Mulan has just bought a new power drill made by MacTools Ltd. Mulan lends the power drill to his neighbour, Aurora. He gives her the box containing the drill, along with the instructions. The instructions include a safety warning saying that users of the drill should wear protective goggles. Aurora does not read the instructions.

After Aurora had used the drill for ten minutes it catches fire and explodes. As a result of the explosion, Aurora loses an eye. MacTools Ltd was aware of the fact that there was a 1% chance that a short-circuit might occur if the drill was used for longer than 5 minutes, but that it decided not to do anything, because a recall of the drills would have cost the company $ 500 000.

The fault in the drill also led to an interruption on the electric power supply in the street where Mulan and Aurora live, just at the moment when Jessie, who is a glass worker, was making a glass vase. The vase, which is worth $ 1 000, is shattered when the power goes off.

Advise MacTools Ltd as to its legal position, citing relevant legal authority, using the ILAC format.

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