Academic Master

Business and Finance

Product liability

Question 1

In my opinion, U.S retailers should not be liable, and the companies should be exempted from the tort liability.  This is because it is the U.S government that has failed to set measures and regulations to monitor quality control and scrutinized imports from China.

Through this policy, the U.S consumers are bound to face the consequences such as severe illnesses, death or physical impairments due to consumption of contaminated products. (Priest, 1991)

Question 2

Steps to minimize liability exposure

. They should warn consumers of the dangers by using warning labels in their packages that say that the origin and ingredients of the product are unknown, then this possesses a responsibility to the consumer to decide on whether to use the product or not. (Shavell and Steven, 1984)

The retailers can as well search for new cost-effective suppliers to supply their customers with efficient and effective goods that do not have the potential of harming them.

Assessing the company potentially

Assessing the company potential can be done through scrutinizing the unique and the significant features of the company product. If those product features are difficult to duplicate, then this defines that the business will succeed in overseas due to little competition and high demand for the product.Another common approach is the examination of the product success in the domestic market. if the company is successful in the U.S market, then there is a chance to also succeed in global markets in places where similar conditions and needs exist

Finally,  the product may still have export potential regardless of the declining sales in the united states. Sizeable markets might exist if the product was once highly demanded in the U.S despite its decline in sales.

Labeling these products will, however, cause the business losses and decline in sales volume because no consumer will risk using products that are labeled that they can cause potential harm to the user. In conclusion, it is senseless for a company to purchase and sell inferior goods.


Priest, G. L. (1991). The modern expansion of tort liability: its sources, its effects, and its reform. Journal of Economic Perspectives5(3), 31-50.     

Shavell, S. (1984). Liability for harm versus regulation of safety. The Journal of Legal Studies13(2), 357-374.             



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