BUS FPX 3021 Assessment 3 Business Entity Implications for Contracts BUS-FPX3021 Fundamentals of Business Law Business Entity Implications for Contracts
The MacPherson v. Buick Motor Co. case remains pivotal for business law as it established a foundation for modern product liability principles. The case underscores that manufacturers are accountable for the safety of their products, regardless of whether components are sourced from third parties.
This ruling is especially important for today’s corporations, such as Apple Inc., which rely on complex supply chains for producing devices. The case highlights the ethical responsibility of businesses to implement rigorous quality control standards and conduct thorough testing to prevent defects that could lead to consumer harm. For companies that produce millions of products annually, this duty of care is even more critical, as any defect could lead to widespread injuries.
Moreover, from an ethical perspective, businesses must avoid the temptation to prioritize profit over consumer safety. As Zipursky and Goldberg (2016) argue, large corporations must operate with the mindset of a “real being,” understanding that they are responsible for the well-being of their customers.
Avoiding the Pitfalls of Negligence in Today’s Economy
Had the court ruled in favor of Buick, it would have upheld the precedent set by the English case Winterbottom v. Wright, which limited manufacturer liability to direct purchasers. Such a ruling could have led to corporations avoiding liability by outsourcing potentially dangerous components to third parties, shielding themselves from negligence claims.
In today’s economy, with vertically integrated businesses that produce and source their components globally, the consequences of such a precedent would be detrimental. A company could, for instance, avoid responsibility for defective components by spinning off subsidiaries for each part. This unethical business practice would jeopardize consumer trust and ultimately harm the company’s long-term success.
Long-Term Implications for Corporate Accountability
The lessons from MacPherson v. Buick Motor Co. are clear: companies must prioritize the safety of their products, even at the expense of short-term profits. Negligence in quality control, whether intentional or due to oversight, can lead to significant legal and ethical consequences.
Today, businesses must strive to balance profitability with corporate responsibility. As consumers become more aware of product safety, companies that invest in quality control and ethical production practices will be rewarded with greater trust and loyalty from their customers. Conversely, those that cut corners to save costs will face legal battles, reputational damage, and financial losses.
Conclusion:
The 1916 ruling in MacPherson v. Buick Motor Co. remains a cornerstone of product liability law, reinforcing the idea that manufacturers are responsible for the safety of their products, regardless of how components are sourced. The ethical implications of this case are equally profound, reminding corporations that they must act with vigilance and responsibility toward their customers. By understanding the lessons from this case, modern businesses can navigate the complex legal landscape of product liability while maintaining high standards of corporate accountability.
References
Rabil, J. (2020, January 9). 4 types of business entities. Launch PLLC. https://www.launchstrategylegal.com/2020/01/09/4-types-of-business-entities/.