Business Law (1)

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1 Business Law - analyze the relevant law, apply the facts to the law, and make a conclusion Student’s name Professor’s name Institutional affiliation Course Date

2 Introduction The management of a growing company that is focused on changing the business entities such as the ACME fireworks is likely to be challenging but as well quite rewarding. However, there is a lot to put into consideration. It is very vital to determine if the uniform commercial code (UCC) do apply to the contracts that are carried out via the company ("Common Law and Uniform Commercial Code Contracts | Work Within the Law", 2021). Specific legal applications may become very significant in dealing with a specific company and even more crucial where the company activities involve dangerous activities like fireworks, as it is in our case. The agency laws and employment types related to a specific sector have the capability of changing the entire face of business procedures. In relation to determining the type of entity to form in the event of changing the business entity, this paper focuses on the following: to determine if the businesses contracts are to be ruled by uniform commercial code or common law, analyzing if the owner of the company went through with the contract and applying the important elements that are required in an enforceable contract, explaining the personal liability that might occur to the company in the event a spectator is injured, discussing the relationships and various types of employment that are convenient to the agency law and evaluate the pros and cons of every type that is possibly applicable to ACME fireworks company and lastly giving an explanation as to why the company is not supposed to function as a sole proprietor as well as recommending a perfect business entity that the company should engage in. Uniform commercial code (UCC) or common law Common law would regulate the agreements with the companies. There is only little items to put into consideration when choosing what type of regulation would control a contract regarding the fireworks business and its potential customers ("Common Law and Uniform

3 Commercial Code Contracts | Work Within the Law", 2021). The working of the uniform commercial code or common law depends on the specific type of products or services. “In terms, there is also a clear distinction in comparison of UCC and the common law. Price, quantity, nature of job, identity of offer and output time are all words used in common law. In UCC, on the other hand, quantity is the primary focus of the term ("Common Law and Uniform Commercial Code Contracts | Work Within the Law", 2021).” The cost per firework show, the scope of the job, and the nature of the bid were all included in the contract between ACME Fireworks and the corporations that requested the firework displays. These are all features of Common Law terminology. Firework amounts could be applied to these contracts to ensure the best outcomes for common law. The key objective of the Standardized Commercial Code is quantity. In addition, common law refers to a service like the fireworks display that the businesses choose to buy from ACME Fireworks. Common law is specifically concerned with real estate, utilities, insurance, intangible properties, and work contracts. UCC, on the other hand, focuses on the selling of commodities and securities ("Common Law and Uniform Commercial Code Contracts | Work Within the Law", 2021). It is possible fireworks may be deemed as a good and therefore can be subject to the Uniform Commercial Code. The External businesses aren't attempting to buy fireworks but they are seeking to pay for a fireworks display. Some other significant difference regarding the uniform commercial code is that common law do not qualify for slight modifications, while the latter does. This could be beneficial to a business like ACME Fireworks Company ("Common Law and Uniform Commercial Code Contracts | Work within the Law", 2021). In the event the company was to recruit a large number of fresh workers to setup the display of the fireworks, definitely it would be an advantage to establish fixed schedule specified in the agreement that prohibits changes without both parties'

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4 consent. The idea that Common Law is versatile in the courtroom is one aspect of Common Law that will help ACME Fireworks in retaining their customers and contracts. On the plus hand, common law is less rigid than civil law; judges have significant authority to alter, adjust, and shape the regulation to suit specific incidences in so as to ensure that fairness is served and that the civilization's evolving social ethics are represented by the law ("Common Law and Uniform Commercial Code Contracts | Work Within the Law", 2021). Enforceable Contract Offer and acceptance, intent to establish a legal agreement, legal concern, ability of parties, and free consent are the five basic elements of an enforceable contract. The contract between the fireworks company and the other business was legal ("What is an Unenforceable Contract?", 2021). There was a proposal, and it was accepted. Since services were rendered and restitution was negotiated upon, there had been a legal relationship. The firework company purchased insurance so as to cover their legal considerations, so lawful consideration was granted. Since the fireworks company can supply the fireworks services and the other company can pay for them, both parties are capable of entering into a contract ("What is an Unenforceable Contract?", 2021). Since the second company was not in a place which it didn’t have a choice but agree to the deal, just like a lone mother would happen to be in the event her homes air- conditioning broke down during the period of the Arizona summer, thus a price less accord was granted. Examine if the company owner entered into an agreement with the other company and put in place five basic fundamentals of a legally binding agreement.

