A unusually high number of accidents have occurred with the car model ABC from Company X for whom we are the suppliers. The drivers complained about not being able to control their cars. Closer investigations have revealed that this was due to nature of transmission in the Car. Company X is blaming us as we are the producers of the transmission.
The Transmission is the assembly of parts including the speed-changing gears and the propeller shaft by which the power is transmitted from an engine to a live axle. The model ABC was intended by Company X to have a sportive feel while not being a Sports Car. They gave us specifications and we have manufactured the said no: of parts with those exact specifications. The problem appears when the car has to turn around a bend on the road; it behaves like a typical rear wheel drive vehicle. This was due to the fact that the transmission was intentionally designed to behave this way, although the inherent design was that of an all-wheel drive. However, this unexpected behavior of the cars caused a high number of accidents with this car.
Discuss:
Theory of liability
Who can sue
Who can be liable
defense
damages