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11 - Customer-Centered Enterprise Liability

Published online by Cambridge University Press:  04 August 2010

Peter M. Gerhart
Affiliation:
Case Western Reserve University, Ohio
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Summary

Thus far, I have claimed that none of the justifications usually given for various manifestations of strict or enterprise liability are superior to the theory of other-regarding behavior as a justification for the level of responsibility courts impose. Another class of cases is sometimes given as an example of strict or enterprise liability that I have not accounted for: cases in which enterprises reasonably impose harms on some customers for the benefit of all customers but courts nonetheless impose a duty to repair the harm (even though the enterprise has acted reasonably). Two cases are representative. In Lubin v. Iowa City, the city waterworks consciously decided not to inspect or replace pipes in the ground because the cost of inspection would have been too great. The location of any defect in the pipe was unpredictable, the cost of inspecting the length of the pipe was high, and inspection could not always disclose where repairs were needed. As a result, the waterworks knowingly and reasonably ignored the risk of burst pipes, allowing the costs to fall on the people where the pipes did in fact burst. They were found liable for the harm thus inflicted, even though their inspection policy was reasonable.

Similarly, McDonald's kept the heat of its coffee high, knowing that the high temperature would increase the harm from accidental spills. They did this because they felt that they would lose substantial customer goodwill if they turned down the heat of the coffee.

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Publisher: Cambridge University Press
Print publication year: 2010

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