By: Sean T. Devenney
DuPont™, the maker of the lawn care product Imprelis™ has been dealing with claims that its product is harming trees in the area in which Imprelis™ was applied. See, for example, this article, which outlines the claims and allegations being made in the various lawsuits against DuPont. This case, like the Chinese Drywall issue that first arose a few years ago, serves as a prime example of what can happen to contractors caught in the middle between a manufacturer and the end user.
In claims involving allegations of a defective product, like the Imprelis™ example, the end user homeowner or property owner may first look to the contractor/lawn care professional to remedy the problem allegedly caused by the product. From the owner’s perspective, owners typically contract for a completed service or end result, while leaving it to the contractor’s discretion as to what products to utilize in order to deliver that result. Thus, even where the problem potentially lies with the product used, as opposed to the service provided, the owner looks to the contractor for a remedy. There can, of course, be defenses available to the contractor, especially when the owner directs or agrees with the contractor on use of a specific product. These types of claims also raise insurance coverage issues for the contractor, especially in situations where the damage is to the product itself, rather than damage to “other property”.
When the contractor notifies the manufacturer of the potential issues, the manufacturer may take the position that the product was misused and perhaps assign blame to the contractor for the issues. Thus, the contractor can be stuck in the middle between the owner and the manufacturer, without an easy remedy in sight. This scenario places the contractor at significant risk for extensive legal costs and the very immediate potential for a loss of business.
It is issues like these that keep contractors and lawyers up at night. The contractor, perhaps despite its best efforts to investigate the products it is utilizing, is brought to the brink of disaster by something it could not control or even foresee. To lawyers and contractors alike there is nothing worse than a situation in which the existence of the company is called into doubt for something that may be outside their control.
This is the kind of risk that must be managed through proper contracting and insurance. For instance, the contractor might be able to control its exposure through limitation of damages clauses or indemnity language in its contract with the homeowner, or through use of limited warranties and waivers of implied warranties. In addition, the contractor should explore insurance options to shift the products risk to an insurance carrier, if possible.