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Civil liability or criminal penalties

The Benefit of Aiming High In your initial post, give an example of a business situation involving conduct that might be considered illegal -- potentially exposing the employee, the business, or both ...

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BMIS570 Ethics and Legal Issues

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Answered

Question:

Information Technology: Contracts and Agreements Case Study

Description

You will write a 4–5-page paper in current APA format that focuses on 2 case studies from each week’s reading. Each paper must include at least 4 references in addition to the course textbooks and the Bible. Each week there is a different set of cases for you to review. You must review them separately following the instructions below:

Review the following 2 cases separately.

-Seaton v. TripAdvisor
 
-Pietrylo v. Hillstone Restaurant Group. 

1. State the facts of the case 

-What happened in this case?
 
-Who are the parties?
 
-What motivated the parties to take this action?
 
-List the facts by level of importance. 

2. Discuss the Issue:

Discuss the issues or problems presented by the case. The legal issue is the question of law on which resolution of the case turns. An issue should be presented in the form of a question. While most cases revolve around a legal issue, you should also consider issues of public policy, values in conflict, and practical reality. For example, a case study involving abortion might involve the following issues:
 
-Legal: Is abortion legal? If so, under what circumstances?
 
-Public Policy: Should abortion be legal? Why or why not?
 
-Values in Conflict: Which value is more important, a woman's right to privacy or an unborn child's right to life? Why?
 
-Practical: What are the options open to someone faced with an unwanted pregnancy? Where can someone in this situation go for help and advice?  

3. Discuss the Arguments:

Now that you have defined the facts and issues, develop and discuss the arguments that can be made for each of the various points of view. For example, what are the arguments, both Pro and Con, for each point of view, which side provides the most compelling argument, and why, and what are the consequences? 

4. Conclusion:

Each of these cases has a court ruling. Do you agree with the court’s decision (why or why not?). From a Christian prospective, how does this decision impact Christianity and society? If the impact is negative, what recommendations would you make to overcome that impact?

Parties

Terry Bienstock (Plaintiff) versus Silverback Media, PLC (Defendant) hereafter referenced as Bienstock v. Silverback.  The case was decided by the Delaware Court of Chancery (Anderson & Coroon, para.1, 2015)

Facts

Two parties (Plaintiff and Defendant) decided to form a Joint Venture Company with the purpose to enable and enhance interactive video programming and advertising content (Reder, Darrow, Melvin, Chang, pg.313, para.3, 2015).

The purpose was to seize the opportunity of mobile marketing in North America.  Plaintiff was a former general counsel of Comcast Cable who has many contacts in the mobile industry and with help of the proprietary mobile technologies from Silverback, they created Mobileactive Media, LLC (Reder, Darrow, Melvin, Chang, pg.313, para.8, 2015).

The two parties described the purpose of business, as described previously, in the limited liability company agreement but there was a clause in the agreement which states that “Silverback’s and its subsidiaries’ North American non-video based mobile and online marketing businesses and the Members” (Reder, Darrow, Melvin, Chang, pg.314, para.1, 2015) will not be included in the Mobileactive Media, LLC’s purpose of business.

Silverback’s COO was interested in owning a 100% of Mobileactive Media instead of having 50% of it, they tried to buy out Plaintiff’s interest but Plaintiff declined the offer, then later on the same day Doane and Amsellem, members of Silverback, had a conversation about not spending too much time on the joint venture (Reder, Darrow, Melvin, Chang, pg.314, para.2, 2015).

Some actions were taken by Defendant to start disconnecting from the joint venture after not being able to obtain the 100% desired of Mobileactive Media, one of those actions were that Amsellem decided not to travel to North America to serve as the COO for Mobileactive Media despite the provision in the agreement that states he (Amsellem) will be the COO for the joint venture in North America (Reder, Darrow, Melvin, Chang, pg.314, para.3, 2015).  The big problem was that Silverback started to obtain other companies with similar business field focus as Mobileactive Media, and Plaintiff decided to take action against Defendant due to breaching the joint venture agreement because they engaged “in the Business of Mobileactive in North America” (Reder, Darrow, Melvin, Chang, pg.314, para.5, 2015).  During the process, Silverback was getting “reorganized and merged into another entity, Adenyo” (Reder, Darrow, Melvin, Chang, pg.314, para.5, 2015); Plaintiff filed a lawsuit on January 2013 against Silverback and Adenyo.

The court decided in favor of Plaintiff stating that Defendant “infringed on the Business of the JV by providing interactive advertising content in North America through mobile platforms independently of Mobileactive...” (Reder, Darrow, Melvin, Chang, pg.317, para.1, 2015).

Issues

Can a company make business with other entities, while being in a joint venture (JV) contract, with the same business field as the JV?

Arguments

When a joint venture (JV) is envisioned by two entities, the main focus should be to stay loyal throughout the proposed project, part of the JV to start of to make a JV agreement with the necessary provisions to have everything, as possible, described and defined for both parties on their respective roles and responsibilities towards the JV (Reder, Darrow, Melvin, Chang, pg.312, para.2, 2015).  In this case I want to highlight two main clauses that were infringed, the first one called “Corporate Opportunity” were the partners are required provide any business opportunity for the JV’s scope of business (Reder, Darrow, Melvin, Chang, pg.313, 2015), in this point Defendant failed to comply by obtaining other entities with the same scope of business as the JV and not sharing these opportunities.  The second point is called “Non-compete”, and I believe that Defendant failed big in this point also because it was focused on competing against his partner in the same scope of business (Reder, Darrow, Melvin, Chang, pg.313, 2015).  

