a fire if it is faultily fixed (Strange, 2017). During the investigations carried out by a safety company hired by the Samsung Company, findings proved that the thinness of the separator led to poor protection against battery damages. Moreover, the battery's high energy density is responsible for the increase of failure occurrence. Claims are also blamed on Samsung for their incapability to genuinely create safe ideas due to facing pressure from their opponents. The company is also responsible for the harsh treatment of workers thus influencing their work competence.

 

Product Liability

In cases of product liability, the manufacturer or producer is held responsible for injuries or damages arising from their product use by consumers (Versteeg, 2015). Furthermore, the consumer has the right to sue the producer for failure to issue an advanced warning on the side effects that may arise due to the use of the product or, issuance of proper instructions guiding on the use and maintenance of the product at hand. According to the commercial laws of Australia based on business products, failure of the producer to comply with the above statement will lead to the law concluding to the defectiveness of the product (Versteeg, 2015). Based on the case of Samsung galaxy note 7, it is evident that the company issued a number of warnings to its consumers due to the safety concerns in relation to the product.

Additionally, there are several claims that commonly associate with cases of product liability and they include; negligence, violation of warranty, stern liability and other protection claims in relation to the consumer safety. Product liability laws are said to vary in different existing states depending on the state level (Versteeg, 2015). According to restatement of torts, there are three major distinguishing types of product liabilities:

  • Defects related to manufacturing: these defects occur during the process of manufacturing and majorly results from the use of materials with poor quality and unskilled or incompetent unskilled labor.
  • Designing defects are most likely to take place when the design at hand is naturally unsafe or ineffective despite the keen focus in the steps of manufacture. Proof of design flaws is possible by effectively showing how the product has failed to satisfy the consumers’ ordinary expectations in regards to the entailing of a safe product. In addition to that, the existent risks portrayed in the use of the commodity which in turn seem to outweigh any comparable benefits of the product’s design.
  • Defects in marketing which is also referred to as failure to warn. Defects arising from the failure to warn, most likely come up in products containing natural dangers that are not obviously known, unless keen observation and investigations are carried out on the product.

Based on the business requirements stated in the Australian Consumer Law, every consumer has the right to be provided with guarantees and remedies on the goods and services offered by an individual business or company consumer guarantees comprises a set of rules in application to any goods and service offered to a consumer by a business (Rippee & White, 2012). These rules are available so as to outline the different situations under which a consumer is supposed to be given a suitable remedy in case of product damage or defect. Furthermore, the Australian Consumer Law states that those liable to meet the terms of consumer guarantees are none other than the business providing services and goods, manufactures of goods and importers of goods. According to Samsung manufacturing company, the consumers are entitled to some specific rights against the manufacturer in reference to the Australian Consumer Law (Latimer, 2016).

Businesses selling goods are required to provide a full proof guarantee to its consumers that; the goods being sold are of up to standard quality (Versteeg, 2015). This means that it is mandatory for the goods to be safe, durable, and non-faulty and meet the satisfactory needs of clients. The merchandise sold should be use-flexible thus fitting the specified need intention of use by the buyer. The product should be precisely described. It is advisable that the merchandise matches a sample of the provided model. Express warranty should be satisfied by the presence of the commodity. The title of the product should be clear. The goods displayed should be accompanied with a rightful possession and use, curbing any rights of preventing the consumer from using the good. Most importantly, the goods should have available spare parts and easily accessible repair centers availed for a good time allowance (Versteeg, 2015). 

On the other hand, the provision of remedies should the guarantee not be met as stated by the Australian Common Law entitles the consumer to a remedy by the company or retailer at which the good was purchased (Latimer, 2016). There are two common faults which entitle a consumer to the rightful remedial course. They are the major and non-major failure.  In accordance with the Australian Common Law, a major failure is bound to occur if:

  • The consumer in charge of purchasing a certain commodity is unaware of the negating issue concerning the condition of the good sold.
  • If the goods are considered unsafe.
  • If the goods are proven to be unfit substantially to suit their intended purpose.

Samsung due to its concern for clients made the following remedies available: If the goods are in a repairable state, Samsung has the moral duty to correctly repair the faulty good. Offer similar good replacement. Refund the payable amount used in purchasing the commodity. If the goods have undergone severe damage and therefore cannot be repaired, the client is at will to reject the goods or ask for compensation from the Samsung Company.

