Introduction
As the manager of Acme Fireworks, it is my responsibility to use the best business practices going forward. With business beginning to grow, the need to address certain issues is now incumbent and some decisions need to be made quickly before any further steps in the business are taken. Specifically, the company now employees 15 workers but with so many larger orders coming in currently from big firms, there is a need to hire and train more workers: however, if the orders begin to dwindle in the future, there could be a problem with funds to pay for these new hired hands. Thus, the questions that need to be answered first and foremost are whether the current contracts with the big businesses regarding the putting on of a fireworks display will be governed by common law or by the Uniform Commercial Code (UCC). It is also important to know whether I have formed an actual contract with the businesses and what the five essential elements of an enforceable contract are. Plus, the potential personal liability to Acme Fireworks should a spectator be injured from a stray firework needs to be discussed. I also need to know the different employment types and relationships relevant to agency law and what the advantages and disadvantages of each type are with relation to Acme Fireworks. Finally, I need to know why a sole proprietorship is a bad idea for this business. This paper will show, therefore, why our contracts should be governed by the UCC, what the five essential elements are, and why this business should be switched to a limited liability corporation (LLC).
UCC
Common law applies mainly to real estate transactions, services, insurance, employment issues, etc. UCC governs a contractual transaction where good and objects are transferred. In this case, a service is being provided—a fireworks display—but there are also goods involved—i.e., the fireworks themselves. Since this is not a real estate transaction or a service regarding insurance or employment, the UCC should govern these contracts. Rogers (2012) points out that “common law is primarily used in real estate and the law is made by the decisions of judges in individual cases” (p. 132). For this reason, the UCC contract basis is the best for this particular scenario, as it is more suited to the commercial needs of Acme Fireworks. With this in mind, the issue of whether the business actually entered into a contract with the businesses can be addressed.
Five Elements
A contract is made whenever two entities voluntary give their assent to an agreement about an exchange. The contract is based on the mutual and voluntary agreement made between the two parties and this contract is legally binding. As Rogers (2012) notes,...
References
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Bernhard-Oettel, C., Sverke, M., & De Witte, H. (2005). Comparing three alternative types of employment with permanent full-time work: How do employment contract and perceived job conditions relate to health complaints?. Work & Stress, 19(4), 301-318.
Coleman, S. (2000). Access to capital and terms of credit: A comparison of men-and women-owned small businesses. Journal of Small Business Management, 38(3), 37-46.
Rogers, S. (2012). Essentials of Business Law. San Diego, CA: Bridgepoint Education, Inc.
Smail, L. (1961). Basis of liability in fireworks accidents. Washington and Lee Law Review, 18(1), 144-150.
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