Tanenbaum Keale LLP associate Timothy Freeman was recently published by DRI’s quarterly publication, For The Defense, on steps that manufacturers can take to avoid liability that is created when a dealer or distributor fails to properly inform or instruct consumers.

Freeman writes that dealers and distributors are important components in the supply chain that gets products to consumers, and in some states, dealers are statutorily required. However, problems may arise when a dealer’s incentives are not entirely aligned with manufacturers, or when they do not have complete information as to why certain instructions and information must be conveyed to consumers.

He touches on apparent authority; insignias and trademarks; contractual and common law indemnification; and the potentially liability that is created when manufacturers rely on dealers to complete certain tasks.

“It is important to create a seamless bridge between corporate operations and on-the-ground sales and marketing,” Freeman concludes. “Manufacturers that are directly involved in messaging at the ground level have a much better chance of stopping inaccurate information or omissions before they spread and lead to litigation. Manufacturers should spend the time to keep a close eye on what dealers/distributors are telling consumers about the product and the representations that they are making.”