According to rules of jurisdiction, a lawsuit can be filed against an individual with regard to the place where they live or conduct business (Ryngaert, 2015). The three individuals Chris, Ian and Matt all live in California and conducts business in Florida. According to the rules of jurisdiction, Donald Margolin is allowed to file a lawsuit against them in the federal court of California or Florida. However, their place of business is Florida and their contract states that disputes can only be handled in Florida. Therefore, it would have been best if the lawsuit against Funny Face was filled in Florida.
Neutral evaluation is one of the Alternative dispute resolution (ADR) procedures that can be used in the case. The benefits of this method are that each party will have to hear an opinion of the weaknesses and strengths of their arguments and evidence. The opinion by the evaluator is also not binding but a basis for resolution (Tay, 2008). The other form of ADR that can be used in the case is arbitration. It is the best as there is an option of binding and non-binding. It will aid in avoiding time wastage, less formal and fewer rules as the case of court cases. It is the best as both parties would like another individual to solve this case (Tay, 2008).

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From the two mentioned ADR methods, arbitration would be the best for all the three parties. The reason behind this choice is the fact that a neutral individual is required for this case. The parties can decide whether the decision will be binding or non-binding. In the case of non-binding, the unsatisfied party can further take the matter to court for another decision. If it is a binding one, then it means the decision from the neutral party would be final (Tay, 2008). Arbitration would be the best for this case as it avoids scenarios such as the application of rules of jurisdiction conflicts as Margolin had filled a case in New York.

Corporates and corporate officers can only be held liable for criminal acts if the firm is not a limited liability firm. That means that the firm or the officers acknowledge the responsibility for any dealings that the firm might undertake. Therefore, in the case of illegal activities, they are held responsible (Miller, & Jentz, 2012).

From the case study, the potential criminal act includes the use of PYR that is a component which is not FDA approved. FDA approves various components of drugs or foods. In this case, the substitution of PYR into the manufacture of Funny Face was initiated by Chris. Novelty Now accepted the decision with the knowledge that PYR is not approved by FDA. Therefore, this ties both parties and makes them responsible for the act. However, Funny Face statement on the website excludes Chris, Ian, and Matt from any legal repercussions of using their products.

In the case that the use of PYR is a criminal offense, the legal repercussions as stated above shifts to Novelty Now. The purchase of Funny Face on the website as it is for Margolin’s case excludes Chris, Matt and Ian from legal repercussions due to their terms and conditions on their website. However, FDA can sue this arrangement between Novelty Now and Chris, Matt and Ian for not using products that are approved by the organization and therefore causing harm. Therefore, Margolin can seek help from FDA is the effects of Funny Face can be proved to be associated with PYR.

In consideration of ethical, it is the power of distinguishing what is right or wrong. Therefore, in the application of business ethics, the firm should be obliged, to tell the truth of their components of the product. Funny Face should be manufactured with approved raw materials. The firm needs to consider the welfare of its customers and not just their profits. The firm can ethically consider compensating Margolin is the PYR is proved to be the cause of his misfortunes. Further in the marketing of Funny Face, the firm can embrace honesty, transparency and responsibility (Treviño, & Nelson, 2011).

  • Hartley, R. D. (2008). Corporate crime: A reference handbook. Santa Barbara, Calif: ABC-CLIO.
  • Miller, R. L. R., & Jentz, G. A. (2012). Fun]damentals of business law. Mason, Ohio: South-Western.
  • Ryngaert, C. (2015). Jurisdiction in international law. Oxford: Oxford University Press.
  • Tay, C. S. K. (2008). Resolving disputes by arbitration: What you need to know. Singapore: Singapore University Press.
  • Treviño, L. K., & Nelson, K. A. (2011). Managing business ethics: Straight talk about how to do it right. New York: John Wiley.