Dog collar business
I make handmade dog collars and leashes in my spare time. I am thinking of turning this hobby into an Enskild Firma or AB. AB seems interesting so that the liability falls on the company and not on me personally.
Do I have the right to mention in my term & conditions that I cannot be held liable for nor accountable for any damage or loss caused (in)directly by use of its products? It's explicitly written as:
"All materials eventually wear down. To ensure the safety of your dog(s), please always check for signs of wear & tear or defects before each use. By purchasing a product from X you as customer are responsible for determining the suitability of these products for your individual situation. X products are not suitable for dogs who pull heavily on the leash. This could potentially result in the leash or collar breaking. You as the customer are responsible for the safety of yourself and your dog(s). X can not be held liable nor accountable for any damage or loss caused (in)directly by use of its products."
- Can I make this statement?
- Does this cover everything?
- Do you have any further advice regarding this matter?
- Would you advise getting liability insurance for an enskild firma?
Thank you so much for the help!
Lawline svarar
Dear prospective businessowner!
Thank you for choosing to turn to us at Lawline for help with these questions. I will go through them one by one.
- Can I make this statement?
This text contains a few statements that will likely be rendered invalid by the Consumer Purchase Act (CPA) or the Product Liability Act (PLA). Any agreement clauses that repeal rights given to consumers in these laws are invalidated by these laws (3 § CPA and 5 § PLA). I will list the ones I suspect are not in line with the law.
1. "By purchasing a product from X you as customer are responsible for determining the suitability of these products for your individual situation"
Erronous professional advice is grounds for liability. If the customer asks for your advice and you give them advice, after which following the advice results in damages, you are liable for said damages (19 § 1, 2 section CPA).
Also, any factual statement made regarding the product is an implicit guarantee that the fact is true (NJA 2001 s. 309).
2. "X products are not suitable for dogs who pull heavily on the leash"
This statement contradicts the purpose of the product. The product must be able to withstand the purpose intended for it by the buyer, if the seller must be expected to be aware of said purpose(16 § 2 section 2 point CPA). You could go around this by making the leashes small, so that they cannot be used for larger dogs. The leash must be capable of holding any dog it is put on, because that is its purpose.
If a leash breaks as a result of a dog pulling on it, you will be liable for any damages resulting from the dog not being on a leash (3 § PLA).
3. " X can not be held liable nor accountable for any damage or loss caused (in)directly by use of its products."
This statement cannot be made. The law is not optional here. Both of the laws in this context are mandatory for the seller. You can offer better terms than they set out as minimum, but never worse terms.
- Does this cover everything?
It is impossible to know these things beforehand. I advise you to contact the Consumer Agency if you have questions that arise while conducting you business. Their purpose is to help educate the public on consumer law, and will help you for free with most questions. With more advanced questions I advise you consult a legal professional.
Most questions that arise in commercial situations have already been addressed in law, so there is little you need to deal with them yourself. There is an info page in english on the Consumer Agency homesite that lists most of the consumers rights. You can use this as a guide for most matters.
- Do you have any further advice regarding this matter?
Consumer protection laws in Sweden are strong compared to other countries. Freeing yourself from liability is not an easy task here. The Consumer Agency is able and willing to help, so consulting with them is any easy way to navigate consumer rights in particular and sales law in general.
You should take advantage of the AB company form, as it keep you personally free from debt in case your business fails. Enskild firma has a smaller administrative burden, but is not suitable for larger enterprises, as you will be personally liable for any debt incurred by the company.
If you wish to keep your enterprise small, Enskild firma is better, because it is easier to manage. If you wish to expand and start a significant business, AB is better, because you will not have to worry about personal exposure to debt.
Also, if you make unique designs, you could trademark your products at Patent-och-registreringsverket. The Swedish Patent and Registration Office is the centre for intellectual properties of all types.
- Would you advise getting liability insurance for an enskild firma?
I advise you to get liability insurance for both AB and Enskild firma. From what I can tell you have a solid business idea, and it would be a shame if a legal conflict prevented you from realising it. While AB does let you "off the hook" by declaring the company bankrupt and liquidating it, being the owner of a bankrupt company is never an appealing prospect.
With Enskild firma, common sense demands you have legal insurance, as a major legal conflict could send you into personal bankruptcy. That should be avoided at all costs.
Note: The translation for the names of the laws my be incorrect. You can always use the law's swedish names for clarification. You will find them by clicking the links.
I hope this answears you questions.
Good luck with your business,