5 In the event of several circumstances, a contract becomes no more enforceable. The primary point brought up was a lack of ability. This suggests that either one or more of the contract's parties did not completely grasp what they did agree on ("What is an Unenforceable Contract?", 2021). Young people or others suffering from mental disorders are prime examples of people who cannot make a fair contract decision. Then there's duress. When one person takes advantage of another in a tense situation, this is known as duress. For example, farmer Johnny decides to buy 1200 pounds of seeds from a seed company for two dollars per pound. The seed company demands three dollars per pound just as they are about to be shipped. Farmer Johnny needs to get the seeds planted as soon as possible, or his crops will be low this year. Farmer Johnny is under duress, which isn't a bond that can be forged. A contract may also be declared unenforceable due to misrepresentation. This is when one party withholds knowledge from another ("What is an Unenforceable Contract?", 2021). For instance, the act of selling someone a vehicle and not informing the buyer about a beginning failure of the engine and in its place lying to them that the engine of the vehicle is in an excellent form. Another reason as to why the contracts is unenforceable is the unconscionability doctrine. When there is a case of injustice in a contract, it may be decided by a court that it is not enforceable. “Unconscionability” refers to a contract word or something inherent in or about the arrangement that was so shockingly unjust that it should not be permitted to be remain effective ("What is an Unenforceable Contract?", 2021). The goal is make sure there is justice, because a law court would decide if one party had excessively disproportionate negotiating influence, if

6 one party has trouble in the comprehension of the conditions of the deal (caused by either literacy or language problems, for instance), or if there was unreasonable terms. Other cases in which a contract cannot be enforced include where the contract has the potential to affect society, when one party fails to obey the contract by accident, when one party becomes unable to adhere to the agreement, or when more or one party is protected by the public policy ("What is an Unenforceable Contract?", 2021). Personal Liability Incase customer is injured by a stray firework in one of the fireworks shows, ACME Fireworks may be held responsible. Strict liability will apply in this situation. Strict liability is classified into three subcategories. They include keeping wild animals, engaging in ultra-risky practices, and selling faulty goods (Trautman et al,. 2021) . Strict liability applies to liability that is not founded on fault. Even if you take appropriate measures, the law clearly states that you can be held liable if you participate in those types of activities and cause harm. The reasoning is that because you choose to carry out the activity knowingly, while person injured didn’t, you have more responsibility in regards to the damage and it is required you cover the costs. The ACME Fireworks Company will undoubtedly be held responsible if a rogue firework struck a bystander, potentially blinding or killing them (Trautman et al,. 2021) . Shooting fireworks carries a significant amount of inherent danger. Every year, fireworks cause people to lose fingers, eyesight, and their lives. Highly dangerous practices (also termed as highly risky activities) are actions which have a high level of integral risk that aren’t possible to be avoided by putting in place appropriate caution, and aren’t widely done in the society (Trautman et al,. 2021) . This is the reason as to why businesses that order fireworks displays pay for insurance. This ensures in

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7 case of an accident there is ready and reliable coverage of the victim. Without the insurance, ACME Fireworks Company wouldn't have been able to survive a liability event. In a situation like the one mentioned above, it's also possible that ACME Fireworks won't be held responsible. ACME Fireworks is a company that sells fireworks and puts on shows. They aren't the creators of the product (Trautman et al,. 2021) . If there is a risk that faulty fireworks will cause damage to anybody, the fireworks' manufacturer will be held responsible. “Product liability” is a general word that applies to claims filed against producers of faulty goods. It may comprise claims for warranty breach that are contract based and negligence, and also a firm obligation in tort.” The responsibility level is highly contingent on the specific circumstances. ACME Fireworks will bear the brunt of the responsibility because it is the service provider. The result of the liability case can be influenced by factors such as what the bystander did (Trautman et al,. 2021) . For instance, despite being told not to, the bystander may have run up and started playing with the fireworks. This could result in injuries being held partly responsible. The object of liability is to alleviate the injured party's financial burden. When someone isn't deliberately putting himself in danger, it's so much simpler for a corporation to cover the damage from their insurance than for the injured to pay for it themselves (Trautman et al,. 2021) . Personal injury law's understanding of physical and emotional damage is oriented toward determining liability for the injury, such as by negligence. If both the defendant and the plaintiff share responsibility for the harm, the liability degree might be reduced. For example, a business owner could have behaved unlawfully by failing to keep the buildings facilities maintained, only for the defendant to intensify the mistake by using the ill-maintained facilities inappropriately. Individual responsibility in injury law extends to all parties and companies involved in the case, and while a

