Dracca uses a standard-form contract to sell directly to consumers in the United States. About one-third of direct sales occur in Spanish-speaking communities within the United States. The contract is in English and is 16 pages in length. A binding arbitration clause on page 5 requires all disputes arising from the contract to be settled by arbitration.
Recently, two consumers from the Spanish-speaking community sued Dracca in state court. The state court dismissed the claims pursuant to the arbitration clause. The consumers then brought a claim challenging the validity of the arbitration clause, claiming they were not properly informed that they were waiving a right to trial when entering the contract.
Over the past three years, Dracca has had 23 additional claims brought to the arbitration process because of this form contract. Twenty of the 23 claims were arbitrated by the same dispute resolution agency, as selected by Dracca.
Recently, a new dispute arose regarding product safety of the Dracca Pack-n-Play Beach Model. Because retailers made the claims, they were not subject to the binding arbitration clause contained in consumer contracts. The court claim involved faulty clasps that did not lock the pack-n-play in place As a result of the faulty clasps, four infants in three countries suffered life-threatening injuries. One of those infants was from the U.S. and had to be placed on life support for two weeks before recovering from a respiratory injury sustained after being trapped in the pack-n-play for nearly a half hour.
During the discovery process, Dracca sent 600 boxes of documents to the attorneys for the retailer in an attempt to hide relevant information. Within the boxes were several documents properly labeled in response to the attorneys’ request for production. After combing through the documents and conducting other discovery, parties surmised that an employee of Dracca, Sue Hennings, tampered with the faulty clasps. Hennings worked in accounting, but she was overlooked for a promotion to oversee the new pack-n-play line. Hennings deliberately tampered with the safety of the clasps in retaliation, an action that could carry criminal charges.
In light of these facts, please respond to the following questions using course material and credible outside research to support your findings. Please submit findings in a three- to five-page paper using APA format.
Name your document: SU_MBA5005_W1_A4_Johnson_D
Submit your 3- to 5-page Microsoft Word document