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November 1997

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Subject:
From:
Ed Cosper <[log in to unmask]>
Reply To:
TechNet Mail Forum.
Date:
Fri, 21 Nov 1997 09:42:30 -0600
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Mr. Johnson,

I find your response interesting. This question has be the main topic of many conversations I have had over my career. 
The debates have ranged from points of "doing the right thing" to the economical impact of the potential loss of a company due to a bad board. I have been to told by a few people that a court of law  can only impose a liability of 3 time the amount of the selling price. However, I have yet to ever read this in print and fortunately I have not had to find out the hard way. So to date I consider this just an opinion. ( I have learned no to believe anything unless I see the appropriate documentation! ) I am curious how the law governing these things really reads.  I didn't see your title on your response, are you an attorney?

As an example, Say a small company ( 6 mil / yr ) built a circuit board and missed a short during the electrical test. The Customer accepted the parts, assembled them, placed them in a unit and shipped the unit to there customer.  The unit shorted out, created a fire and burned down the building and costs the end user millions in damage, Would the bare board manufactures be liable for the entire loss?  If so this would obviously result in the closure of the company and loss of jobs over a single board.  God help us if the insurance companies find out about this. Along with mandatory auto liability and seat belt laws we will find ourselves required to carry liability insurance for our products by law!  

Just Curious...

Ed Cosper

----------
From:  William E. Johnson[SMTP:[log in to unmask]]
Sent:  Thursday, November 20, 1997 4:19 PM
To:  [log in to unmask]
Subject:  Re: [TN] GEN: Liability

In the absence of a contract that defines or limits the scope of liability,
a manufacturer can be liable not only for the direct losses, such as the
buyer's replacement costs, but also for consequential damages - those
damages that were reasonably foreseeable to the parties at the time they
entered into the contract. The scope of consequential damages can be
enormous - if you supply a defective part that is incorporated into a piece
of equipment that is resold,  the damages can be as much as the value of the
company if it is destroyed. Therefore, it is very important to have a strong
sales contract that limits your liability to the purchase price of the
product that you are selling, and to define and disclaim what  warranties you
are and are not making with respect to that product.
-----Original Message-----
From: Tri-C Dave Roesler <[log in to unmask]>
To: [log in to unmask] <[log in to unmask]>


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