Business Law - Lecture I
Prof. Dr. Vito Roberto
St. Gallen, 20.09.2023
From insight to impact.
Liability Law
1. Learning Goals, Learning Materials &
Introduction
2. Overview of Liability Provisions
3. Conditions for Liability
4. Producer Liability
5. Liability Pursuant to PrLA
6. Corporate Strategies to Prevent Liability
Hilti Case Study Parts 1-4
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Introduction
Learning Goals
− Understanding the basic principles of business law on the basis
of selected areas of law.
− Gaining the ability to cope with business law work done by
lawyers and to manage their input efficiently.
− To this end…
− the focus will be on the relevance of legal questions to
successful business activity, and
− insights into the dangers and opportunities of legal
influences within a business environment will be conveyed.
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Learning Materials
− Script Introduction to Business Law Volume II & III
− Business Law Exercise Book
− Statutes
− Flash Cards
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Liability Law
Contract Law,
Capital/Finance Market
Law
3rd Parties
Lenders
Supervision
Government/int.
Taxation
Organizations
Regulation
Law Enforcement
Suppliers
Business Entity
Competitors
Federal Act Against
Unfair Competition (ATA)
Cartel Law
Intellectual Property Law
Contract Law
Customers
Contract Law
Consumers
Intermediaries
Contract Law
Consumer Protection Law
Federal Act Against
Unfair Competition (ATA)
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Overview of Lectures
In what ways is a company liable for its products?
→ Liability Law (L1)
How do the different types of companies differ?
→ Overview of Types of Companies (L2)
How is a Company Limited by Shares established, how can the capital be increased/
reduced and how is it organized?
→ Company Limited by Shares (L3 & 4)
What are the stages of corporate acquisitions and/or mergers from a legal perspective?
→ M&A (L5)
How is a group organized and what special features must be taken into account?
→ Corporate Law (L6)
How does a company get into financial crisis?
→ Companies in Crisis (L7)
What measures can be taken up to avert a financial crisis?
→ Restructuring Law (L8)
In what ways is a company‘s management liable?
→ Responsibility Law (L9)
How can I protect innovation in a business?
→ Intellectual Property Law (L10-12)
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Overview of Liability Provisions
Overview of Liability Provisions
Elements of Liability
Contractual liability
art. 97, 101 CO
art. 102 et seqq. CO
art. 197 et seqq. CO
art. 367 et seqq. CO
etc.
Non-contractual liability
Liability for fault – general provision
art. 41 CO
Product liability (PrLA)
Elements of liability for fault are
stipulated by law in
art. 55, 56, 58 CO
art. 333, 679 CC
Strict liability («Gefährdungshaftung»),
i.e., art. 58 Road Traffic Act,
art. 40b Railways Act
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Conditions for Liability
Overview
1
Unlawfulness
= Violation of a duty of care
(no prerequisite for strict liabilities)
Infringement of a
legally protected interest
= Personal (life, health, freedom, personal
rights)
= Physical (property rights)
3
Legal causation
= Causal link between unlawful conduct
and the infringement of the legally
protected interest
4
Fault
= Conduct is attributable to the person –
capacity of judgment
2
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Conditions for Liability
Purely contractual claim if
Purely non-contractual claim if
-
an outstanding debt is not paid.
-
a vehicle is damaged in an accident.
-
a purchased vehicle is not fit for its purpose.
-
-
a painter painted a wall in the wrong shade.
a craftsman on a scaffold empties a bucket
of paint and befouls a pedestrian.
-
a doctor misinforms a patient on health
insurance reimbursement.
-
a dog bites a hiker.
-
a logistics company delivers to the wrong
location.
-
a rotten branch falls onto a parked vehicle.
-
-
a lawyer misses a deadline.
a touring skier uses a slope for his valley run
and skis into an unmarked pole in the middle
of it.
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Conditions for Liability
Both, a contractual and a non-contractual claim, if
− the brakes of a purchased vehicle fail, and the buyer is injured.
− a craftsman empties a bucket of paint and damages his customer‘s carpet.
− an animal injures a spectator during a circus performance.
− a rotten tree branch on a landlord‘s property falls onto his tenant‘s parked
vehicle.
− cargo (belonging to the consignor) is damaged.
− a skier with a day pass skis in an unmarked pole in the middle of a slope.
− an employee embezzles money.
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Producer Liability
Producer Liability
1
Infringement of Duty of Care,
art. 55 CO
= The producer has to ensure that his products cause no
harm to third parties.