The Australian consumers, based on the findings of Samsung's faulty battery, have every right to file damage complaints against the manufacturer and producer. Samsung visibly puts its interests ahead of its consumer's safety.  They quickly processed and introduced Samsung galaxy note 7 to the market so as to be ahead of their competitors. In so doing they failed to conduct the necessary checkup to ensure that their product was fault free. Additionally, it is known that after the dangers of using Samsung galaxy was exposed by the rampant explosion of battery, the company decides to shut down the use and existence of all Samsung note 7s ( Ribeirot, 2016). The abrupt shutting down of this technological device after its introduction to the market greatly affects consumers who have already purchased the commodity.

Additionally, the Samsung Company is supposed to issue refunds to all clients who purchased the phone. The refunding process is likely to incur major losses to the company but lucky enough, according to the statistical findings carried out by the company, the profits earned due to Samsung’s great sales is enough to cater for all the expenses.

 

Damage Caps

Whenever a plaintiff takes the step of suing a company, producer or manufacturer on claims of faulty products that led to personal injury, the plaintiff always has the hope of receiving compensation (Boeschen, 2017). Harm arising from cases of personal injury is limited to a variety of concepts lying in the legal law. These types of damage caps include; non –economic caps, changes to traditional laws and punitive caps.

Economic harm relates to the total cost spent as a result of the injury. Most personal injuries require medical attention which may cause a certain amount. Other injuries may lead to property damage thus requiring repair. In summary, the economical damage is any harm that occurs causing one to spend their money in regaining a previous state of existence. Non-economic caps, on the other hand, result in inward damage that is emotional.

 

Importance of Caps on Personal Injuries and How They Help in Limiting Torts

The role of damage caps is to help manage the high cost of business terms normally directed to the client as a certain product, in turn, reducing service provider's liability. In simple terms, mistakes are bound to happen in any creation done by a normal human being. Some people who tend to be harmed or negatively offended by the faulty acts tend to overly exploit the defaulters. In so doing, they claim for high amount compensations which may heavily incur debts and costs to the accused. Damage caps are licensed by insurance companies ensuring fair compensational charges are made and after a thorough follow-up has been done. Some plaintiff may also wrongly accuse faulty products to a consumer when the main cause of damaged produce is as a result of the client poorly handling the commodity (Boeschen, 2017).

Additionally, damage caps discourages the unscrupulous act by which people use to setting up lawsuits with the belief of extorting huge sums of money from the accused party (Boeschen, 2017). All courts will want to deliver a just ruling and not appear to favor one party. The court is not a business bargain area but a place that offers true justice to those who truly deserve it.

According to Hartley (2017), the report on Samsung galaxy note 7 faulty batteries says it caused a hotel room to explode. This only means that the hotel had to undergo renovations so as to restore the previous state of appearance that had been damaged due to the explosion (Strange, 2017). More so, it is likely that some people got injured and had to seek immediate treatment.

Conclusively, the setting up of commercial laws is an important measure since it helps protect the interests of both the consumer and their service providers. The availability of business laws makes it easier to follow up on damage claims and to precisely ensure complete and fair business transactions.

 

References

Boeschen .C. 2017. Damage Caps and Other Limits on Personal Injury Compensation. https://www.alllaw.com/articles/nolo/personal-injury/damage-caps-limits-compensation.html

Hartley, S. (2017). The Case Of The Exploding Samsung Phones. Busidate, 25(1), 9-12

Latimer.P.2016.Australian Business Law.

Ribeirot, J. (2016). Samsung kills off the Galaxy Note7 to end the exploding battery debacle. Pcworld, 35(11), 27-29.

Rippee, S. M., & White, E. E. (2012). Stabilization of Product Liability Law by Statute: Mississippi as a Case Study. Defense Counsel Journal, 79(3), 329-346.

Samsung completes the investigation of Note 7 explosions; sends the report to regulators. (2016). FRPT- Software Snapshot, 17-18.’

Sang-Hun .C and Mozur.P. 2017. Samsung Galaxy Note 7 Crisis Signals Problems at Korea Inc. The New York Times.  https://www.nytimes.com/2017/01/23/business/samsung-galaxy-note7-fires.html?_r=1

Strange. A. 2017. Finally, Samsung reveals why the note 7 exploded. Mashable inc. mashable.com/2017/01/22/samsung-note-7-investigation-findings/

Tilley, A. (2017). Samsung Finally Opens Up On Investigation Into Note 7 Fires: Blame The Batteries. Forbes.Com, 1.

Versteeg, R. (2015). Product Liability and Commercial Law Theories Relating to Concussions. Journal Of Business & Technology Law, 10(1), 73-11 

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