Case Study One: Chris, Matt, and Ian, who live in California, have decided to st

Question

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 Now’s 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 Margolin’s skin discoloration. The website for Funny Face states that anyone buying their product
cannot take Chris, Matt, and Ian to court. Novelty Now’s contract with the three men states that all disputes must be brought in the state of Florida.

Language on the Funny Face website appears to limit any claim filed to arbitration as a means of resolving the dispute.

Explain the pros and cons of arbitration for at least two parties to the case.

Explain mediation and whether it has any benefits in this case.

Explanation / Answer

in this arbitration process, they may approach court for law, Margolin will be compensated by the court orders, he will be win in this suit. but the thing is that he has to prove that in the manufacturing process they are using the PYR which is not approved by FDA.

if they approach a third party, he will be provide a solution to the both parties, and Margolin may get huge compensation and Funny face and Novelty Now may not face any legal problems. if they go with mediation, both the parties will be benefited in this situation.

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