This case scenario involves the Dracca Company. This company has a standard form contract with their customers. However, this is only in the United States this contract form is valid. Currently this company is facing a dispute brought upon by a customer regarding one of Dracca’s products, the Pack-n-Play Beach Model, due to faulty clasps on the product. These faulty clasps did not lock in place, as they should have, which caused injuries to four infants. It seems that this is not the only dispute claim this company has dealt with over the past three years, there were an additional 23 claims dealt with by the arbitration process. Moreover, two Spanish-speaking consumers also tried to sue this company in a state court, but the state courts did not take the case, because of the arbitration clause in the original contract.
This case analysis will include the legal effects of the arbitration clause for consumers, information on whether the Spanish-speaking consumers will prevail in invalidating the arbitration clause, identification of all ethical concerns regarding the implementation of the arbitration clause and the overall arbitration process. In addition, this analysis will identify the ethical concerns regarding the approach Dracca took to the litigation process; along with any recommendation on the actions, Dracca can take to remedy these ethical concerns. Moreover, this analysis will include recommendations on whether the Dracca Company is responsible for the actions of the Henning’s, and more recommendations on what actions the Dracca Company can take internally and externally to resolve this dispute regarding the latest claim involving the product Pack-n-Play clasps.
When it comes to the arbitration clause in any contract, there are a few legal implications consumers normally do not know about when signing a contract with businesses these days. According to (Bagley, 2013, p.), the arbitration clause is, “a clause that specifies that in the event of a dispute arising out of a contract, the parties will arbitrate specific issues in a stated manner.” When a consumer signs a contract with a company like Dracca, they are actually waiving his or her right to go to court, and present their case to a judge or jury. They are stating that they will agree to take his or her dispute to an arbitrator normally chosen by the company. Therefore, the outcome may not always benefit the consumer.
Even though arbitration is less costly, and time consuming than a court lawsuit, there are terms in a contract that state whether the arbitration clause is binding or non-binding. In this case, the Dracca Company has a binding arbitration clause that means that all parties involved have the duty to abide by the outcome or final decision made by the arbitrator and the courts will uphold this decision. For example, a binding arbitration is, “when both parties agree on a resolution and are bond by the arbitrator’s decision” (Bagley, 2013, p. 70)....