View Single Post
  #9   Report Post  
clare @ snyder.on .ca
Posts: n/a
Default Cheap import tools and product liability (was: Violent Electric Drill Accident)

On Thu, 17 Jul 2003 12:44:35 -0700, Jim Stewart

clare wrote:

On Thu, 17 Jul 2003 09:08:48 -0500, Richard J Kinch

The recent thread "Violent Electric Drill Accident" got me wondering about
places like Harbor Freight Tools and their product liability. The local
store sells an amazing array of dangerous tools. We all know how shoddy
and defective some of them are, and notwithstanding the "electric drill
accident", surely there are many cases where a faulty tool hurts somebody.
What I cannot understand is how they can run a store and sell, oh, angle
grinders for $14.99, since they must be getting sued all the time. So much
of their stuff is obviously dangerous, and I don't mean in the usual power-
tool-requires-common-sense way, such as the toys they sell for children
(100 lb go-kart with no effective brakes!) that you can't buy anywhere else
because no American firm could survive the lawsuits. Does the Chinese
mafia come to visit if you have a "problem"? Does anyone know how HF is
organized and defends itself?

The common method is to make yourself "judgement proof". All profits
are expensed out to an "arms length" entity on a monthly basis so the
company has no assetts. All property and chattels are leased. No
insurance if they can get away with it. Can't get blood out of a
stone, so the lawyers take one look, say there is nothing there, and
move on.

First, the usual 'I am not a lawyer' disclaimer.

I doubt that this would work for Harbor Freight. First of all, they
have intangible assets such as their 'good name'. Secondly, if they
could not pay off a big judgment, the court might order them to be
sold at auction to satisfy the debt.

And if there are no assets to sell????
That is the pivotal assumption. The sale of a corporation with no
assets cannot begin to pay damages. If the assets (merchandise) are
all owned off shore ( in China) and sold on consignment, there is
nothing to sell.

NOT saying HF plays this game, but there are many who do, world-wide.