Question

Consider 13.7 IKEA learned that one of its meat prod were not made entirely of beef. Horse meat ucts contained horse meat. The company's costs about one-fourth of the cost of beef. Swedish meatballs were tested in the Czech IKEA pulled the meatballs from its stores Republic, and officials found traces of horse and in-store cafeterias. Food sales account meat. IKEA withdrew its Swedish meat- for about 5% of IKEA's total store revenues. balls from 14 European countries. During early 2013, Nestlé and other large European tive meatballs if the company did not pro- food producers learned that some suppliers duce them. What about the liability of the had been selling them meat products that suppliers? Discuss IKEAs liability for the defec-

• Discuss IKEA's liability for the defective meatballs if the company did not produce them.
• What about the liability of the suppliers?

This criterion is linked to a Learning OutcomeDiscuss producers' liability What are the legal issues?
This criterion is linked to a Learning OutcomeShow understanding of product liability
This criterion is linked to a Learning OutcomeDiscuss IKEA's liability What are the legal issues?
This criterion is linked to a Learning OutcomeWhich codes or warranties, if any, are applicable?

Answer 1

There are two legal issues in this case. The first legal issue will arise between IKEA's and its customer because IKEA's was selling the meatball to their customers in which horse meat was found. They were selling frozen meatballs to their customers so that they will be able to cook those at home and they were also selling those meatballs at their cafeterias. In this case, the warranty of merchantability will apply to both types of sales. Selling meatball with Horse meat can be treated as a breach of warranty of merchantability for both types of sales. The meatball which contains Horsemeat can be treated as defective meatball and if any customer eats that, it will be dangerous for their health. So, for this case, the product liability of Section 402A of the Restatement of Torts will apply. But it is not possible to claim for negligence and fraud since IKEA wasn't aware of the problem with the meatball that their suppliers were supplying.

Another legal issue will be between IKEA's and its supplier with whom they were purchasing the meatball. If we assume that IKEA was selling the meatball even though they know that the meatball they were selling contains Horsemeat then they must be doing fraud. But in reality, IKEA wasn't aware of the problem with the meatball which they were getting from their supplier. So, the fraud is committed from the supplier side and IKEA will have a right of recovery from its suppliers for the breach of contract.