MGT 540. Business Law and Ethics

Let's say you have a 32 year-old niece, Lisa, who has been very successful as an app developer in a Silicon Valley company. She has millions of dollars squirreled away in bonds, bank accounts and equity investments. Unfortunately, she is unhappy with her job. While it can be exciting to work on technical projects that can have big impacts and generate substantial revenue, she has decided that she is financially secure and would like to engage in creative work bringing her in close contact with people.

Since she was in grade school, Lisa's great pleasure in life has been cooking. Everyone who has experienced the cuisine she has prepared has praised her for her culinary skills. So in looking for a new career, the obvious question she raises is: "How about setting up a high-end restaurant in northern California that specializes in preparing trendy, super-healthy food?"

Assignment

1.Lisa can afford to fund the venture entirely on her own, or can take out a loan, or can work with two or three partners who have indicated interest in joining her as partners. (She has other options as well, but we'll limited them to the three described here.) Specifically, in the context of setting up a trendy restaurant, what are the pluses and minuses of each of the three options she is investigating? 2 pa

2.Identify three potential legal liabilities she faces in launching and running the restaurant. How likely is each to arise? What steps can she take to handle each? No abstract, general comments on liability, please - make sure your answer pertains to her restaurant venture. 2pa

3.Several months after launching her restaurant, which is doing well and receiving positive Yelp reviews, a neighbor who lives just a few houses down the street, is taken away in handcuffs by the US postal police. It turns out he was running Internet scams from his house that entailed defrauding senior citizens, a criminal activity covered by the US Postal Service police. Over subsequent months Lisa reads about court actions against him and the penalties he may face tied to his criminal activity. Note: Mail fraud can carry substantial jail time. If the criminal is charged with a RICO felony, things can become much worse. 2pages

a.Identify two instances where Lisa, working through her restaurant, can engage in activities that are viewed as criminal.

b.Identify two instances where the activities can be handled as civil infractions.

c.How are criminal charges different from civil charges?

d.What is a RICO felony, and what makes it so fearsome to defendants in criminal cases?

4.Let's say Lisa discovers that a seafood vendor with whom she has worked has been cited for health violations by the county three times in five months, each of which was articulated as a warning and none of which led to legal action. Lisa informs the vendor that she wants to terminate their relationship, but the vendor pushes back, saying this violates the year-long contract he has to be her primary supplier of seafood. He himself has contractual obligations with other suppliers, and breaking the contract with him would provide a major hardship. Identify the three dominant forms of dispute resolution commonly employed in business that are open to Lisa. What are the pluses and minuses of each. Again, please keep the discussion focused on Lisa's specific case and avoid broad, abstract statements. 2page

5.When there are civil disputes between two or more parties, there are three standard modes of dispute resolution that are commonly employed. Identify these modes. How does each work? What are the strengths and weaknesses of each?2pages