Forums

US Regulatory

Started by bbhack June 17, 2013
Hypothetical: If I have a product that plugs in, has power supply, 
micro, and SSR, can I sell this as a *kit*, even shipping the parts 
separately, with hypothetical purpose when assembled - without ETL mark, 
and not incur stupid liability? ImNAL, and I understand that there is no 
such thing as no liability.

The purpose for doing so is to test the demand for such a thing, without 
tossing all the cash for testing for a product which may be a turkey.

The only put together parts will be a PCB with tiny parts count, and a 
case. Everything else is pretty much off the shelf.

Here's a BOM:

Case
Power cord (110VAC)
GFI
PCB (switcher, micro, a few passives, fuses)
SSR
Receptacle (110VAC)
Switches, LEDs (maybe LCD)

TMI: The selling entity will definitely be an LLC.

I know the basic rules. *If you have nothing, you have nothing to lose. 
*Lawyers go after money only.

Feedback appreciated. I know this is close to OT, if not.

On Sun, 16 Jun 2013 23:31:31 -0500, bbhack wrote:

> Hypothetical: If I have a product that plugs in, has power supply, > micro, and SSR, can I sell this as a *kit*, even shipping the parts > separately, with hypothetical purpose when assembled - without ETL mark, > and not incur stupid liability? ImNAL, and I understand that there is no > such thing as no liability. > > The purpose for doing so is to test the demand for such a thing, without > tossing all the cash for testing for a product which may be a turkey. > > The only put together parts will be a PCB with tiny parts count, and a > case. Everything else is pretty much off the shelf. > > Here's a BOM: > > Case Power cord (110VAC) > GFI PCB (switcher, micro, a few passives, fuses) > SSR Receptacle (110VAC) > Switches, LEDs (maybe LCD) > > TMI: The selling entity will definitely be an LLC. > > I know the basic rules. *If you have nothing, you have nothing to lose. > *Lawyers go after money only. > > Feedback appreciated. I know this is close to OT, if not.
Here's what little I know. 1: To get dependable legal advise, ask a lawyer. I ain't one. 2: Your post is misnamed. Liability isn't a regulatory issue, it's a matter between you and whoever is suing you. 3: If it attaches to the power lines, there may be regulatory issues involved, but that goes beyond liability. 4: I've been told that merely forming an unfunded shell corporation to sell something doesn't protect you, if you're obviously doing it as a shield. Basically, if you're doing this as an individual selling something neat, then do so with the knowledge that someone may come after you. Ditto if you're an individual trying to establish a market. If you're doing this as a business venture and you're established, you should maybe talk to your lawyer and your insurance agent. -- Tim Wescott Control system and signal processing consulting www.wescottdesign.com
On 6/20/2013 11:22 PM, Tim Wescott wrote:
> On Sun, 16 Jun 2013 23:31:31 -0500, bbhack wrote: > >> Hypothetical: If I have a product that plugs in, has power supply, >> micro, and SSR, can I sell this as a *kit*, even shipping the parts >> separately, with hypothetical purpose when assembled - without ETL mark, >> and not incur stupid liability? ImNAL, and I understand that there is no >> such thing as no liability. >> >> The purpose for doing so is to test the demand for such a thing, without >> tossing all the cash for testing for a product which may be a turkey. >> >> The only put together parts will be a PCB with tiny parts count, and a >> case. Everything else is pretty much off the shelf. >> >> Here's a BOM: >> >> Case Power cord (110VAC) >> GFI PCB (switcher, micro, a few passives, fuses) >> SSR Receptacle (110VAC) >> Switches, LEDs (maybe LCD) >> >> TMI: The selling entity will definitely be an LLC. >> >> I know the basic rules. *If you have nothing, you have nothing to lose. >> *Lawyers go after money only. >> >> Feedback appreciated. I know this is close to OT, if not. > > Here's what little I know. > > 1: To get dependable legal advise, ask a lawyer. I ain't one. > > 2: Your post is misnamed. Liability isn't a regulatory issue, it's a > matter between you and whoever is suing you. > > 3: If it attaches to the power lines, there may be regulatory issues > involved, but that goes beyond liability. > > 4: I've been told that merely forming an unfunded shell corporation to > sell something doesn't protect you, if you're obviously doing it as a > shield.
That's not quite the issue. Everyone is "obviously" trying to not pay taxes, stay out of jail and be shielded from liability. The actions you can take to minimize each of these things are not mitigated by your intent, but by the egregiousness of your actions. There are things that you can do that will pierce the protection of a corporate shell. For example, you can be relieved of simple liability with a contract, but in many jurisdictions "gross negligence" will abrogate a contract. Likewise, negligence can be criminal and a corporation won't shield you if you made the decision or even if you didn't but should have!
> Basically, if you're doing this as an individual selling something neat, > then do so with the knowledge that someone may come after you. Ditto if > you're an individual trying to establish a market.
Perfect examples of when you might want corporate protection.
> If you're doing this as a business venture and you're established, you > should maybe talk to your lawyer and your insurance agent.
Always good advice if possibly pricey. -- Rick
On 06/21/2013 04:47 PM, rickman wrote:
> On 6/20/2013 11:22 PM, Tim Wescott wrote: >> On Sun, 16 Jun 2013 23:31:31 -0500, bbhack wrote: >>
...
> > That's not quite the issue. Everyone is "obviously" trying to not pay > taxes, stay out of jail and be shielded from liability. The actions you > can take to minimize each of these things are not mitigated by your > intent, but by the egregiousness of your actions. There are things that > you can do that will pierce the protection of a corporate shell. For > example, you can be relieved of simple liability with a contract, but in > many jurisdictions "gross negligence" will abrogate a contract. > Likewise, negligence can be criminal and a corporation won't shield you > if you made the decision or even if you didn't but should have! >
Reading recently, the author writing about LLCs said holding property in your name is crazy. The fact you have some property to hold means you have something to go after. There is no legal construct that will protect someone from his criminal behavior or gross negligence.
> >> Basically, if you're doing this as an individual selling something neat, >> then do so with the knowledge that someone may come after you. Ditto if >> you're an individual trying to establish a market. >
If this was a battery operated thing with no lasers, I think the question would be easy to answer. Not many people die from 110VAC electrocution in the backyard, but it can happen. That's pretty much the entire fear here. So the question was, can the responsibility (liability) be shifted somewhat by selling something similar to a toaster, which can electrocute you or burn your house down, by selling it as a kit that the end-user / operator has to assemble? I understand why this can't be answered, but I thought maybe someone would have a similar story or something.
> Perfect examples of when you might want corporate protection. > > >> If you're doing this as a business venture and you're established, you >> should maybe talk to your lawyer and your insurance agent. > > Always good advice if possibly pricey. >
I've been disappointed with some legal advice in the past, because they have a responsibility to the client and tend to be as conservative as possible in their advice for their own protection.