Business law impacts our everyday lives, both personally and professionally. Businesses enter contracts, manufacture goods, sell services and products, and engage in employment and labor practices activities that must all adhere to certain laws and regulations. Recognizing and evaluating legal issues is a fundamental skill that will help you navigate commercial relationships and avoid potential problems in the business world.
The final assessment for this course will require you to analyze three case studies and produce a short report for each. You will apply your legal knowledge and your understanding of the types of business organizations. The project is divided into three milestones, which will be submitted at various points throughout the course to scaffold learning and ensure quality final submissions. These milestones will be submitted in Modules Three, Five, and Six. The final project will be submitted in Module Seven.
This assessment addresses the following course outcomes:
Apply appropriate elements of the U.S. legal system and the U.S. Constitution to business scenarios for impacting decisions in authentic situations
Apply concepts of ethics, morality, and civil and criminal law to business scenarios for informed corporate decision making
Analyze the basic elements of a contract and a quasi-contract for their application to commercial and real estate scenarios
Differentiate between the various types of business organizations for informing rights and responsibilities
A: The most appropriate jurisdiction, in this case, is general jurisdiction. This is because Novelty has substantial systematic contacts that relate to the forum. Therefore, the court can apply the jurisdiction to the two parties. The state court has judicial power over a person who is affected by the state. The ‘long arm’ set rules and guideline to state on how they can exercise their constitutional power to oversee the conduct of non- citizens (Bachar & Hensler, 2017).
B: ADR is the process of settling disputes by other means other than the use of the court.
- Expert Arbitrators- in regard to the proceedings of the court cases the judge acted as an expert specialized in a particular area of law. The judge depends on the facts presented to her or him and the entire process is quite expensive (Kubasek, 2011). The court process may seek the witness of the experts who may extend the length of the trial and the entire cost may be expensive to both of the parties involved. ADR does not depend on the evidence of the experts and the general proceedings are cheaper and quicker (Resolution, 2013).
- Adversarial- court proceedings are about winning the case not losing and they are mostly adversarial, while ADR intention is to find an amicable solution to disputes (Blake, Browne & Sime, 2016). The use of ADR mostly allows the participation of the two parties and the solution may bind the two parties (Fiadjoe & Okyir, 2016).
- Willingness to compromise – the application of ADR relies upon the willingness of the two parties involved. One party like in this case Novelty may not accept that there exists a problem. The company may fail to accept that it has actually caused damage to Donald Margolin.
- Uncertainty – Although, ADR is mostly cheaper and quicker. This case may take a long time depending on the method of dispute resolution that the two parties may apply. There is certainty in court cases (Lee, Yiu & Cheung, 2016).
C: It will be in the best interest of Funny Face to negotiate terms straight with Mr. Margolin. This negotiation will subsequently assist keep this incident away from media. It would then permit Funny Face to correct action of placing the PYR chemical in product that FDA never approved.
D: The corporate officer is reliable for the criminal acts. This is because of the apparent negligence on the part of the management.
E: The classification of the criminal act committed by Funny Face / Novelty is called Infractions. This kind of crime causes less harm and includes minor offenses and they are mostly punishable by a fine. Donald Margolin only seeks for the compensation because of the negligence of the Novelty which only causes damage to his business reputation and face (face damage). This is a minor case. Funny Face advice products to the internet that causes harm to its customers (Mikula, 2017). The company should first confirm the quality of the products so as to ensure that all the products produced are safe for use by the general public. The error was due to negligence
F: As stated above both parties knowingly and willingly arrived at the decision of putting the PYR chemical inside the aftershave and then production process was to follow. Chris, Funny Face, Novelty, matt, and Ian should all be accountable to cover any of the Donald Margolin depend in this case. This is because they all come into agreement of making the products.
G: The ethical decision-making process under WPH (Whom, Purpose, How) guidelines consist of three major elements. An important set of ethical rules needs recognition that the top managerial decision must satisfy the following key criteria: The decisions affect specific groups of stakeholder in the processes of the firm (Meyerson, 2015). The appropriate question is, therefore, whom this would touch directly. The decisions are established in order to achieve a particular purpose. Business decisions are directed toward achieving an ethical end. The decisions should satisfy the standards of action which focused on business behavior (Ware, 2016).
A: Appropriate Jurisdiction
Managers must put in place set guideline and rules for how to come up with ethical decisions. The WPH method of decision-making process had made me come up with the conclusion of many ethical issues in this case study. Whom; the decision only affects those who consume the products. Therefore, it was unethical putting the PYR chemical into the goods offered by the company (product). Purpose; the purpose was to reduce the cost associated with the production process, which led to the production of a harmful product by the company (Ray, Kennedy, Herring & Essary, 2015).
Case Study 2
- Different elements must exist for the purpose of proving the existence of a valid contract between the chain store and Sam. The major four elements that are significant to a contract are the consideration, the agreement, legal object and contractual capacity. The first elements would exist when Sam through word of mouth agreed to transfer the required 1000 units to a chain store. Sam agreed to send the required 1000 units to create the existence of element to a contract. The consideration element would exist if the chain store and Sam agreed on the exchange benefits that he would get after the transaction of the 1000 units. This was not carried up to the agreement (contract) would be invalid. The third element that is contractual capacity would be seen to be in place if Sam has the ability (legal ability) to of creating a binding contract. Sam is old enough and is capable of creating contract agreement with the chain store this makes the element to be valid. The 4th element that is legal agreement would exist if the two parties made the legal contract on the basis of the legal object. Both the chain store and Sam did not make the contract on the basis of the legal object so this is not valid.
