The "what if..." scenario follows.
"What-If..." scenario: In contracts with ADs, GC includes an indemnification clause stating that the AD would cover claims by third parties harmed directly as a result of the ADs actions.
A GC AD contracts to clean concrete floors in a commercial building in North Carolina using Floor-ex, a cleaning solution, purchased from GC (manufactured by EPI and sold to GC for resale distribution).
The AD's employee spills a large tub of Floor-ex on the job site resulting in the following:
the building owner slips on the spill, is injured and misses 3 weeks of work;
the building owner hits a piece of equipment in the fall causing it to slide resulting in damage;
Floor-ex splashes on the wall, staining it and part of the wall must be replaced.
The building owner files a lawsuit against the AD and GC for negligence, as well as for product liability. The building owner seeks compensation damages for:
medical expenses and economic loss from her injuries;
costs for repair to the building wall;
costs for repair to the damaged piece of equipment.
The GC owners ask TLG's opinion about their liability if a situation like the "what-If..." scenario occurred with one of their ADs. TLG's response will influence the owners' final decision about whether to use ADs in their new business.
Instructions:
Winnie and Ralph asked you to discuss the "what-If..." scenarios and analyze the related potential liabilities with an attorney TLG has on retainer.
Winnie and Ralph want you to then summarize the attorney's analysis in a memorandum to them for further discussion with the GC owners.
The memo should analyze and explain:
Part I. Green Clean
1. The strengths of the plaintiff's negligence claim against GC;
2. Potential defenses, if any, GC could assert in the negligence claim;
3. The strengths of the plaintiff's product liability claim against GC;
4. Jurisdiction issues if GC was sued in North Carolina.
Part II. Authorized Distributor
5. The strengths of the plaintiff's negligence claim against AD;
6. Potential defenses, if any, AD could assert in the negligence claim;
7. The strengths of the plaintiff's product liability claim against AD;
8. Whether, if AD is found liable for negligence and for product liability, AD could sue GC to recover damages paid to the plaintiff?