Final Paper: Essential Elements of an Enforceable Contract (Term Paper Sample)
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.
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.
Must include a separate title page with the following:
Title of paper
Course name and number
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.
Must document all sources in APA style as outlined.
Must include a separate references page that is formatted according to APA style as outlined.
Acme Fireworks Framework
Acme Fireworks Framework
In recent days, Acme Fireworks has entered in a deal with several large businesses that want the company to supply them with large repeat orders. For this to be possible, there is need to conduct an assessment to determine whether Acme Fireworks is capable of servicing those orders and what needs to be done in order to fulfill such big numbers. The word of mouth agreement arrived at between the owner and the retailers needs to be appraised to establish whether it fits the category of an enforceable agreement. Meeting these new orders means that the overall workload that the company has to deal with will go high and this will demand that the organization hires new staff to deal with the extra workload. Due to the retail presence, the company may also be forced to alter its business entity status to minimize the company liability. At the present, the company only manufactures and sells the fireworks but it does not have to set them up. Even as the company hires new staff, it will need to come up with a formula that allows it to adjust once the volume goes down. This paper will analyze these issues to determine if there is an existent contract as well as what will be the most excellent solutions to meet the new workload as well as all the emerging liabilities.
The proprietor of Acme Fireworks has gotten different proposals by big retailers who want to start purchasing the company’s products. He has agreed to this proposal and indicated that he is capable of making the deliveries in good time. The two parties have arrived at an agreement that they are content with the agreement including the price. The most important thing now is to determine if this agreement captures the basic tenets of a contract that are set out in law (Zafar, 2013).
For a contract to be binding, it has to have five components namely the offer, acceptance, consideration, legality and capacity. The talk that the owner had with the large retailers is the starting point of the contract. The retailers approached him with the promise of buying his fireworks in large quantities. The retailers even went ahead to strike a deal on the total cost of the fireworks per unit and this is considered to be the consideration for the contract. The owner indicated that he had the capacity to service their recurring orders which is an indication of acceptance of the offer. Given that the selling of the fireworks to these new customers is a legal transaction and it is clear that the two parties have capacity (Zafar, 2013). From every indication, this is a binding contract but is nullified by the UCC statute of frauds which indicates that all contracts between traders that exceed $500 needs to be put down in writing. The statute of frauds makes some exemptions to this rule especially on the area of manufactured products or the admission to a court of law on the existence of an oral contract. The other exemption is in the case of partially accomplished contracts as well as the case where there is a memo detailing the absence of a written contract. Considering that fireworks are specially manufactured goods and not widespread, this would be termed as a legally binding contract (Blount Law, 2015). Since the availability of an enforceable contract has been established, the next step in the process is to determine the correct business entity for Acme Fireworks.
Since its establishment, the owner of Acme Fireworks has run his business as a sole proprietorship. This type of business has numerous downsides since it makes no distinction between the business and the owner. The two are considered as one. The owner has been lucky that none of his employees has been injured in the process of setting up the fireworks. If handled in the wrong manner, fireworks can be hazardous. If any injuries h...
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