Plaintiff brought the most compelled argument, even though Defendant tried to justify that Plaintiff breached the contract first by apparently stating that Plaintiff “claims should be barred because he failed to make his initial capital contribution in full...” (Reder, Darrow, Melvin, Chang, pg.316, para.1, 2015).  This argument from Defendants sounds more as an excuse to justify the damages they did to Plaintiff, trying to deviate the real problem in discussion, because Plaintiff never mentioned and never did something to not fulfill his responsibilities within the agreement.

Case Two

Parties

Montclair State University (Plaintiff) versus Oracle, Inc. (Defendant) hereafter referenced as MSU v. Oracle.  The case was decided by the U.S. District Court for the District of New Jersey (Anderson & Coroon, para.1, 2015)

Facts

Montclair State University took the decision to change “its enterprise resource planning (ERP) software system with a new system” (Reder, Darrow, Melvin, Chang, pg.334, para.2, 2015) because they wanted “to replace a 25-year-old set of legacy applications” (Foster, Sampson, Webb, Wallin, ch.10, prob. 1C, para.1, 2016), and “MSU identified over 3,200 business requirements for the new system.” (Reder, Darrow, Melvin, Chang, pg.334, para.2, 2015).

MSU (Plaintiff) submitted requests for proposals (RFP) to three ERP software companies, and Oracle (Defendant) was one of them, with the purpose to identify which company could satisfy the majority of their (MSU) business requirements (Reder, Darrow, Melvin, Chang, pg.334, para.2, 2015).  Defendant responded to Plaintiff’s RFP by saying that their base product would cover the majority of Plaintiff’s business requirements by 95% of them [156 of 3,200 would not be satisfied] (Reder, Darrow, Melvin, Chang, pg.334, para.2, 2015).

Defendant mentioned that “it could accelerate implementation and would conclude successfully” despite Plaintiff’s concern about “enough personnel resources for the software migration.” (Reder, Darrow, Melvin, Chang, pg.334, para.3, 2015).

Plaintiff entered into contracts with Defendant for PeopleSoft suite, name given to the ERP software, and these contracts involved different amount of fees.  The first contract was for $4.3 million for software support and the second contract was for $15.75 million fixed-free for implementation services (Foster, Sampson, Webb, Wallin, ch.10, prob. 1C, para.1, 2016).  The problem started to surge when throughout the development of the project Plaintiff did not like the product because it did not meet “the ‘critical functionality’ that Oracle represented it would possess...needed substantially more customizations.” (Reder, Darrow, Melvin, Chang, pg.334, para.3, 2015).

Defendant asked for more fees ($7 million) because the work was massive and it was beyond the proposed scope of the agreement, then Plaintiff alleged that Defendant “never intended to abide by the fixed price term.” (Reder, Darrow, Melvin, Chang, pg.336, para.1, 2015), and on April 2011 Plaintiff filed a lawsuit against Defendant.  Plaintiff also mentioned that Defendant failed in many ways such as delivering key implementation services, caused critical deadlines, refused to make available computer resources, to deliver properly tested software, and to manage properly the project (Foster, Sampson, Webb, Wallin, ch.10, prob. 1C, para.2, 2016).  Defendant alleged that Plaintiff motivated by their own agendas, especially Plaintiff’s leaders, avoiding to be “blamed for the delays, escalated manageable differences into major disputes.” (Foster, Sampson, Webb, Wallin, ch.10, prob. 1C, para.3, 2016).

The lawsuit between Plaintiff and Defendant, after two years, was settled out of court between the two parties in March 2013, and Plaintiff ended up paying more than $10 million over the original proposed amount for the implementation.

Issues

Is it legal to change an established contract because some mishaps happened throughout the course of action?

Arguments

To establish contracts that can satisfy all the proposed goals is a real challenge, and in this case as we saw, certain factors were not taken into consideration.  The simple fact that Oracle felt it could accomplish the task with no problems, then later down the road notifies that the work goes beyond the proposed scope in the agreement, and also tries to justify their mishaps and to blame MSU for their own mistakes, for me it is disappointing.

 As a matter expert in the software industry (Oracle), and having enough experience, I cannot understand how Oracle failed big time on the specifications and then later mentions that MSU “did not adequately understand the technology and the steps necessary to complete the project” (Reder, Darrow, Melvin, Chang, pg.337, para.2, 2015).  It is not MSU’s mistake, if the client did not understand, it means that Oracle as the expert in the software field, failed to explain and define in the agreement the necessary steps and specifications to accomplish the project.

Conclusion

Contracts are some serious business to take in high consideration at the time of starting any venture, project or any kind of business.  As we saw in the first case, it is incredible how a party decides to take action on their own behind walls and not notifying the other party, even though the infringer knew about the agreements done with the other party.  The decision of the court was the correct one because it denotes the importance of complying and adhering to a contract, and the importance of good faith that should always be involved in any agreements.  

In the second case we also saw how two parties defined the process to follow, and then down the road one of the parties decide to make changes by adding another contract on top of the one already established because it did not consider other variables that came to light.  Defendant failed to deliver a correct forecast of courses of action throughout the project, making the client wonder if Defendant is reliable, and if they know exactly what they were doing.  The decision at the end I do not agree with it, because it creates a lot of uncertainty, confusion, and precedence to other companies so they can take into consideration to decide whenever they feel that a change on the contract can be made and get away with it.

God made so many promises for us and also made a pact with his people, He is an incredible being that never changes and He is always willing to fulfill His promises in us.  For me the biggest verse in the Bible that comes to mind, and it brings me comfort and assurance can be found in James.

BMIS570 Ethics and Legal Issues

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Question: Case: Anil, along with his wife, Billy, and family friend, Charlie, started a property development business in 2015. The main activities of the business are to purchase land and develop buildings, and sell these to clients, especially ‘mum and dad’ investors. The business ...

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