Devoted to Corporate Attorneys, Corporate Lawyers, and Corporate Counsel

The following is not meant to be legal advice.

Two major U.S. children's products manufacturers announced product recalls in the early weeks of September 2007.  Up to 200,000 Thomas & Friends (well known for Thomas the Train) toys have been recalled by RC2 Corp.  Kolcraft recalled 425,000 playpens.

As with Mattel, the product recalls bring negative publicity to the companies, but many do not realize that product recalls actually have a bright side.  If the manufacturer of a product knows that a product has defects or there have been complaints about a product, recalling the product puts some responsibility on the user.  The user should return the product, but if the user does not and continues using the product knowing the defects, it could put a stop to any liability if the user ends up injured because of the use. 

The recall helps the manufacturer in terms of settling complaints with customers.  The settlements may be more easily reimbursed by insurance if the manufacturer openly states that it has told its customers of the risks, and that it is recalling the product.

Outsourcing the manufacture of products may be an issue these days with most toys made in China.  China has been getting a lot of slack these days for the defects publicized on toy recalls.  There was an article in the recent issue of CFO.com on the topic.  However, it may not be the place of manufacture that is the issue, but the quality control of the manufacturing plant.  When a company goes abroad to do business, it should be sure to check the facilities to make sure that the products are made under the same conditions as they are domestically.