Louella Lambast has decided to open a gift store. She intends to offer a wide selection of ever-changing, low-priced giftware, including T-shirts, novelty toys, costume jewellery, comic books, video games, and household goods. She is tremendously excited about her new venture but cash poor. For this reason, Louella decides to do a lot of the work of setting the store herself, including assembling a large glass display case. Louella also takes some immediate steps to make her store known by arranging for mass commercial e-mails to be sent out. Louella's next decision is to stock all her product from an overseas supplier, including an array of T-shirts bearing the labels of a streetwear manufacturer known as FUBU(For You By Us). Louella tells friends that although she has a pretty good idea that product supplied to her may end up being illegal 'knockoffs' of brand-name designers, she does not know that with 100 percent certainty. "I'm not legally responsible for what people like my supplier do, anyway," she determines. "Plus, business is a game; I'll handle any fallout as it arises." Louella also imports some small table lamps. When the lamp arrives, she notices that they do not contain labels identifying them as certified safe by Underwriters Laboratories of Canada or another approved group. Underwriters Laboratories is an international, independent, not-for-profit organization whose mandate is to evaluate product safety. The UL mark means that the organization has tested samples of the product in question and concluded that requisite safety requirements have been met. Because Louella is completely satisfied that the lamps pose no risk, she decides to attach some counterfeit labels on the lamps to reassure her customers. A few months later, Louella's world is falling apart. A customer suffers a head injury when the glass display case that Louella had improperly assembled suddenly collapses. A group of demonstrators has begun picketing Louella's business premises, protesting the violent kind of video games she sells. Underwriters Laboratories has learned that lamps in Louella's store contain counterfeit labels indicating that they have UL approval, and the police are now involved. Louella's lawyer has explained that she will likely face prosecution for distributing material infringing copyright as well as for violating the Criminal Code of Canada. Just when it seems that things could not get worse, Louella receives a phone call from an American who has been inundated with her unsolicited commercial e-mail. The individual is livid, advising Louella that she has sent spam and is in breach of recent American legislation that he calls the CAN-SPAM Act. The CAN-SPAM (Controlling the Assault of Non-solicited Pornography and Marketing Act of 2003 permits e-advertising only under certain circumstances. The law bans false or misleading headers (e.g., the email's "From" and "To" information) as well as deceptive subject lines. It requires the e-mail to provide an opt-out mechanism, to identify commercial e-mails as such, and to include the sender's valid physical address. The American tells Louella that she could go to jail for five years and faces civil penalties of $16,000 per violation. Since Louella's spam did not conform with the legislation, Louella is terrified that she will receive a large fine or possibly end up serving time in an American prison. Needless to say, Louella's business cannot survive this barrage of legal problems. Nor can her reputation. 1. What has gone wrong in Louella's business, and why? Explain with examples from the case [6]