Business Law the Author of This Report

Business Law

The author of this report has been asked to answer regarding several different legal and/or ethic cases or questions. Those cases/situations are Wrench LLC vs. Taco Bell, California & Hawaiian Sugar Company vs. Sun Ship Inc., the general legal cases and practice of cybersquatting and general ethics. While these cases are controversial and the topic of many scholarly conversations, the outcomes that should have happened are quite clear.

Regarding the Wrench LLC vs. Taco Bell case, it is clear that Taco Bell used the Wrench idea and just the idea that Chait/Day saying that they figured out the concept on their own was an obvious lie. Taco Bell did not act ethically as they took the idea offered to them by Wrench LLC and used as their own using Chait/Day as a proxy. Regarding whether Taco Bell entered an implied-in-fact contract, they really did. The reason this is fairly obvious is that they took the ideas and concepts offered by Wrench, considered it internally (with the knowledge and consent of Wrench LLC) and then used the idea in their advertising almost verbatim but while cutting out Wrench LLC from consideration for their (successful) idea. The fact that Wrench LLC and Taco Bell did not reach a verbal or written contract is of no consequence because everything else indicated that Wrench LLC offered the idea and Taco Bell ended up using it. Further, Taco Bell, in concert with Chait/Day, actively deceived and lied about whose idea it was. The idea of damages for Wrench is justified as it was their idea, Taco Bell realized a lot of profits from the idea and Taco Bell/Chait unquestionably lied about whose idea it was. As such, damages are called for. Further, the case law and concept of implied-in-fact contracts is necessary so that businesses and people do not take advantage of the fact that an explicit verbal or written contract is not in place (Nolo, 2014).

To be sure, the case between Taco Bell and Wrench was not cut and dried. Only the totality of the situation led to Taco Bell losing. Taco Bell had a point in that there was no official contract in writing (or even verbal, in many senses) and thus perhaps they felt no obligation to include Wrench LLC in the rewards of the advertising campaign. However, Wrench won the day because Taco Bell clearly, along with Chait, took the idea that Wrench created (or one VERY similar) and claimed it as their own and gave no credit for royalties to Wrench LLC. Further, Wrench and Taco Bell were indeed trading materials and information and this would imply a working relationship. They certainly were not coworkers and it is clear that Taco Bell was using Wrench's ideas, at least in part, to drum up an ad campaign. For Taco Bell and Chait to wedge out Wrench is not equitable or legally defendable. If Taco Bell and Wrench did not directly work together, Taco Bell and Chait would have a much stronger case but that is simply not the way it went down. Because of the work they clearly did together, there was indeed an implied contract between the two and Taco Bell clearly breached it.

Regarding the California & Hawaiian Sugar vs. Sun Ship case, it is clear that Sun Ship was on the wrong end of that case. However, the case was not clearly black and white. Reasons and concepts in Sun Ship's favor is whether the liquidated clause was reasonable based on the facts and figures involved, whether there was a public policy exception that negated all or part of the contract and whether California & Hawaiian (C&H) acted in good faith. However, the case in favor of C&H is much clearer. First, C&H's reason for applying the liquidated clause to the contract was quite clear given that sugar's harvest period is at its peak for only about half the year. Second, the liquidated clause of the contract was very specific in that it was a certain amount per day for each day past the deadline that the ship was not delivered. It was a certain amount of day and it was presumably based on actual damages that C&H would realize if the ship was not available due to alternate arrangements having to be made, presuming any were even available. Lastly, Sun Ship signed off on the contracting knowing full well what was expected and required them and then only reneged when the contract terms were violated by Sun Ship. Given all of that, unless the contract violated public policy guidelines like usury or something of that nature, the contract was legal and binding and Sun Ship should have complied with it (Nolo, 2014).

Regarding the array of legal cases cited for the third question of this report, there are some clear answers that can be offered. Regarding cybersquatting, one can quibble about whether cybersquatting is ethical or good-faith or not, but it was illegal and thus Gallo rightfully won their case. Indeed, Spider Webs did not have a legitimate business reason to own that domain other than to extort, basically, money from the company that would rightfully want to use the domain. Businesses should have the right to register their company or legal name as a domain name. One can debate about two companies with similar names going for the same domain (e.g. like if there was another wine company where the owner's name was also Gallo) but Spider Webs was clearly not engaging in such conduct. Regarding the agreement between Paramount/Sony and Maureen Mauder, Ms. Mauder is out of luck because she signed off on Paramount using the imagery and she received consideration for this sign-off. Had she not received consideration or had the contract otherwise been invalid, then Mauder might have had a case. However, absent something like that, Mauder did not have a case against Sony or Paramount (Nolo, 2014).

As it relates to the Force Majeure clause that related to the Facto v Snuffy case, Snuffy actually went above and beyond what they were obligated to do given that they were serving drinks more than forty-five minutes after the lights went out. The power outage was clearly an act of God and the results that came about after the lights went out were not the fault of Snuffy. The fact that the Factos even tried to wiggle out of payment exclusion clause after the signed off on the same is a joke. The Factos could have instead had a clause that prorated the fee and the Factos would have paid only for the services that they actually received. However, the clause says that the entire fee was unpayable. If anything would save the Factos, it would indeed be the fact that they did received some services even if they did not receive everything they were expecting. The Factos may get a refund for up to all but the first 45 minutes but nothing beyond that. To expect all of the money back is not fair to Snuffy and this is true whether or not that Force Majeure clause was present or not (Nolo, 2014).