Case:
Amanda and Simon run competing personal hygiene products businesses. They both produce and sell
organic soaps, shampoos and sanitizers. They sell their products at the same price, but Amanda’s
products are preferred by the local customer base. Simon wants an edge in the market, and starts looking
for ways to improve his business. Simon decides to hack into Amanda’s production plant’s security
cameras. Upon doing so, Simon discovers that Amanda’s sanitizers use alcohol, and thus, are not organic.
He also discovers that Amanda only produces sanitizers in her production plant, and does not produce
any soaps and shampoos herself. Instead, the soaps and shampoos that Amanda sells are produced by
Robert, who owns a renowned personal hygiene products manufacturing business. Robert produces and
delivers the soaps and shampoos to Anna’s production plant, where they are labelled and sold as
Amanda’s products. At the local organic market later that day, Simon tells customers that Amanda’s
sanitizers significantly increase the risk of eczema, because they use alcohol. While it is true that
Amanda’s sanitizers are not organic (i.e. use alcohol), Amanda uses a moisturizing agent in her sanitizers
to counter the impact of alcohol on the skin. Thus, Amanda’s sanitizers do not actually increase the risk
of eczema. Amanda ends up losing $1,700 in sales that month due to Simon’s comments to customers.
Simon also meets with Robert, and tells him that he would like a similar arrangement to Amanda’s,
where he would focus on producing sanitizers only, and Robert would produce the other personal
hygiene products. Robert tells Simon that his contract with Amanda prevents him from manufacturing
personal hygiene products for Amanda’s local competitors. Simon offers Robert a 20% premium over
the price that Amanda pays him, provided that he stops producing Amanda’s personal hygiene products
and starts producing exclusively for him. Robert agrees to do so, and as a result, Amanda loses $800 in
sales as she is unable to supply soaps and shampoos while she makes alternative arrangements.
Furthermore, while she is able to secure a new personal hygiene products manufacturer, the products
provided lather less, making them more difficult for customers to use, thus causing Amanda to lose
customers and a further $4,000 in sales that month.
Outraged with Simon’s actions, Amanda decides to confront him. While walking through Simon’s
production plant looking for him, she overhears an angry customer, Mike, threatening to sue Simon and
telling him that he bought soap from Simon at the local organic market and while using it, he found
small pieces of metal in the soap, causing him to cut his hands badly. Mike indicates that his medical
bill amounted to $250. Simon inspects the bar of soap Mike provides to him, and realizes that it was
indeed produced by him and that it actually has metal pieces in it. However, Simon argues that he has
very rigorous quality controls during and post production, and that he personally inspects samples of
every product type as an additional quality control measure. Simon also indicates that he follows
international production standards and has never had any safety issues prior to this. Amanda focuses on
the ensuing argument and does not see several large bottles of glycerin randomly placed in the middle
of the production plant. She ends up walking into the bottles, causing her to fall and break her leg. She
looks up and notices that the bottles are not in a storage area, and that there are no hazard signs to warn
passersby to be careful where they step. Amanda is taken to the hospital, and pays $600 for treatment.
Discuss, using the IRAC method, all the tort-related lawsuits that could result from the above set
of facts.
The post Personal hygiene products businesses. first appeared on COMPLIANT PAPERS.