Answer

Business Law: Case Study One

This report focuses on three tasks that include milestone one, milestone tow, and milestone three. Each milestone has a case study entitled case study one, case study tow, and case study three in that order. Milestone one has seven sections that include A, B, C, D, E, F, and G, while milestone two has five sections that are A, B, C, D, and E. milestone three has four sections that include A, B, C, D and E. Milestones one focuses on product liability and negligence by manufactures, while milestone two focuses contract law, particularly landlord and tenants act (i.e. residential and lease agreement). Milestone three focuses on forms of business entities.

Milestone One: Case Study One

A

The aspect of subject matter jurisdiction (i.e. the appropriate court with the mandate to hear and determine the type of case filed) can be employed to determine the appropriate jurisdiction for Margolin’s lawsuit against Funny Face. Federal courts possess limited jurisdiction or power, and are only authorized to handle cases having robust federal connections. For instance, federal courts have power when a federal policy/law is being employed by a prosecutor or plaintiff or cases that arise in admiralty (i.e. the issue did not occur on the land, but on the sea, beyond the national/territorial jurisdiction of any state or even in navigable waters within the U.S (Lasker et al., 2015). The issue between Funny Face and Margolin lacks a clear federal connection. Besides, it did not occur on the sea or even beyond the national boundaries of the involved states. As such, the federal courts cannot handle the case. State courts are in charge of handling cases related to probate and domestic matters, partnerships, corporations, contracts, torts, property, agency, and commercial dealings. It should also be noted that the U.S courts can handle cases beyond the U.S borders (i.e. long arm principal). Therefore, state courts would be the appropriate jurisdiction for Margolin’s lawsuit against Funny Face, particularly any state court within California or New York.

B

The two types of ADR that may be appropriate for this case are mediation and arbitration. Mediation involves a neutral person (i.e. mediator) who assists the parties to try to accomplish a mutually acceptable dispute resolution. The mediator is not involved in making decisions over the dispute/matter, but assists parties to communicate to enable them to resolve the dispute by themselves (Lemley & Leslie 2015). As such, the control of the results/outcomes is left to the parties involved in a dispute. This form of ADR is effective when the parties involved want to preserve a relationship (i.e. Funny Face and Margolin want to preserve their business relationships). It is also effective or beneficial when the emotions/feelings are getting in the path/way of resolution. The disadvantage of mediation is that it cannot be effective when one party is unwilling to compromise or cooperate. Besides, it cannot be effective in a situation where one party has substantial benefit in terms of power over the other party. 

In arbitration, the neutral person (i.e. the arbitrator) hears arguments and facts from both sides and then makes a decision concerning the outcome of the dispute (Lemley & Leslie 2015). This form of ADR is less formal and often has relaxed rules of facts/evidence. Arbitration can be non-binding or binding. In a non-binding arbitration, the disputing parties (i.e. Funny Face and Margolin) have the right to request trial in case any of them is discontented with the ruling, while in a binding arbitration the disputing parties have to accept the arbitrators’ decision. Lemley & Leslie (2015) inform that the advantage of arbitration is that it is effective when the disputing parties want a different individual to determine the outcome of their issue for them, but would desire to avoid time, formality and expense/cost of trial. It is also suitable for complex issues as in the case of Margolin and New Face (i.e. skin damaging/infection) that requires the help of an expert. The disadvantage of this form of ADR is that it may be ineffective in a situation where every party involved in the dispute want to retail control/authority over the resolution. Besides, binding arbitration prevent any of the disputing party from appealing even when such a party is dissatisfied with the arbitrator’s judgment.

C

Novelty Now and Funny Face would prefer mediation, as a form of ADR because it can enable them to preserve their business relationship with their client (i.e. Margolin). On the other hand, since this issue is a complex one (i.e. involving skin infection from a product) and requires an expert, Margolin would prefer arbitration, particularly non-binding arbitration.  

