Overview: Business law impacts our everyday lives, both personally and professionally. Businesses enter contracts, manufacture goods, sell services and products,
and engage in employment and labor practicesactivities that must all adhere to certain laws and regulations. Recognizing and evaluating legal issues is a
fundamental skill that will help you navigate commercial relationships and avoid potential problems in the business world.
Prompt: Imagine yourself as a paralegal working in a law office that has been tasked with reviewing three current cases. You will review the case studies and
compose a short report for each, applying your legal knowledge and understanding of the types of business organizations. In each of the three reports, you will
focus on areas of law covered in this course. Case Study One focuses on the legal system, criminal law, and ethics.
Case Study One: Chris, Matt, and Ian, who live in California, have decided to start a business selling an aftershave lotion called Funny Face over the internet. They
contract with Novelty Now Inc., a company based in Florida, to manufacture and distribute the product. Chris frequently meets with a representative from
Novelty Now to design the product and to plan marketing and distribution strategies. In fact, to increase the profit margin, Chris directs Novelty Now to substitute
PYR (a low-cost chemical emulsifier) for the compound in Novelty Nows original formula. PYR is not FDA approved. Funny Face is marketed nationally on the
radio and in newspapers, as well as on the web and Facebook. Donald Margolin, a successful CEO and public speaker, buys one bottle of Funny Face over the
internet. After he uses it once, his face turns a permanent shade of blue. Donald Margolin and his company, Donald Margolin Empire Inc., file suit in the
state of New York against Novelty Now Inc. and Chris, Matt, and Ian, alleging negligence and seeking medical costs and compensation for the damage to his face
and business reputation. It is discovered that PYR caused Margolinsskin discoloration. The website for Funny Face states that anyone buying their product
cannot take Chris, Matt, and Ian to court. Novelty Nows contract with the three men states that all disputes must be brought in the state of Florida.
Specifically, the following critical elements must be addressed:
A. Apply the rules of jurisdiction to the facts of this case and determine what jurisdiction(s) would be appropriate for Margolinslawsuit against Funny Face
and Novelty Now, respectively. Consider federal court, state court, and long arm principles in your analysis.
B. Assume all parties agree to pursue alternative dispute resolution (ADR). Analyze the advantages and disadvantages of two types of ADR appropriate for
this case. Be sure to define the characteristics of each in your answer.
C. Applying what you have learned about ADR, which type would each party (Funny Face, Novelty Now, and Margolin) prefer and why?
D. Apply concepts of criminal law and discuss whether or not corporations and/or corporate officers may be held liable for criminal acts.
E. Identify, per the classification of crimes in the text, any potential criminal acts by Funny Face and/or Novelty Now.
F. Assume the use of the emulsifier PYR, at the direction of Chris, is a criminal offense. Apply concepts of criminal law and discuss the potential criminal
liability of Funny Face, Chris, Matt, Ian, and Novelty Now. Include support for your conclusion.
G. Apply at least three guidelines of ethical decision-making to evaluate ethical issues within the case study.
