Question

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

Answer 1

Introduction: As we are looking at doing business with other local companies I have suggestions that I feel will go a long way in helping Acme to reach our expansion goals. We know that there are many liabilities to owning, manufacturing, selling and using fireworks and the potential of injuries to our consumers and their customers can be devastating. However, if precautions are taken and additional qualified workers are employed the risks are reduced. Thesis Statement: For Acme Fireworks making sound business decisions that will grow and expand the company starts with contracting work through large businesses in the area and figuring out which business entity will work best for the company during and after the expansion plan. As the manager for Acme firework I have to determine if the contracts will be govemed by common law or uniform commercial code (UCC), examine if the contracts are enforceable, analyze potential liability issues, establish employment types, and recommend to the owner a new business entity for the expansion of the company Establishing If a Contract Was Formed and Analyzing If They Are Enforceable: In this paragraph I will discuss if the owner has established enforceable contracts with the businesses. I will also use the five essential elements of enforceable contracts in this analysis.

Common Law versus Uniform Commercial Code(UCC): Commercial Code and determine which will goven the contracts formed with the local businesses. I will also provide an in depth explanation to why either common law or uniform commercial code was chosen to govem the contracts Employment Types and Agency Law: This paragraph will discuss the different employment types and how they relate to agency law. I will also discuss the advantages and disadvantages of each of the specific employment types within Acme Firework:s. Liability: This paragraph will discuss all of the potential liability that will be encountered if a spectator is injured. I will also provide examples of different scenarios to analyze all of the potential liability risks to Acme Fireworks.

Sole proprietorship and New Business Entity Recommendation: In this sole proprietorship is not the best for Acme Fireworks as the business undergoes this process of growth. I will also provide the owner with a business entity option that will best benefit the company and explain how to form the specific entity paragrap h I will discuss sole proprietorship business entities and explain why a Conclusion: After detemining if the contracts between Acme Fireworks and local businesses were govemed by common law or UCC, I was able to recommend a new business entity to the owner as well as explain how to form the entity. I also analyzed any potential liability issues and gave solutions to keep them from occurring. Figuring out which business entity works best for Acme Fireworks has helped in the plans to move forward with growing the business. I hope that the information thatI have provided will help the company owner make vital decisions that will continue to feed the growth of the company and allow more businesses to utilize our services.