Highlights
In general, a supplier’s obligation is to ensure the safety of its goods to the end consumer. A supplier does not owe a duty of care to other commercial parties in a supply chain.
Courts are reluctant to recognize that commercial parties in a chain of contracts are provided additional rights outside of a contract where the parties had the chance to address any risks through the contract.
Franchisees should not necessarily rely on extra-contractual claims to protect against potential risks and should negotiate these risks ahead of time or insure against them.
Franchisors entering into exclusive supply agreements for their franchise system should consider alternative supplier clauses in the event the supply of products is interrupted.