In the case of Margolin vs. Funny Face and Novelty Now, Margolin used the after shave product by Novelty Now called Funny Face. Upon using the product which used a not FDA approved chemical called PYR (a low-cost chemical emulsifier) the plaintiff’s face turned permanently blue. Margolin and his business is suing Novelty Now and their product for restitution for medical expenses, damage to his face, and business reputation, and alleging negligence. Margolin is a New York resident who purchased the product online. The Funny Face website states the three California residents (Chris, Matt, and Ian) who made the product cannot be taken to court. The contract with Novelty Now states all disputes will be held in Florida.
Jurisdiction determines…show more content… Arbitration has become the common form of dispute for most commercial companies because it is less expensive and more efficient. Funny Face benefits from using a binding arbitration clause in multiple ways. Funny Face will not have to enter litigation, instead the company states how the arbitrator will be selected. The arbitrator can also determine where the proceedings will be held, telephonic arbitrations are also available, since they are not bound by the courts jurisdiction (American Arbitration Association, 2016). Margolin benefits from the arbitration especially when it comes to cost. The Consumer Arbitration Rules- Costs of Arbitration states the cost would be $400 for a consumer and between $6600 and $9650 for the company (American Arbitration Association, 2016). Each arbitration can have up to three arbitrators whose fee is $1500 paid for by the company. All parties benefit from having the ability to select an arbitrator with lawyer, academic or professional experience with similar cases. However, there are negative consequences as well. Awards can take a month to be determined. Another negative consequence could be to future consumers, for not knowing this arbitration took place. By Margolin being held to arbitration, he is unable to hold the company responsible and to change their product because he will receive restitution for the
