Week 2 group assignment - Essay Example

The Legal Environment of Business – Theory to Practice The Legal Environment of BusinessQ2. After going through the case study and the arbitration method of settling disputes the first part of the question that why the first lease did not contained an arbitration clause, when the new one did. According to the arbitration method, this clause can be effective and implemented when both the parties are in favor of this procedure and are ready to settle any dispute with the aid of arbitration. However, the one reason that comes up on the surface is that Commercial Properties (CP) did not see the need to have an arbitration clause in their first lease.

This might be because they knew that there current warehouse would not process any problem for the Medical Instrument Inc. hardware, thus restraining from entertaining any arbitration clause. Another reason might be that, in spite of arbitration being of low cost, CP perhaps didn’t see the need or any problem which may call upon such procedure. Nevertheless, the very next lease contained the formerly absent arbitration clause. (Cross, 2011) This step could mean that Commercial Properties either knew about the defaults of their new warehouse or had projected that the coming years might be less difficult with MII if they have an arbitration clause in an agreement.

As the main aim of arbitration is to ensure that the opposing parties can settle any dispute without rushing to a trial and can overcome a conflict with the presence of a third party, which will also be able to make a neutral decision based on the evidences and witnesses. Hence, the decision to include the clause in new lease seemed viable. Travelling to California for the arbitration procedure will be essential for MII because it’s mandatory that any tenant who needs to have an access to the attribution clause will have to go through the CP’s home state of California.

(Cross, 2011) On the surface there is no reason to rule the arbitration clause invalid, as the MII signed the lease papers without any objection. Moreover, MII also informed the CP about the leakage as soon as the problem surfaced. On the other hand, this clause can also be declared invalid if the CP claimed it to be too burdensome (Cross, 2011).Q3. The two cases concerning the arbitration method are Brower vs. Gateway Inc. and Green tea Financial Corporation vs. Randolph. Both the two cases discussed the dispute and how arbitration clause worked out form them.

However, both the cases did not held much relevancy for the CP vs. MII case as the former cases already had an agreement on arbitration clause from the start of the business. Nevertheless, in Brower and Gateway case they had a similar scenario in the clause and that was, MII had to refer to California, the home state of CP and Brower had to consult the International Chambers of Commerce (ICC) in Europe. Thus court ruled in favor of Brower on the claim that the arbitration clause proved burdensome for them.

Likewise, MII could also be claim Brower statement, rending the arbitration agreement by CP invalid. ReferencesCross, F., & Miller, R. (2011). The Legal Environment of Business: Text and Cases: Ethical, Regulatory, Global, and Corporate Issues. Cengage Learning.