Big Gold Mining was engaged in gold mining. In order to store supplies, the company built a shed near the edge of town. As supplies would come into town, those supplies would be stored in the shed until the appropriate time arose to transport those supplies to the mine. The supplies included shovels, hammers, drills, and a large quantity of dynamite. Big Gold Mining kept the door to the shed closed and locked with a padlock.

Several people in the town decided they had a way to make money. The town's people built a little store near the shed. As workers would come to the shed to get supplies, they would stop in the store to buy things. The store owners really made good money.

Big Gold had a problem they did not recognize. The weather conditions were such,that the dynamite containers began to deteriorate. Big Gold kept placing new boxes of the explosive in the shed without checking to notice that the old boxes were in trouble. One night, everything went wrong. The deterioration of the containers caused the dynamite to suddenly explode. It blew up the shed and all of the dynamite in it. The blast was so big, that the store near the shed was leveled.

The owners of the store sued Big Gold for the loss of the store. Discuss the possibility of recovery based upon Strict Liability. In answering, apply the doctrine of Rylands v. Fletcher (1868) and the six-factor test discussed in the Tort Law text.

(For an interesting explosives case that adds a serious causation problem see Yukon Equipment, Inc. v. Fireman's Fund Ins. Co., 585 P.2d 1206 (Alaska 1978)(excerpted in the Tort Law Text).