Overview: Contracts and Product Liability

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Background to Contracts and Product Liability A contract is an agreement that is voluntarily entered into by two or more parties that specifically causes a legal obligation. Within the original contact there is, then, the expectation that all parties would perform as agreed unless the parties agree together to change the terms of the contract, or the actions of the party that deviates from the terms of the contract are ratified (implicitly accepted) by the other party. Product liability is an area of law in which any organization that either makes products (manufacturers) or distributes to the public (makes available) may be held responsible for potential injuries that may be caused by those products. In the United States, claims for product liability are usually associated with some type of negligence, breach of warranty, or other consumer protection issues. However, the large majority of product liability laws vary considerably because they are determined from state to state. This, of course, makes it problematical to litigate across state boundaries, as well as ensure that manufacturing requirements are met more universally (Golden, 2000). Overview of Company and Product Safety Issue Baxter International is an American health care company based in Illinois. Its 2010 sales were approximately $13 billion, and the company employees about 50,000 workers. The company focuses primarily on products that treat renal issues, hemophilia, immune disorders and other chronic and

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