corporate responsibility in advertising, product safety and liability presented by: akrit mehta,...
TRANSCRIPT
CORPORATE RESPONSIBILITY IN ADVERTISING, PRODUCT SAFETY
AND LIABILITY
Presented By:
Akrit Mehta, Ankita Ghosh, Donald White, Farhana Choudhury, Harish Dalwaipattan,
Niyati Gauba
Agenda
What is Corporate Responsibility ?
Corporate Responsibility Advertising Product Safety Product Liability
What is Corporate Responsibility ?
Corporate Responsibility is an expression used to describe what some see as a company's obligation to be sensitive to the needs of all of its stakeholders or even to society as a whole in its business operation
Advertising
Can be defined as a form of communication between buyer and seller
Provides consumers with information about the goods & services
Its goal is to persuade
Deception- example
Ads for diet products and services sold each year often include misleading and exaggerated claims that promise rapid, effortless weight loss and unachievable goals
At least 40 percent of the 300 ads reviewed in the two- year study made at least one false representation, such as 'can eat as much as you want and still lose weight‘
Other ads made unproven claims about safety and effectiveness, when there was little to support that claim.
Ads directed at Children
Significant consumer group
Low resistance to deception/manipulation
Problem – gullible / naïve
Example : The Centre for Science in the Public Interest announced legal action to try to stop the Kellogg Co from aggressively marketing high-sugar, low-nutrient foods to kids
Corporate Responsibility in Advertising
Advertising needs to ensure
Are the public welfare and good taken into consideration for the effects as well as the intention of advertisements?
Has anyone been harmed?
Whose rights are being protected or violated intentionally and inadvertently?
Are consumers being justly and fairly treated?
Corporate Responsibility and Government Enforcement
Government , at times bans or restricts commercial speech to obtaining a public policy goal
Example : The basic argument for restrictions on tobacco
advertising stems from the belief that tobacco advertising leads to an increase in overall consumption and also that this advertising contributes to minors smoking
Product Safety
Refers to measures undertaken by manufacturers against unreasonable risks of injuries associated with consumer products.
The responsibility of manufacturers to consumers concerning:
Product quality Prices Labeling Packaging
Need for Product Safety
Increased dependence of consumers on manufactured goods
Informed consumers
Prevention of consumer exploitation
Potential hazards associated with consumer products
Product Safety Issues
Injuries from product use
Safety manuals
Statutory warnings
Costs from deceptive selling practices
Emotional costs
Loss of goodwill
Product Safety Issues
Costs from defective goods
Physical damage
Collateral damage
Adherence to societal and consumer norms
Disclosure of confidential information
Doctor/Lawyer client relation
What is Product Liability ?
This is the area of law in which manufacturers, distributors, suppliers, retailers, and others who make products available to the public are held responsible for the injuries those products cause.
Encompasses a number of legal claims that allow an injured party to recover financial compensation from the manufacturer or seller of a product
Product Liability
Claims are associated with :
Negligence, Strict liability Breach of warranty Various consumer protection claims
Types of Product Liability
There are three major types of product liability claims:
Manufacturing defect Design defect A failure to warn
Legal Liability of Manufacturers
Provide customers with a product that lives up to the claims the firm makes about the product
Due-care theory of the manufacturer’s duties to consumers
Caveat emptor Strict Liability
Due Care Theory
Due care is the idea that consumers and sellers do not meet as equals and that the consumer's interests are particularly vulnerable to being harmed by the manufacturer, who has knowledge and expertise the consumer does not have.
According to the due care view, the manufacturers have an obligation above and beyond any contract, to exercise due care to prevent the consumer from being injured by defective products.
Caveat Emptor
“Let the buyer beware”
The law now requires that goods must be of “merchantable quality”
CE also applies to the return policy
There is no legal requirement for the vendor to provide a refund or exchange
Caveat Emptor
According to the doctrine of caveat emptor, consumers were held to the ideal of being knowledgeable, shrewd and skeptical in their purchases.
It meant that the consumer was entirely responsible if harmed by a purchased product.
Product Liability Law in India
The Consumer Protection Act, 1986
The Sales of Goods Act, 1930
The Monopolies and Restrictive Trade Practices Act, 1969 (“MRTP Act”)
Cases
Stella Liebeck vs. Mc.Donald's Corporation
Smt. Uma Deepak v. Maryti Udyog Ltd. & Ors
Wheels World Vs. Pradeep Kumar Khurana