Question
Assume a car manufacturer identifies a new safety feature that, if adopted, would prevent $50 million in damages per year, including several deaths.The feature would
Assume a car manufacturer identifies a new safety feature that, if adopted, would prevent $50 million in damages per year, including several deaths.The feature would cost $30 per car, or $60 million for all 2 million cars the manufacturer produces in a single year.The cost could be passed on to consumers in the form of higher prices, but because competition is tight the manufacturer is reluctant to raise prices (and it obviously does not want to absorb the $60 million cost on its own).So it decides not to install the new feature.If someone is injured in an accident that could have been avoided had the new feature been installed, would the manufacturer be considered negligent under the formula outlined by Judge Hand inU.S. v. Carroll Towing?Do you think the Hand formula captures all of the considerations that are relevant to assessing whether the manufacturer exercised reasonable care?
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