Dracca uses a standard-form contract to sell directly to ; consumers in the United States. About one-third of direct sales occur in ; Spanish-speaking communities within the United States. The contract is in ; English and is 16 pages in length. A binding arbitration clause on page 5 requires ; all disputes arising from the contract to be settled by arbitration.
Recently, two consumers from the Spanish-speaking ; community sued Dracca in state court. The state court dismissed the claims ; pursuant to the arbitration clause. The consumers then brought a claim ; challenging the validity of the arbitration clause, claiming they were not ; properly informed that they were waiving a right to trial when entering the ; contract.
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Over the past three years, Dracca has had 23 additional ; claims brought to the arbitration process because of this form contract. Twenty ; of the 23 claims were arbitrated by the same dispute resolution agency, as ; selected by Dracca.
Recently, a new dispute arose regarding product safety of ; the Dracca Pack-n-Play Beach Model. Because retailers made the claims, they ; were not subject to the binding arbitration clause contained in consumer ; contracts. The court claim involved faulty clasps that did not lock the ; pack-n-play in place As ; a result of the faulty clasps, four infants in three countries suffered ; life-threatening injuries. ; One of those ; infants was from the U.S. and had to be placed on life support for two weeks ; before recovering from a respiratory injury sustained after being trapped in ; the pack-n-play for nearly a half hour.
During the discovery process, Dracca sent 600 boxes of ; documents to the attorneys for the retailer ; in an attempt to hide relevant information. Within the boxes were several ; documents properly labeled in response to the attorneys’ request for ; production. After combing through the documents and conducting other discovery, ; parties surmised that an employee of Dracca, Sue Hennings, tampered with the ; faulty clasps. Hennings worked in accounting, but she was overlooked for a ; promotion to oversee the new pack-n-play line. Hennings deliberately tampered ; with the safety of the clasps in retaliation, an action that could carry ; criminal charges.
In light of these facts, please respond to the following ; questions using course material and credible outside research to support your ; findings. Please submit findings in a three- to five-page paper using APA ; format.
- What is the legal effect of the arbitration ; clause on consumers? Must consumers abide by the decision of the arbitrator? ; Use caselaw to support your position.
- Will the two Spanish-speaking consumers ; prevail in invalidating the arbitration clause? Why or why not? Discuss the ; legal considerations the court will entertain in reaching its decision.
- Identify the ethical concerns regarding the ; implementation of the arbitration clause and the arbitration process. Recommend ; actions Dracca could take to remedy these ethical concerns. (The Ethical ; Business Leader’s Decision Tree in chapter 2 of the text may be a useful tool ; for your analysis).
- Identify the ethical concerns regarding ; Dracca’s approach to the litigation process. Recommend actions Dracca could ; take to remedy these ethical concerns. (The Ethical Business Leader’s Decision ; Tree in chapter 2 of the text may be a useful tool for your analysis).
- Is Dracca responsible for the actions of ; Hennings? Why or why not? Use legal principles discussed in the readings to ; support your conclusion.
- What actions (internal and external) do you ; recommend to Dracca to resolve the dispute regarding the Pack-n-Play clasps? Be ; specific and detailed, and be sure to base recommendations on relevant legal ; and ethical principles. ; ; ; ; ; ; ; ; ; ; ;
Name your document: ; SU_MBA5005_W1_A4_Johnson_D
Submit your 3- to 5-page Microsoft Word document