D

In relation to the strict liability principles, the seller of a product (i.e. manufacture of the entire product or a component of the product, or the seller), are held strictly accountable in a situation where the defendant happens to be one of the parties within the delivery chain of the product/item that has caused injury (Graham, 2014). Since Margolin is a party in the delivery chain of Funny Face, Novelty Now and Funny Face are strictly liable for the injury caused on Margolin by their product. Besides, the two corporations failed to warn the consumers (i.e. Margolin in this case) about the dangers associated with the use of their product, making them liable for the harm caused on Margolin.  

E

Funny Face and Novelty Now may face charges associated with product liability and negligence. In product liability, suppliers, distributors, retailers, and manufactures are held accountable for any injuries caused by their products (Versteeg, 2015). Therefore, Funny Face and Novelty Now are liable for the damage their product has caused on Margolin under the CPA (Consumer Protection Act). The incorporation of PYR, which is a harmful product, in the Funny Face demonstrates an act of negligence. The plaintiff (i.e. Margolin) does not have to show that Novelty Now and Funny Face were negligent. Recent transformations within the U.S statutory law have incorporated the aspect of fault concepts. As such, the defendant can be held accountable for injuries caused by the product in case the product is noted to be defective despite adopting all measures to ensure that the product is safe.

F

Novelty Now and Funny Face are potentially liable to the offense due to three facts. First, they sold a defective product. Second, they defective product sold by them caused an injury to a consumer (i.e. Margolin). Third, the plaintiff (i.e. Margolin) suffered damages resulting from the harm/injury (i.e. bluish skin).

G

WPH (Who Purpose and How) approach offers the managers of business certain practical steps or ethical guidelines that provide/offer stimulus to ethical reasoning within a business context (Versteeg, 2015).  The aspect of Who covers consumers, stakeholders, employees, owners, or investors. In relation to the aspect of purpose, the corporations are faced with the ethical challenge of efficiency/quality against profit. As such, the corporations wanted to offer a safe/quality product, while at the same time make profits. As such, they chose to incorporate PYR, which happened to be harmful. In relation to the aspect of How, the corporations needed to have embraced the concept of public disclosure in the sense that they needed to have informed consumers about the incorporation of PYR in Funny Face. Their lack of labeling their product to indicate the inclusion of PYR was unethical.  

Milestone Two

A

A valid contract has five principal elements that include intention to establish legal relations, offer, acceptance, consideration, and capacity/legal capacity. In relation to the aspect of intention, the contracting parties/individuals must express the desire to establish a legally binding agreement. Since the agreement between the Chain store was not put in writing, the element of intention is missing making this contract an invalid one. The offer refers to the readiness or willingness to do something. Sam’s readiness to supply 1,000 units demonstrates the presence of an offer in the agreement. An agreement cannot be attained until an ofer is welcomed/embraced  by the individuals/party to whom it is addressed. There was an acceptance of an offer in this agreement since the chain store agreed to acquire 1000 units from Sam. The aspect of consideration takes into consideration the benefit or advantage  granted to the party/individual making the promise. The aspect of consideration was present in the agreement since the store offered to exclusively sell Sam’s products, making Sam to promise to deliver 1,000 units. The aspect of legal capacity was present, since the agreement involved persons over 18 years of age, who were sane. However, the absence of the element of intention in this agreement makes it invalid.

B

A quasi-contract’s primary concept is that a contractual/vowed agreement needed to have been established in circumstances where such an agreement was not accomplished/realized. A quasi-contract has three principal principles (Gan, 2015). The first principle is that the plaintiff furnished/supplied valuable items/goods or needed certain services to be rendered with a reasonable expectation/anticipation of being rewarded/compensated in case the defended failed to meet these requirements/expectations. Second, the defendant must have consciously/knowingly accepted the aforementioned commodities and acquired a direct benefit via this acceptance. Third, the defendant must acquire benefits by the services or goods that are considered unfair in circumstances where the plaintiff did not receive compensation (Gan, 2015). In relation to this, the chain store would not prevail on a claim of a quasi-contract because the defendant (i.e. Sam) cannot acquire any benefit from the service consider unfair by the chain store (i.e. the failure to supply 1,000 units of the equipment would not benefit Sam in any way.    

