Rocky Mountain Condiments: Close Encounters with the Legal System for the First Time
The founder of a Colorado start-up focused on developing a line of condiments confronts a host of legal issues that threaten the viability of her young enterprise. She is suing a co-packer for, among other things, breach of contract, theft of recipes and trade secrets, conversion of finished inventory, and unfair business practices; she has been served with a so-called demand letter alleging that an on-line purchaser has been harmed by her fraudulent and deceptive practice of selling an improperly labeled product; and, just as an opportunity arises to distribute her products via a grocery chain in Canada, her significant other claims an ownership interest in her new company. The founder contemplates whether she might be better off just leaving her problems behind in the U.S. and starting over in Canada. The case is designed to be taught as the opening case in a course on law, management, and entrepreneurship and highlights some of the basic areas of law – jurisdiction, contracts, torts, intellectual property, unfair business practices, consumer protection—with which managers should be familiar. The case also introduces the role of lawyers and raises issues of how to deal with lawyers and which lawyers are the right lawyers for particular types of problems. It is intended to present a management issue that will both prompt student discussion of strategies for resolving legal issues faced by both start-ups and mature businesses and also to set the stage for topics discussed in more detail later in the course. It can be taught with the Note, “Legal Aspects of Product Launch.”
Keywords: law; Law and Regulation; start-ups; Founders' agreements; Cross-Border Jurisdiction; contracts; Torts; consumer protection; Non-disclosure Agreements; Intellectual Property Protection; fraud; Legal Remedies; Law; Lawsuits and Litigation; Laws and Statutes; Business Startups; Food and Beverage Industry;
Citation:
Goldberg, Lena G. "Rocky Mountain Condiments: Close Encounters with the Legal System for the First Time." Harvard Business School Case 319-029, July 2018. (Revised August 2018.) View Details