- Even if there is no valid legal agreement between the chain store and Sam, there exist elements named as a promissory estoppel or a quasi-contract. A quasi – contract is the obligations imposed by the court with the intention of preventing unjust enrichment. A quasi-contract comes into existence with the inclusion of the following facts: in case Sam got some kind of payment for his 1000 units supplied to the chain store for the completion of the exchange. A promissory estoppel is where a party exchanges her/his position substantially either by forbearing or acting depending on the promise gratuitous, thereafter the party can implement the promise through the important elements of a contract are not available. The principle may come into existence in this case when Sam agreed to a contract but did not succeed with the actual promise that he made. The court can apply this because it is the gratuitous promise of transferring 1000 units to the chain store. There was no conversation of exchange from the chain store, therefore. The promissory estoppel is void because there is no conversation from the exchange but only the 1000 units supplied to the chain store (Pryor, 2017).
- The obligations and rights of both the tenant and Landlord rely upon the termination of their contract. The contract may be in form of writing or verbal under a well-specified lease agreement. Some of the fact that may support that Sam is in breach of contract is the noise which he makes with his barking invention that causes the other tenants to complain. It is the duty of the landlord to ensure that there is silence in the apartment and he should kick out those who made noise. The other facts that support that Sam did not breach the contract are that he informed his landlord about him making an invention in his apartment and instead the landlord wished him well. The implication from the landlord should allow him to continue with his invention in spite of complains from the tenant and the illegal business that Sam undertakes in his apartment the landlord is able to enforce the eviction.
- Based on the obligations and right, Sam’s Landlord has no authority to evict due to the fact Sam does not have any valid business contract with the chain store (Fiadjoe & Okyir, 2016).
- Some of the defenses available for Sam in case his landlord attempts to evict him from the building include: The land orders approval vote since Sam is yet to send anything to chain store. Moreover, in return, Sam is yet to accept any kind of exchange. Sam should express that he is yet to finalize any particular contract. Thus, Sam can show that he is able to move his enterprise to a different office away from the apartment. Once this is done, Sam is able to send the 1,000 units to chain store and finish his contract.
- A business entity describes an establishment former as well as administered according to the law to engage in activities of business, charitable activities or additional allowable activities. Many entities usually, business ones are established for services and product sales. Many kinds of such entities have been identified and defined in various countries’ legal systems (Kubasek, 2011). They include cooperatives, sole traders, partnerships, corporations, limited liability Company alongside additional particularly allowed and labeled kinds of entities. The particular rules differ by country alongside province or state. Beneath, I present a discussion of 4 major kinds of entities:
Sole Proprietor Partnership: This puts all business liabilities for operations and finance on the proprietor. The business owners’ personal properties remain tied to his business and hence the owner assumes all risks against his personal property in case there is a financial hardship. The owner has to file self-employment taxes alongside yearly income tax returns on Form 1040. The losses and profits and reported via owner and remain taxed at individual rate It is the simplest entity to establish, however, the owner characteristically has to sell his business to regain his investment (Cindy, 2015). Advantages: Easy to start and maintain; owner and business are single entity legally; no fees in the creation and the owner could deduct a net business loss from his personal income taxes. Disadvantages: The owner is liable personally for all debts, business liabilities, and judgment; and owner has to pay taxes (personal income) for each net profit of the firm.
Partnership: It has two or additional owners who share equal controls unless the agreements indicate otherwise or structure is established as a limited one. Loses and profits of business flow to partners and become taxed at the individual rate. Operating partners always assume risk financially and legally. Creditors of the business are able to gather debts from a personal asset of the partner. A partner has to sell his interest to recoup the investment. Advantages: Easy to establish and maintain; no fees for creation; owners could report the share of net business loses on their personal income. Disadvantages: All partners remain liable jointly and personally for all debts, liabilities, and judgment. Owners have to pay personal income taxes for each business profit.
Corporation: It has unlimited owners/shareholders. Business is distinct from owners in financial and legal issues. Loses and profits are taxed at corporate rates. In case of profit realization, shareholders are paid and subsequently report it as income and subsequently pay tax at the individual rate. A shareholder has to sell his interest to recoup his investment. A shareholder can trade his shares in the publicly held corporation on the open market. Advantages: Owners enjoy limited liabilities for debts, liabilities, and judgment. Certain benefits could be deducted as expenses of the business. Owner and business could pay taxes with good accounting by splitting business profits. Disadvantages: Expensive to create and maintain, complex paperwork has to be filed with state secretary and has to pay its own taxes as distinct tax entry (Benefits and Drawbacks of Different Types of Business Entities, 2015).
Limited Liability Company: LLC is hybrid of corporation and partnership. Owners are safeguarded from liability (personal) as in the corporation. However, owners benefit from tax in similar manner a partnership enjoys. LLC is never perceived as business kind for taxation purposes by the government (federal). LLC business has to file its taxes using his chosen acknowledged structures. The owner must file form 8832 with IRS (Internal Revenue Service) to alter LLC classification. Advantages: Owners enjoy limited liability for debts, liabilities, and judgment even where they engage in substantial business control; business losses and profits are allocated to owners based on dissimilar lines compared to ownership interest. Owners are able to select how LLC shall be taxed, either as done in partnership or corporation. Disadvantages: Costly to establish compared to sole proprietorship or partnership.
- The recommended entity for Arcadia Sports is LLC. The reason is that Owners are safeguarded from personal liability as in the corporation; however, owners enjoy tax advantages. LLC is never acknowledged as business kind for tax purposes by the government (federal).
- The type of entity that Josh and Jeb might be personally liable to Jane for damages are sole proprietorship and partnership.
- The personal creditors of Jeb would be able to seize Arcadia Sports’ profits and assets under partnership, sole-proprietorship and corporation. However, the ease of this ability reduces as one moves from sole proprietorship to partnership and to corporation.
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