2
Construction Defects
= The producer infringes his duty of care on the level of
design or development of a product.
Manufacturing Defects
(not for outliers)
= The product concept is free of flaws, but a product is still
faulty, and this goes unnoticed due to insufficient final
product inspection.
4
Product Information
Defects
= The producer has to prevent improper use by end-users by
means of warnings/notifications of danger (product
information).
5
Product Monitoring Duty
3
= The producer has to monitor risks even after the
products are launched.
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Liability Pursuant to PrLA
Conditions for Liability Pursuant to PrLA
= Movable object, even if it forms part of another
movable object or immovable object.
= electricity
1
Art. 3 PrLA: Product
2
Art. 4 et seqq. PrLA:
Defectiveness (Infringement of
= If it does not offer the safety which a person is
reasonably entitled to expect under all
circumstances.
Art. 1, 6 PrLA: Infringement of
a Legally Protected Interest
= The faulty product harms:
− a person
− objects in private use
duty of care; outliers)
3
4
Adequate Causal Link
= The defectiveness of the product has to be suited for
causing the occurred damage in the ordinary course
of events and according to life experience.
NOT fault-based!
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Example - McDonalds
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Corporate Strategies to
Prevent Liability
Corporate Strategies to Prevent Liability
= Management of quality assurance
= Clear assignment of responsibilities
= Strict separation of development and
construction
Documentation
= Definition of quality management
written in a quality assurance manual
Internal
Organization
= Testing and monitoring procedure
= User information
= Product surveillance
Contracts
Covering the Risk
= Contractual definition of internal relationships
with respect to manufacturers, suppliers,
distributors and importers
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Hilti Case Study
Hilti Case Study Part 1 (1/2)
Hilti needs five new service cars for its sales representatives. The cars are ordered
at the car dealer. The producer is a German car manufacturer.
A sales representative is injured in an evasive maneuver that caused the car to
overturn. As it turns out, numerous similar accidents have occurred in the past few
months.
1. What is the legal situation?
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Hilti Case Study Part 1 (2/2)
Another representative is driving the new company car when an axle breaks. The
vehicle suffers total loss. The sales representative as well as the front-seat
passenger, the apprentice, are injured.
2. What is the legal situation?
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Hilti Case Study Part 2 (1/2)
Hilti has purchased a pressing machine from Tools Ltd. Because a production
worker did not pay attention, he hurts his hand while operating the machine.
3. What is the legal situation?
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Hilti Case Study Part 2 (2/2)
As the pressing machine does not work properly, considerable amounts of metal
plates must be disposed of as scrap metal.
4. What is the legal situation?
After merely two months in use, the pressing machine is defective.
5. What is the legal situation?
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Hilti Case Study Part 3 (1/2)
One of the Hilti’s employees regularly used to tan in a sunbed of the German
Alpha Group. He had bought the device 8 years ago at Beta Ltd. in Zurich. Just
recently, he was diagnosed with skin cancer.
6. What is the legal situation?
He discovers that the radiation of the device is much higher compared to new
devices.
7. What is the legal situation?
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Hilti Case Study Part 3 (2/2)
One of Hilti’s apprentices suffers from poisoning because she drank out of a bottle
at a disco in which someone had put a poisonous substance.
8. What is the legal situation?
Hilti’s receptionist gets diabetes because she has drunk too much Coca-Cola in her
life.
9. What is the legal situation?
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Hilti Case Study Part 4 (1/2)
In view of the production of the eccentric sander, Hilti purchases 500 electrical
circuits of the recently developed type “BSK 2000” from its partner company of
many years “Komo Ltd.” (hereinafter “Komo”). Komo has its headquarters in
Oerlikon.
Upon delivery of the circuits, Hilti’s incoming goods department notices that the
first 20 circuits of the delivery do not work at all when examining the products.
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Hilti Case Study Part 4 (2/2)
When the quality manager applies the customary test procedure to examine the
21st circuit, he suffers an extremely powerful electric shock and is thrown to the
ground. He is knocked unconscious for a moment. The rescue service immediately
transferred him to the hospital. Due to the injuries suffered during this workrelated accident, he has to go on sick leave for one week. Hilti’s testing device was
completely destroyed in this incident.
10. What contractual and/or non-contractual claims may Hilti and the injured
employee raise against Komo?
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Thank you.
Prof. Dr. Vito Roberto
vito.roberto@unisg.ch
Universität St.Gallen (HSG)
Dufourstrasse 50
9000 St.Gallen
unisg.ch
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