Business Law: Margolin Empire Inc. vs. Novelty Now and Funny Face

This business law assignment analyzes a case involving Margolin Empire Inc., Novelty Now, and Funny Face, focusing on dispute resolution methods, jurisdiction, and ethical decision-making. The assignment explores personal and subject matter jurisdiction, and the application of minimum contacts. It examines the advantages and disadvantages of Alternative Dispute Resolution (ADR), specifically mediation, in resolving the dispute. The analysis delves into the potential criminal offenses committed by Funny Face and Novelty, including violations of FDA regulations, and the ethical failures in their decision-making process. The assignment concludes with a discussion on the liability of the involved parties and the ethical principles that should have guided their actions. The document references relevant legal and ethical frameworks to support its arguments.

Running header: BUSINESS LAW
Business Law
Student’s Name
Institutional Affiliation

BUSINESS LAW
Question A
An appropriate court for a particular lawsuit depends on three major factors including personal
jurisdiction, subject matter jurisdiction and minimum contacts (Clarkson et al., 2010). These factors are
to be considered in evaluating the most appropriate court for solving the dispute between the Margolin
Empire Inc. against Novelty Now and Funny Face.
Personal jurisdiction refers to a court’s authority to make verdicts and rulings that may affect a
person’s legal rights. In the scenario at hand, a court chosen as the most appropriate should be in a
position to impose a fair and just ruling on the subject matter. On the other hand, subject matter
jurisdiction can be defined as a court’s legal authority to hear and make a ruling on a certain matter.
Subject matter jurisdiction may be in three major forms namely; state, federal and concurrent systems.
Lastly, minimum contacts refer to a situation where it is appropriate to impose personal jurisdiction over
a defendant from another state by a court in one state as per the U.S Civil Procedure Law, the court will
seek to determine whether the minimum contacts have been met by Chris through his directives. This
dispute should thus be settled in a state or federal jurisdiction (Kubasek, 2018).
Question B
Alternative dispute resolution (ADR) refers to any form of methodology used is settling disputes
between parties outside a courtroom. ADR may be can be in the form of mediation, reconciliation,
arbitration, community programs and social programs. In ADR, it takes less time and as a result may be
convenient for the parties as costs in terms of cash and time are minimized as opposed to a court
proceeding. Its flexibility makes it possible for the parties to go for the most convenient rules and terms
to apply in their dispute-solving process (Mandal, 2010).
Conversely, there are some disadvantages of ADR more so arbitration where an arbitrator may
demand higher pays especially where the dispute involves money. This also applies in mediation.
Secondly, the openness of some forms of ADR such as arbitration and mediation means that some
principles meant to cushion parties from risks are left out unlike in a court of law. In any way, assuming
that the parties involved in the case at hand opt for an ADR then they should be willing to bear the risks
and cons as much as they are willing to enjoy the benefits of this approach.
Question C

BUSINESS LAW
In the case of the scenario of study, the parties involved may be limited to not selecting
arbitration as a method of settling their dispute as the language on Funny Face website seems not to
allow any form of arbitration. The best available option for the parties to pick is meditation. In using
mediation for solving their disputes, the concerned parties are directly involved in negotiating their
terms and agreement.
By using this method of settling their dispute, both parties will save time and money. The 25
years and &3.5 million that could have otherwise be spent in court as reported by the National
Arbitration Forum will be utilized for some other constructive activities. In addition, all the three parties
could as well benefit from an early neutral case evaluation, which allows them to select a third neutral
party and clarify their positions (Kubasek, 2015). Individually, Donald Margolin will save his public
reputation as an outstanding CEO and public speaker when they use mediation. This will help in saving
him from unnecessary public humiliation.
For Funny Face, all the charges against its unlawful acts of adding PYR chemicals in its products
so as to cut production costs will be avoided. In the case of mediation which is more unlikely to come
into the public domain, Funny Face will be saved from negative reputation on its products that may
cause customers to boycott its products or even fuel cases of more court cases against the product and
its producers.
On the cons, Funny Face would break a lot of laws and could attract more serious issues due to
their arbitration policies in their website. This could even lead to worse scenarios in the near future and
the company will be left worse off rather than on a better position. On settling for mediation, Donald will
not be in a position to prevent these two companies from continuing to sell their harmful products to
the public.
Question D
Funny Face and Novelty have committed a criminal offense of knowingly and willingly adding the
emulsifier into the product against FDA directions. In this regard they have to be charged for causing a
physical harm on Donald. This is pure neglect of duty and responsibility as a producer. The law, in trying
to ensure fairness and just, must charge the corporate officers after proving them guilty of the offense.
Question E

BUSINESS LAW
Funny Face and Novelty have committed a crime in colluding to willingly and knowingly add PYR
chemicals in the aftershave in order to cut costs and in turn maximize profits. This act can be justified to
be a criminal act as a result of ignorance and greed. Further, Funny Face has committed a criminal
offence that can be classified as fraud. This is purely theft as it can be measured by the magnitude of
dishonesty.
Question F
When discussed above, both parties willingly and knowingly colluded to add some to PYR
chemicals to manufacture the aftershave against FDA directives. Funny Face, Ian, Chris, Novelty and
Anthony should be charged and face the consequences as per the law. They should all be liable in
addressing all of the requests made by Donald Margolin because they are all part and parcel of the team
that agreed to make the service at the end of the day.
Question G
Ethical process of decision making is a process of weighing and making a choice between
alternatives in a way that is consistent with the ethical principles. There are three elements used in the
ethical process of decision making. These include commitment, consciousness and competency (Mandal,
2010).
On commitment, it is required that one should have the willingness to do what is right regardless of the
cost. Funny Face and Novelty however, opted to collude and adds PYR, which is harmful, so as to lower
the production costs.
On consciousness, one should be aware of their actions and should act in a consistent way so as
to enhance their ethical and moral convictions. In the case study of interest, both Funny Face and
novelty were conscious of the effects of PYR and the laws against its use but willingly and knowingly
added it to the aftershave.
Thirdly on competency, its true to say that both Novelty and Funny Face were not competent enough in
their operations. This element of making ethical decisions requires that one should carry out his/her
activities with accuracy, efficiency while maintaining quality (“Ethical theory and business practice”,
2019)

BUSINESS LAW
References
Clarkson, K. W., Miller, R. L., & Cross, F. B. (2010). Business law: Text and cases: Legal, ethical, global,
and corporate environment. Cengage Learning.
Ethical theory and business practice. (2019). Ethical Theory and Business, 1-
41. https://doi.org/10.1017/9781108386128.002
Eaglstein, W. H. (2014). FDA advisory committees. The FDA for Doctors, 57-
58. https://doi.org/10.1007/978-3-319-08362-9_13
Halbert, T., & Ingulli, E. (2014). Law and ethics in the business environment. Cengage Learning.
KUBASEK, Browne, M. N., Herron, D., Barkacs, L., & Dhooge, L. (2018). Dynamic business law: The
essentials for ethical guide.
Mandal, S. K. (2010). Ethics in business & corp governance. Tata McGraw-Hill Education.
US Legal, Inc. (n.d.). Legal Definitions Legal Terms Dictionary | USLegal,
Inc. https://definitions.uslegal.com/
What does FDA do? (2018, March 28). U.S. food and drug
administration. https://www.fda.gov/AboutFDA/Transparency/Basics/ucm194877.htm