Acme Fireworks, a fireworks retailer

 

 

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.

Sample Solution

association, because of the huge number of requirements on a circumstance (Flinsch-Rodriguez, 2019). Fiedler, in his Contingency Theory of Leadership (Fiedler, 1967), recommends that the viability of a gathering is subject to the administration styles of the pioneer and their favourability to the circumstance. A large part of the hypothesis is laid out around the most un-favored colleague scale (LPC). The LPC expects to measure a potential chiefs way to deal with an errand on a size of relationship roused to task spurred, where the pioneer fits on the scale permits what is happening to be reasoned, and in this manner permits the distinguishing proof of appropriate pioneers for undertakings. The favourableness of the circumstance relies upon three qualities: pioneer part relations, the help and trust the pioneer as from the gathering; task structure, the lucidity of the errand to the pioneer; and positional power, the power the pioneer needs to survey a gatherings execution and give prizes and disciplines (Fiedler, 1967). In the event that the pioneers approach matches what is expected from going on, achievement is anticipated for the gathering. Fiedler’s possibility model offers an exceptionally grave categorisation of administration, obviously characterizing which circumstances endlessly won’t bring about progress for a likely pioneer. At the senior administration level of a hierarchal construction inside an association the hypothesis can be applied openly, right off the bat because of the simplicity at which people can be supplanted on the off chance that their LPC score doesn’t match that expected of the circumstance (Pettinger, 2007). Furthermore, and in particular, is to guarantee that the senior administration are ideally suited to effectively lead the association. Notwithstanding, further down the order Fielder’s possibility hypothesis starts to hold substantially less significance, it becomes unfeasible according to a hierarchical viewpoint because of the quantity of individuals at this degree of initiative. The strategies of coordinating the pioneer with their most un-favored collaborator is difficult to reliably accomplish, so a more continuum based approach is required.

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