Manufacturer resolves a defective-parts dispute
Faulty welds forced a recall, then a fight over who pays.
The questionWho pays for a recall when a supplier's parts fail inspection?
Illustrative example
FORT WAYNE, Ind. — An equipment maker will receive $2.05 million from a parts supplier to cover a recall caused by failed welds.
The manufacturer recalled hundreds of units after the supplier's welded parts failed inspection.
The case turned on recall costs and the warranty terms between the two companies.
Orlesse Law commissioned metallurgical testing on the failed parts and relied on the supply agreement's warranty clauses.
The supplier agreed to pay $2.05 million toward the recall.
The settlement does not include an admission of fault.
Warranty and indemnity clauses decide who pays when parts fail.
About this story
Submitted by the firm. Source review: details provided and attested by the firm. See our publication standards.
