Posted by Anirudh Ramesh.
Companies need to provide high quality services. If companies provide defective or unsatisfactory services, they may be subject to legal action. Tesla is an automotive manufacturer. They specialize in building electrical cars and solar panels. Tesla had failed to provide reliable equipment to Walmart. Thus, the company opened itself to legal issues.
“The Walmart suit alleges breach of contract, gross negligence and failure to live up to industry standards. Walmart is asking Tesla to remove solar panels from more than 240 Walmart locations where they have been installed, and to pay damages related to all the fires Walmart says that Tesla caused.” (cnbc.com) According to the contract with Tesla, Tesla is supposed to provide reliable equipment. However, Tesla did not pay heed to the defectiveness of the solar panels that were installed. This resulted in property damage to Walmart. In addition, Tesla used amateurs to inspect the panels. Tesla should have used knowledgeable personnel to inspect the solar panels.
Since Tesla could not perform the contract that it had agreed to, it is subject to breach of contract. Tesla needed to be more careful and should have taken measures to prevent this loss from occurring. Since Tesla could do neither of the two things, it will be held accountable to pay Walmart for damages. Since Walmart has sued Tesla, an out of court settlement will be ideal.
Anirudh is an accounting and IT major at the Stillman School of Business, Seton Hall University, Class of 2021.