LAW 531 UOPX Week 1 Solar Co Inc Litigation Cost Benefit Analysis & Memo Scenario Solar Co. Inc., a solar panel manufacturing and installation company, ha

LAW 531 UOPX Week 1 Solar Co Inc Litigation Cost Benefit Analysis & Memo Scenario

Solar Co. Inc., a solar panel manufacturing and installation company, has recently encountered a series of scandals and bad publicity relating to defective solar panels, poor workmanship, and employee allegations of harassment by executives within the company. One claim resulted in a two-year trial which Solar Co. lost; all other claims were settled out of court.

Solar Co. enters into a contract with XYZ Media to prepare a 6-month national advertising and public relations campaign to help restore its tarnished reputation at a cost of $600,000. XYZ Media launches the campaign, and it is successful for the first two months until XYZ’s computer servers are hacked and all client information is lost because XYZ failed to have adequate backup systems in place. In addition, social media account information and passwords were compromised, resulting in derogatory and inappropriate posts being made on all of XYZ’s social media accounts for several hours. Because XYZ was managing Solar Co.’s social media presence at the time, Solar Co.’s social media accounts were also taken over by the hackers for a brief time and filled with damaging posts.

XYZ issues a public apology; however, Solar Co. wishes to terminate the contract with XYZ and receive a refund of the $200,000 it paid for the first two months of the campaign due to the damages caused by the computer hack. XYZ refuses to cancel the contract or issue a refund, insisting that it can successfully continue the campaign and re-create all of the material that was lost. Solar Co. refuses to pay any further amounts due under the contract and has already begun seeking a new media relations firm to re-launch the campaign.

Part I

Write a 525- to 700-word recommendation to Solar Co.’s CEO advising whether Solar Co. should:

Your analysis should specifically discuss each of the nine factors provided in the “Contemporary Environment Cost-Benefit Analysis of a Lawsuit” feature found in Ch. 4, “Judicial, Alternative, and E-Dispute Resolution.” Provide a clear explanation and reasoning for your recommendation based on the facts of the scenario.

*LOCATED AT BOTTOM OF PAGE*

Would your recommendation be different if you were advising XYZ Media’s CEO? If so, how?

Part II

Solar Co. intends to use arbitration agreements with all clients, subcontractors and employees in the future.

Write a 350- to 525-word memo to Solar Co.’s CEO explaining the arbitration procedure and the enforceability of arbitration provisions under the Federal Arbitration Act.

Include a recommendation as to whether arbitration agreements should be used in the future to reduce Solar Co.’s legal risk and why. Wk 1 – Apply: Litigation Cost-Benefit Analysis
and Enforceability of Arbitration Agreements
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Resources
Ch. 3 and Ch. 4 of Legal Environment of Business: Online Commerce, Business Ethics, and
Global Issues
Law libraries and databases from the internet
Scenario
Solar Co. Inc., a solar panel manufacturing and installation company, has recently
encountered a series of scandals and bad publicity relating to defective solar panels, poor
workmanship, and employee allegations of harassment by executives within the company.
One claim resulted in a two-year trial which Solar Co. lost; all other claims were settled out
of court.
Solar Co. enters into a contract with XYZ Media to prepare a 6-month national advertising
and public relations campaign to help restore its tarnished reputation at a cost of $600,000.
XYZ Media launches the campaign, and it is successful for the first two months until XYZ’s
computer servers are hacked and all client information is lost because XYZ failed to have
adequate backup systems in place. In addition, social media account information and
passwords were compromised, resulting in derogatory and inappropriate posts being
made on all of XYZ’s social media accounts for several hours. Because XYZ was managing
Solar Co.’s social media presence at the time, Solar Co.’s social media accounts were also
taken over by the hackers for a brief time and filled with damaging posts.
XYZ issues a public apology; however, Solar Co. wishes to terminate the contract with XYZ
and receive a refund of the $200,000 it paid for the first two months of the campaign due to
the damages caused by the computer hack. XYZ refuses to cancel the contract or issue a
refund, insisting that it can successfully continue the campaign and re-create all of the
material that was lost. Solar Co. refuses to pay any further amounts due under the contract
and has already begun seeking a new media relations firm to re-launch the campaign.
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o
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Part I
Write a 525- to 700-word recommendation to Solar Co.’s CEO advising whether Solar Co.
should:
file a lawsuit and proceed to trial
try to reach a settlement with XYZ Media, or
use a method of alternative dispute resolution (ADR)
Your analysis should specifically discuss each of the nine factors provided in the
“Contemporary Environment Cost-Benefit Analysis of a Lawsuit” feature found in Ch. 4,
“Judicial, Alternative, and E-Dispute Resolution.” Provide a clear explanation and reasoning
for your recommendation based on the facts of the scenario.
*LOCATED AT BOTTOM OF PAGE*
Would your recommendation be different if you were advising XYZ Media’s CEO? If so,
how?
Part II
Solar Co. intends to use arbitration agreements with all clients, subcontractors and
employees in the future.
Write a 350- to 525-word memo to Solar Co.’s CEO explaining the arbitration procedure
and the enforceability of arbitration provisions under the Federal Arbitration Act.
Include a recommendation as to whether arbitration agreements should be used in the
future to reduce Solar Co.’s legal risk and why.
CH. 4 Contemporary Environment Cost–Benefit Analysis of a Lawsuit
The following factors should be considered in deciding whether to bring or settle a lawsuit:
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The probability of winning or losing
The amount of money to be won or lost
Lawyers’ fees and other costs of litigation
Loss of time by managers and other personnel
The long-term effects on the relationship and reputation of the parties
The amount of prejudgment interest provided by law
The aggravation and psychological costs associated with a lawsuit
The unpredictability of the legal system and the possibility of error
Other factors peculiar to the parties and lawsuit

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