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Re: Servicing Second Hand Modules - Legal Issues

2008-07-25 by drmabuce

--- In wiardgroup@yahoogroups.com, "xartdigital" <xartdigital@...> wrote:
>
> 
> > However, legal liability can arise from innocent seeming actions. 
> Take the matter of 
> > replacing older faceplates with newer ones. This seems a very 
> innocent request, but can 
> > create a legal liability problem for myself and/or Wiard.
> 
> Grant - Start putting serial numbers or Date of Manufacture on them.
> This is how every other business get around this issue.
>

The issue of Grant's demurring from factory rework seems to keep
resurfacing. My day job is in the field of high value vehicle hardware
and so i'll add my two-cents.  Referencing what i'm sure was
xartdigital's well-meaning comment. i'd like to rejoin that  through
my business' experience i have seen firsthand that  serial numbering
(mfr lot etc.) systems , even when implemented at the component level
do not mitigate the risk of accessory to fraud (civil) prosecution .
It's true that lawyers can  (and do) sue anybody for anything, but the
real issue is whether they do so successfully . 
We deal with some ultra-fancy car dealers in the UK and we observed
that we were selling them Rolls Royce fasteners. We did so because 
Rolls Royce hires these dealers to install Rolls Royce parts on Rolls
Royce cars. The dealers order the parts from -us -(in the USA- we
import them from Rolls Royce in Goodwood)  We then export them back to
the UK! Needless to say a lot of middlemen make money on this. The
reason for this absurd choreography is that Rolls Royce has been
successfully sued on multiple occasions for doing what they considered
a service for their customers;  the by-product of which was that the
vehicle's perceived value increased  and the buyer claimed that he was
defrauded when he discovered that (ie) what he believed was a 2005
phantom was a 2004 phantom with 2005 door panels. Further R.R. marked
all reworked parts with an engraved dash number and appended  a
description of the rework to the vehicles online factory  `pedigree' .
They were sued successfully anyway. Yes, it's absurd but it happens
and rest assured every last component of those machines are numbered
with lot and serials. It gets better… if the original owner has the
work done (even with all genuine R.R. parts) by a third party. Then
there is no tort. The byzantine reasoning behind this is that a
factory `upgrade' imparts the perception of genuine provenance where
the third-party upgrade does not. 
It sounds like a Samuel Becket play! But it's worked in court. We
ourselves questioned their sanity when they wanted us to re-export
parts back to the UK but they assured us it was more than worth our
(pretty steep) markup to do it this way. And R.R. is only one instance
among other cases we've seen in automotive and  aviation markets …and
anything else wherein a finished product garners a collectible status.
My observation is that this is especially true when rework involves
parts that are easily visible.
Now i realize that there's a hell of difference in scale between R.R.
Phantoms and Wiard 300's (so far) but even the necessity of a legal
consultation fee could damage the cash flow of a one-man show like 
Wiard. It's regrettable that the litigious mindset has imposed these
risks but the risks are real, i've seen them firsthand and serial
numbers are not an effective defense when  a legally aggressive buyer
can show the original manufacturer to be `complicit' in rework

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