Contract Law Arbitration

Medical Miracle, (MM) signs a lease with BP for a 5,000 square-foot building commercial office for one year with the right to renew for fine one-year terms upon sixty days’ notice. After the first renewal, BP sends a new lease with substantially the same terms except for a mandatory arbitration clause requiring tenants to through arbitration in place of going through the courts. MM signs the renewal without objection.

One month after MM complains to BP that a leak in the warehouse roof, allowing water to drip onto computer hardware equipment, BP doesn’t fix the leak until one month later – during which MM suffers damages because its hardware was partially destroyed by the leak. What is the significance of the fact that the original lease did not have an arbitration clause but the new one does? The original agreement did not provide an arbitration clause, the renewal of the contract does provide the arbitration clause; it could be argued that the renewal and the original contract are the same agreement.

The party signed the contract therefore the arbitration clause stands. It could be stated that since one part of the agreement had the clause and the other part of the agreement did not include the clause the agreement arbitration still stands because they are the same agreement see: Personal Security & Safety Systems v. Motorola, 297 F. 3d 388 (5th Cir. , 2002) Does MM have an avenue of defense that allows it to get out of the arbitration clause?

It is unlikely that MM could get out of the arbitration clause since they signed the renewal agreement without objection, and that this is a commercial lease signed by two businesses – which implies that both parties are making informed decisions as opposed to personal real leases where the court may give more consideration to the individual. This does not mean that MM will not be awarded damages through the arbitration process; it depends on the arbitration conditions defined in the contract.

It may work to MM’s benefit as the arbitration process is less time consuming and expensive than going through the court. Page 173 (Jurisdiction) Question 5 Background: MM has developed software and marketing materials for its clients, they receive an order from Arizona and the materials including CD ROM are shipped from MM warehouse in Colorado, the software causes damages to the end user’s computer. The client is filing a suit in Arizona.

1) Argue Case for MM that AZ courts do not have jurisdiction: In this case first we establish that Medical Miracle’s (MM) principal place of business is not in Arizona, therefore the court in Arizona does not have personal jurisdiction; secondly, MM could argue that the state of Arizona court does not have subject matter jurisdiction based on complete diversity and/or service process was not completely established, and suite should be heard where the defendant is. See Burden v. Copco Refrigeration,— P. 3d — (2004 WL 1058814, Ct. App.

, Ore. , 2004) http://www. melvin. westbuslaw. com 2) Argue Case for Arizona client that AZ court does have jurisdiction: The client could argue that the case should be heard in Arizona, jurisdiction applies due to the company, MM has had multiple contacts with Arizona state residents and has solicited and received patronage of Arizona residents – that satisfies the minimum contacts criteria. See Snowney v. Harrah’s Entertainment, 11 Cal. Rptr. 3d 35 (Ct. App. , Calif. , 2004) Page 194 (Express Warranty) According to resource findlaw.

com, express warranty is established anytime a seller gives any description, makes any declaration of fact or makes any promise upon which the buyer relies on to make the purchase. For Each Statement determine whether express warranty is created: A) This is the most effective medical management software on the market: a. Yes this is a promise (possibly unsubstantiated) B) The software is compatible with all Windows operating systems a. Yes this is a declaration of fact C) The software is easy to install a. Yes this is a description D) This medical Miracle hand-held device is waterproof a.

Yes this is a fact Page 210 (Defamation) Question 1 Background: Medical Miracle has developed an electronic bulletin board on its website for the purposes of client users to communicate with one another in regards, the website allows users to post electronic messages that all users can see; using this function one user posts a message stating “Attention all – Do not send any patients to NeuroGroup (a neurology medical practice). My sister works there and she says that they are being sued for malpractice” Does this constitute defamation? No, the statement does not constitute defamation.

In this exercise we are assuming the statement is true; defamation can not be established because the statement is considered true. According to an article posted by Attorney Emily Doskow, titled: Can I Say That? Posted on http://injury. findlaw. com/defamation-libel-slander/defamation-law-made-simple. html The law of defamation varies from state to state, but there are some generally accepted rules. If you believe you are have been “defamed,” to prove it you usually have to show there’s been a statement that is all of the following: • published • false • injurious

• unprivileged Page 238 (R&D, Windup of E-Commerce) Question 2 Background: MM decides to use equity as a tool for the R&D costs and increased labor costs; the shareholders draft a hard-copy business plan that offers to sell equity in the company – is the distribution of the plan considered an “Offering of Sercurities”? No, the business plan does not typically list share price, offer price, terms of agreement which are required in a proper filing. The proper documentation would have to go through the registration process before any actual buying or selling of securities occurs.

The business plan with the intent would be more along the lines of Offering Materials, if detailed enough it could be construed as a Preliminary Prospectus. Page 258 (Anti-Trust) Question 1 Due to heavy regulatory burden in the state of Florida, MM and competitor MDI form an agreement that decides not sell its products there until the legislature lifts two regulations; does this agreement violate any anti-trust laws? Yes, conspiracy by two competitors to act together to manipulate the market and trading laws.

By forming an alliance not to trade in a state solely due to legislation the firms are manipulating the market by discouraging other companies from competing in the market, see Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955 (Sup. Ct. , 2007) Question 2 Is there any way to avoid violating anti-trust laws and achieve the objectives while trading in Florida? Yes, the companies could lobby for the legislative change; they could act independently in effecting change – how or if they enter the market without an alliance or coercive agenda. Page 281

Question 1 MM finances LP through in-house financing for equipment and license agreement; LP subsequently files chapter 7 proceedings, what options does MM have and where will they fall in the list of creditors? MM as a creditor has the option to file a complaint objecting the discharge of debts or a motion to extend the time to discharge. MM would have to show that LP failed to keep or produce adequate financials, failed to explain loss of assets, failed to obey a lawful order of the bankruptcy court, fraudulently transferred assets.

If LP has passes the means test for chapter 7 there is not much for MM to do other than seize the hardware and possibly other real property used to secure underlying debt. MM also has the option with LP to reaffirm the debt and agree to terms in which the debtor, LP can repay its debt. Page 303 (Employment Contract) Question 1 One of MM’s employees, Ally (who does not have an employment contract) is asked by her supervisor to work overtime. Ally refuses because MM will only pay her the regular hourly rate; she is subsequently fired due to insubordination.

Ally sues MM for wrongful discharge, MM defends on the theory that Ally is an employee at will, she is not under contract and that no reason is needed for her dismissal – who prevails and why? MM does not have any labor unions in their organization; they provide a policy manual that states “This manual does not constitute an employment contract, all non-contractual employees are considered to employees at will” MM providing a manual with the employment at will statement is not solid, do we assume the employees sign a form stating they have received the manual and understand the terms of employment at will?

If MM can provide a consistent manner in which all employees are handled and explained the employment at will terms then discrimination would be hard to prove, also MM could state that Ally implied consent to the terms by continuing to work there. In this case, Ally has a stronger case in wrongful termination if she can prove discrimination and willful violation of overtime rules, if the overtime is define as greater than 40 hours in a week according to FLSA, hours greater than 40 require payment in the amount of time and one half. See Perez v. Sanford-Orlando Kennel Club, —F. 3d— (2008 WL 220070, 11th Cir. , 2008)