8 determination that the plaintiff was not negligent does not eliminate the defendant's liability, there is a chance to minimize the financial settlement scale (Trautman et al,. 2021) . Agency Law and Employment Types The ACME fireworks employees are regarded as representatives of the business and thus have the authority to act in the owners place. The Agency is a trustee relationship whereby the principal is owed by the agent obligation of integrity and good faith ("Agency and Employment", 2021). An agent is obliged to his principal the compliance, loyalty, efficiency, accounting and notification duties, adding unto to integrity and good faith expected of trustees (Rogers, 2012). Because of this arrangement, the corporation, or philosophy, is responsible for everything an employee does when working for ACME Fireworks. Let's say a stray firework lands on a customer because an employee fell asleep after lighting the fireworks ("Agency and Employment", 2021). The customer who was hurt will now will take legal action against both the company and the employee in search for compensation. Agency pops ups all the time in individual cases of injuries, particularly in the event the injured plaintiff takes legal actions against the defendant’s employer and the defendant under the superior rule of the respondent ("Agency and Employment", 2021). Full-time, fixed-term, part-time, apprenticeships, probationary, traineeships, commission employment and piecework are all examples of various types of employment ("Agency and Employment", 2021). ACME Fireworks is concerned the steady stream of the company potential customers is likely to dry up, thus leaving the company with a large number of employees and no other means of paying them. Hiring independent contractors as employees would benefit the ACME fireworks company ("Agency and Employment", 2021). Contracts may be for a span that encompasses the current consumer flow. Employment contracts might be extended as required,

9 and in the event a flow of fresh customers remains steady, the all-time jobs may possibly be viewed in a more realistic way. Business Entity ACME Fireworks Company does not operate like a one-person shop. The explanation behind this is that it will impose the company's responsibility to the owner. Fireworks bear a certain amount of risk ("Choosing the Best Business Entity for Your Startup", 2021). One of the most relevant factors should be liability. The most advantageous corporate vehicle is the limited liability company “LLC is the effort to bring together the finest aspects of a partnership and the finest aspects company aspects. Therefore the LLC laws usually showcase smoother incorporation (however, under the law registration is a requirement) and much less fees involved in the filing, flow via the taxation process(in place where the LLC participants earnings are taxed but not the company), corporations continuity (the leaving of a member doesn’t have the power to influence LLC dissolution), flow via taxation and restricted liability, in which a company is responsible for the obligations it has but the shareholders are not ("Choosing the Best Business Entity for Your Startup", 2021). In this way, the organization assumes the risk rather than the shareholders. Damages caused by stray fireworks will be covered by the insurance. Furthermore, taxes would be focused on individual profits rather than the company's. Conclusion ACME Fireworks has the potential to succeed. Unnecessary payments can be avoided if sufficient steps are taken, such as selecting the correct business company and recruiting staff accordingly. It's important not to recruit full-time staff unless they're absolutely necessary.

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10 Common law governs the ACME fireworks company and its customers as well. ACME Fireworks would benefit from becoming a limited liability company in the future, as this would alleviate liability concerns.

11 References Common Law and Uniform Commercial Code Contracts | Work Within the Law . Courses.lumenlearning.com. (2021). Retrieved 1 April 2021, from https://courses.lumenlearning.com/workwithinthelaw/chapter/formation-and-types-of-contracts/ . 1557038 What is an Unenforceable Contract? . Kirasystems.com. (2021). Retrieved 2 April 2021, from https://kirasystems.com/blog/what-is-an-unenforceable-contract/ . Trautman, L. J., Johnson, V., & Koretz, L. (2021). Customer Injuries: An Introduction To Tort Law. Available at SSRN 3795841 . Agency and Employment . Boisestate.pressbooks.pub. (2021). Retrieved 2 April 2021, from https://boisestate.pressbooks.pub/buslaw/chapter/agency-and-employment/ . Sole Proprietorship - Definition, Advantages and Disadvantages . Corporate Finance Institute. (2021). Retrieved 2 April 2021, from https://corporatefinanceinstitute.com/resources/knowledge/strategy/sole-proprietorship/ . Choosing the Best Business Entity for Your Startup . Early Growth. (2021). Retrieved 2 April 2021, from https://earlygrowthfinancialservices.com/choosing-best-business-entity- startup/ .

Business Law (1)

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