A promissory estoppel has five primary elements. First, a form of legal association/relationship should be existing between, or expected to exist between the parties (Gan, 2015). The parties (i.e. Sam and the Chain store expected to enter a contractual relationship in the future). Second, there should be a promise or a representation by one party (Gan, 2015). There was a promise in the sense that Sam promised to supply 1,000 units of the machine. Third, there should be a reliance/dependence by the other party/individual on the representation or promise (Gan, 2015). The chain store depended on Sam’s promise. Suffer detriment. Fourth, there should be a detriment in that the party depending on the promise must have suffered some detriment (Gan, 2015). In relation this, the chain store must have incurred certain financial expense in readiness to the selling of the machine.  The aspect of unconscionability should be present. Prior to the success of an action of estoppel, it must be proved, in the situation/circumstance, that it would be inequitable or unfair to permit them to do so. The chain store is justified to claim that any failure on the part of Sam to deliver his promise will adversely affect the business, as it must have incurred the cost of preparation for the sale of the machine. As such, the chain store would prevail on the claim of a promissory estoppel.

C

Tenants and landlords have various obligations and rights under the standard residential lease agreement. The tenant possesses the right to privacy, exclusively own the property until the expiry of the property, lodge complain to any governmental agency in case the landlord violates/breaches the housing regulations or laws affecting safety and health, and complain to the landlord in case the landlord fails to accomplish any legal responsibility (Reilly, 2016). The tenant also has the right to unite with other tenants to bargain with the landlord concerning the terms of lease, know the address and name of the premises of residential owner, as well as the owner’s agent,

The tenant has the obligation to maintain the sanitary and safety of the premises, dispose all garbage/waste in a sanitary and safe way, keep the plumbing fixtures within the dwelling unit clean, as permitted by their condition. According to Reilly (2016), the tenant should operate all plumbing and electrical fixtures in a proper manner and adhere to the standards impose by the local and state housing, safety, and health. The tenant should not negligently or intentionally destroy, damage, deface or remove an appliance, fixture or any component of the premises or permit guests to do so. The tenant should keep appliances clean and use them properly, and inform the landlord of a need for repair. The tenant should not disturb or permit his or her guests to disturb his or her neighbors or allow controlled substances like drugs into the premises.

The landlord has the right to rent his or her property for any amount that she or he wishes and rent his/her property to anyone he/she wishes, as well as establish nay terms/conditions within a rental contract that do not contravene the state or federal law (Smith, 2016). The landlord has the right to evict any tenant for breaching any significant term/condition of the lease or for non-payment. In case the tenant breaches the law in a manner that materially affects the safety and health, the landlord has the right to notify the tenant, in form of writing and grant the tenant 30 days to address/resolve the issue prior to filing the eviction complaint (Reilly, 2016). The landlord has the right to have his/her property returned to him/her in good condition/state, as it were at the time of the beginning of occupancy by the tenant.

The landlord has the obligation to adhere to the guidelines of all housing, health, building, and safety codes that significantly influence safety and health. The landlord should make repairs required for the premises to be in a livable situation, keep all the premises’ areas in a sanitary and safe condition, keep all of the premises’ common areas in a sanitary and safe condition, and ensure that all plumbing, electrical, air and heating conditioning systems, heating, appliances and fixtures are in a suitable condition. According to Reilly (2016), the landlord should issue and maintain receptacles of trash, as well as provide for the removal of trash in case the landlord owns more than four units within the same premises. The landlord should provide running water and considerable quantities of heat and hot water all times. The landlord should not abuse his or her right to enter the premises for legitimate purposes. The landlord should execute an eviction proceeding against an individual/tenant who illegally uses or permits the consumption of prohibited substances within the premises. Smith (2015) points out that the landlord should not evict any tenant without a court order by terminating utility service, changing the lock or removing the belongings of the tenant.

D  

Sam’s landlord has the grounds to evict. Sam has violated his obligation of not disturbing his neighbors because the machine made noise in the premises for 30 days. Besides, Sam has also violated the law in a way that materially affects health and safety noise pollution is a significant health concern.

