BUS 311 Ashford University Law of Contracts and Agency Law Discussion

BUS 311

ashford university


Question Description

I don’t know how to handle this Law question and need guidance.

You are the manager of Acme Fireworks, a fireworks retailer who sells fireworks, puts on ground display fireworks, and large aerial display fireworks. The company started in the owner’s garage two years ago and now has 15 employees that you manage. The company started as a sole proprietorship, and the owner has never changed the entity. The owner has informed you that the company has received inquiries from several large businesses wondering if the company could create several fireworks displays on a regular basis. The owner told the inquirers that the company could fill such display orders, and a price per display was agreed upon. It was discussed that most of the cost for a fireworks display is for skilled labor, insurance, and the actual service of setting off the fireworks. No other details were discussed. The owner is anticipating that new employees will need to be hired, but he is worried that if the large orders for fireworks displays do not continue, the company will not have the funds to pay the new employees. The owner is now considering changing the business entity, but he does not know what entity to form or how to form it.

The owner has asked you to do the following:

  • Determine if the contracts with the businesses will be governed by common law or the Uniform Commercial Code (UCC), and explain why.
  • Analyze whether the owner formed a contract with the businesses, and apply the five essential elements of an enforceable contract.
  • Explain the potential personal liability to Acme Fireworks if a spectator is injured by a stray firework from a fireworks display.
  • Discuss the different employment types and relationships relevant to agency law, and analyze the advantages and disadvantages of each type specific to Acme Fireworks.
  • Explain why Acme Fireworks should not operate as a sole proprietorship. Recommend a new business entity, and provide rationale to support your recommendation.

For each task, be sure to analyze the relevant law, apply the facts to the law, and make a conclusion.

The paper

  • Must be 8 to 10 double-spaced pages in length (not including title and references pages) and formatted according to APA style as outlined in the Ashford Writing Center (Links to an external site.).
  • Must include a separate title page with the following:
    • Title of paper
    • Student’s name
    • Course name and number
    • Instructor’s name
    • Date submitted
  • Must begin with an introductory paragraph that has a succinct thesis statement.
  • Must address the topic of the paper with critical thought. That is, describe what your response is to the content, either positive or negative, and defend your position. If multiple options, alternatives, and/or positions are present and are being rejected, you must also defend the reasons for rejecting an option.
  • Must end with a conclusion that reaffirms your thesis.
  • Must include at least five scholarly sources, two of which must be from the Ashford University Library, in addition to the course text.
  • Must document all sources in APA style as outlined in the Ashford Writing Center.
  • Must include a separate references page that is formatted according to APA style as outlined in the Ashford Writing Center

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Final Answer

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Law of Contracts and Agency Law




Law of Contracts and Agency
Sole Proprietorships are lawful entities that can transact business as provided by
American laws since there are provisions for their formation and those that guide their
transactions (University of Richmond). The Law of Contracts and Agency Law are vital
legislations that safeguard business agreements and relations between managers and subordinates
respectively. The Law of Contracts sees to it that formation, interpretation, and remedy of
contracts id done lawfully (T. Muris, 1980) while Agency Law sees to it that construction and
management of agency relationships are lawful and respectful (Hill and Jones, 1993). Even in
sole proprietorships, a business still owes the customers a duty of care to avert negligence
(Eisenberg, 1989). Moreover, Company Law allows for many formations for the existence of
companies beyond the sole proprietorship (Brian Cheffins, 1997).
Determine if the contracts with the businesses will be governed by common law or the
Uniform Commercial Code (UCC), and explain why.
The Common Law on Law of Contracts would apply despite most of the transactions
being in commercial nature and therefore, the contracts should be addressed in a way that would
not contradict American laws. Due to the nature of the agreement, variables like display orders
and price per display would yield to elements of a contract thereby giving the law of contracts
the more validation. The Uniform Commercial Code would limit the functions of the company to
interstate deals whereas common law would open the company to doing business throughout the
United States and even abroad (Lumen Learning). Moreover, there needs to be uniformity
between the Commercial codes of the various states the company intends to operate in hence will
limit the business to the geographical locations hence reducing the scope of the business.



Furthermore, the law is limited to governing commercial deals only, leaving out
important aspects like ownership of companies and recruitment procedures in hiring personnel.
Commercial contracts are those that involve the sale and leasing of equipment, banking, loans
and titles of documents and investment securities which are at a trivial stake in the case of Ucme
Fireworks (Lumen Learning). Common-Law, on the other hand, gives companies and businesses
a bigger license to operate anywhere as long as the activities are lawful and ethical. The
measures towards the settlement of breaches of contracts are more stringent in the case of
common law compared to the Uniform Commercial Code, hence offering the company higher
chances of compliance from the parties they enter contracts with (Lumen Learning). Moreover,
other than the formation and ownership of companies, Common Law governs the recruitment of
personnel and dissolution of companies hence offering a logical platform for being the preferred
law in this context.

Analyze whether the owner formed a contract with the b...


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