E

Sam has two defenses to make. First, the landlord did not grant him a 30-day notice in the form of writing to resolve the noise made by his machine. Second, the landlord does not have the court order that permits the eviction of Sam from the premises.

Milestone Three

A

In relation to the case of Jeb and Josh, the principal types of business entities that are evident, are partnership-general and limited, and sole proprietorship. A sole proprietorship is run by one individual for his or her own benefit (i.e. as evident in the case seen of Jeb’s wind power business). A sole proprietorship has many advantages. It is simple to start, and least expensive to begin/start due to its simplicity. A sole proprietorship has limited legal hindrances, since the government agencies only require to fill fewer documents/reports. Besides, this form of business is not associated with charter restrictions on operations. A sole proprietorship can also be discontinued in an easy manner, particularly at the will of the owner.   A sole proprietorship enables the owner to act as the boss and make all judgments/decision, as well as keeps all profits/gains. On the contrary, this form of business makes the owner to be liable/responsible for all losses and debts (i.e. as witnessed in Jeb’s case and his creditors). A sole proprietor can also experience problems raising the capital because an individual’s resources are less in relation to the partners’ pooled resources. A sole proprietorship has a limited/short lifespan because the fate of the business/company is untimely as well as unanticipated. A sole proprietorship also has unlimited liability as witnessed in the Jeb’s case whereby his creditors are in seeking to acquire his personal resources/assets.

According to Hopson & Hopson (2014), partnership can exist in two forms, which are general and limited partnership. A general partnership is a contract/agreement expressed between two or many persons who unite to begin/start a business operation for gains/profit (Hopson & Hopson, 2014). Each partner donates money, property, skill or labor as witnessed in the case of Josh and Jeb, who donated skill and money respectively to Arcadia Sports. The advantage of general partnership is that each partner shares losses of the business, as opposed to one partner. However, every partner possesses unlimited individual/personal liability for the debts of the business.  In limited partnerships, personal liabilities of members for business debts or losses are restricted to the amount invested by the partner in the business, which a principal benefit (Hopson & Hopson, 2014). Another benefit of partnership is that is offers a greater possibility/likelihood of capital availability, as witnessed in the scenario of Jeb who donated financial resource to begin the Arcadia Sports. Partnerships are also associated with greater assets/resources for decision-making, support, and creative activity. Despite having benefits/advantages, partnerships possess certain disadvantages. For example, in general partnerships, the element of unlimited liability may negatively affect other partners (Hopson & Hopson, 2014). This scenario is evident in case of Jeb and his creditor, whereby the claim of Sports Arcadia’s assets Jeb’s creditors may have negative effects on Josh investments in the business. In addition, divided mandate associated with partnerships can significantly hinder the fast/quick decision-making process or even result into disagreements. Besides, all partners share profits contrary to a sole proprietorship where one person takes all gains.

B

Arcadia Sports should be registered as a limited partnership. Such an undertaking will ensure that any liabilities associated with the business are limited to the investment of the owners (i.e. Josh and Jeb) in the business, and not the owners’ personal assets/resources.

C

The registration of the business under general partnership would make Josh and Jeb personally liable to injuries or damages that Jane has faced. In general partnerships, partners have unlimited personal liabilities (Prosser & Hingle, 2016).

D

In general partnership, Jeb’s personal creditors would have a higher ability to seize Arcadia Sport’s assets or profits, since this form of partnership is associated with members having unlimited personal liabilities. On the other hand, in limited partnership, Jeb’s personal creditors would  not manage to seize Arcadia Sports assets or profits since members in this form of partnership have limited personal liabilities.

In conclusion, this paper has accomplished four objectives. First, paper has applied suitable elements of the legal system of the U.S and the constitution of the U.S to business scenario for impacting judgments/decisions in authentic circumstances. Second, the paper has applied the concepts of morality, ethics, and civil as well as criminal law to business scenarios for appropriate or informed corporate decision-making. Third, has analyzed the primary elements of a contract as well as a quasi-contract for their application to real and commercial real estate scenarios. Fourth, the paper has differentiated the various types or forms of business organizations for informing responsibilities and rights.