Business Law Question

This is the article of the firac.: Fiona Flitwick owns and manages Wicked Weeds, a garden center that specializes in exotic plants and shrubbery. In addition to selling plants and gardening supplies, she also hosts classes for new “plant parents” that teach them how to properly care for poisonous plants. After being featured on a popular television network, the business flourished. Unable to keep up with the demand, Fiona asked her friend Henry Potts to help her around the store for $20 an hour. Henry enjoyed the work and often put in more than 40 hours a week, earning nearly $50,000 in the first year.

Wicked Weeds continued to grow and after a year, Henry asked for a raise. Fiona was happy with his work, and she did not want to lose him to one of her larger competitors. Fiona offered Henry 25% of the net profits at the end of each year in addition to a salary of $50,000. Henry’s bonus was conditioned upon him taking on new responsibilities at the garden center. He would teach all planting classes, using the curriculum created by Fiona, and handle all inventory and ordering. Fiona trusted Henry, but she made sure that she had access to the inventory and order forms to review and approve. Although she liked the idea of having help, Wicked Weeds was her pride and joy, and she did not want to relinquish control. Fiona had taken out a second mortgage on her home to purchase Wicked Weeds and would bear the financial responsibility if Henry made a mistake. She presented her offer and terms to Henry.

After discussing the opportunity with his wife, Henry decided he would accept her offer if she agreed to a few conditions. A tech-savvy millennial, Henry had a degree in digital marketing from Garden State University (GSU) and wanted the opportunity to grow Wicked Weeds’ online presence. He agreed to her terms on the condition that he could also develop and manage Wicked Weeds’ social media and marketing campaigns. Fiona spent most of her time outdoors and thought that the internet was a waste of time, but she agreed that he could create the advertisements so long as it didn’t interfere with his other responsibilities. Henry exclaimed, “You got a deal, partner!”

For the next three years, both parties were happy with the agreement. Henry felt that he was finally able to express his creativity through social media marketing, and Fiona could focus on gardening rather than on what she considered to be the boring business stuff. Initially, Fiona reviewed and approved Henry’s inventory and ordering forms every week. It was time consuming and because she found no discrepancies, she began to check the forms less frequently. Each year, the profits grew, and Henry received a bonus (25% of the annual net profits) in addition to his salary.

One evening, Fiona heard her 13-year-old granddaughter’s phone playing a song with suggestive lyrics and curse words. Furious, Fiona confiscated the phone and threatened to tell the girl’s mother. Her granddaughter exclaimed that it was a post from Wicked Weed’s Instagram, and she didn’t know it was going to play inappropriate lyrics. Horrified, Fiona looked at the post and saw Henry dancing and singing Water a Plant, or WAP for short.

Many Wicked Weeds’ clients are conservative and elderly, and in the next few days, Fiona received more than 50 complaints, with many long-time customers cancelling their orders. She ordered Henry to delete the post and terminate the Wicked Weeds’ Instagram account. She then told him he was fired. Henry responded, “You can’t fire me, as I’m your partner, not an employee.”

Given the hostility between them, Henry has filed suit against Fiona Flitwick and Wicked Weeds, asking the court to dissolve the partnership and grant him 25% of the business. Fiona argues that Henry was nothing more than an at-will employee and she had the authority to fire him.

The Uniform Partnership Act was initially approved in 1914 and was adopted by all other states (except Louisiana) over time. It was subsequently revised as the Revised

Uniform Partnership Act of 1997

(RUPA). Garden State has adopted the Revised Uniform Partnership Act of 1997. Section 202 governs the formation of a partnership. Relevant provisions of Section 202 and the official comment providing further explanation follow:

SECTION 202. FORMATION OF PARTNERSHIP (Uniform Partnership Act of 1997)

Except as otherwise provided in subsection (b), the association of two or more persons to carry on as co-owners a business for profit forms a partnership, whether or not the persons intend to form a partnership.
2. Omitted

.

3. In determining whether a partnership is formed, the following rules apply: …

(3) A person who receives a share of the profits of a business is presumed to be a partner in the business, unless the profits were received in payment:

(i) of a debt by installments or otherwise;

(ii) for services as an independent contractor or of wages or other compensation to an employee;

(iii) of rent;

Official Comment to Section 202:

1. … a partnership is created by the association of persons whose intent is to carry on as co-owners a business for profit, regardless of their subjective intention to be “partners.” Indeed, they mayinadvertently create a partnership despite their expressed subjective intention not to do so. The language alerts readers to this possibility. … As under the UPA, the attribute of co-ownership distinguishes a partnership from a mere agency relationship. A business is a series of acts directed toward an end. Ownership involves the power of ultimate control. To state that partners are co-owners of a business is to state that they each have the power of ultimate control….

Omitted

2. Subsection (c) provides three rules of construction that apply in determining whether a partnership has been formed under subsection (a). … The sharing of profits is recast as a rebuttable presumption of a partnership, a more contemporary construction, rather than as prima facie evidence thereof. The protected categories, in which receipt of a share of the profits is not presumed to create a partnership, apply whether the profit share is a single flat percentage or a ratio which varies, for example, after reaching a dollar floor or different levels of profits.

Like its predecessor, [the Uniform Partnership Act of 1997] makes no attempt to answer in every case whether a partnership is formed. Whether a relationship is more properly characterized as that of borrower and lender, employer and employee, or landlord and tenant is left to the trier of fact.

Use the FIRAC model to analyze whether the agreement between Fiona and Henry formed a partnership under Section 202 of the Uniform Partnership Act of 1997, which was adopted by Garden State several years ago. Here is the firac rubric:FIRAC represents the method attorneys use to analyze and solve a legal problem. This summary of the model incorporates tips to avoid many of the mistakes made by prior LGLS 3610 students on their first FIRAC paper. Read it carefully and review the readings and videos in the e-book and posted on iCollege to make sure that you understand how to use the model before you begin writing your paper

FIRAC Model for Legal Analysis

Summarize the relevant FACTS. Do not simply restate the scenario (even in your own words); instead, determine what facts are essential to solving the legal business problem the scenario poses and only include those. Any facts that you refer to in the application section of your paper should be stated first in the fact section.

FACTS
ISSUE	Identify and state the legal ISSUE (or question that has to be decided), incorporating the relevant facts. It can be phrased as a question or as a statement, e.g., “The issue before the court is whether a defendant driver who ran a red light and struck the plaintiff, a pedestrian, while she was crossing the street in a cross-walk, is negligent and liable for her injuries.”
RULE	After you state the question that a court would need to decide if this case were litigated, you need to state the appropriate legal RULE (or rules) accurately and thoroughly, including all the elements or components of the rule, as well as any pertinent exceptions or defenses that will factor into your analysis.
APPLICATION	Use the rule as a legal checklist of each point you need to discuss as you APPLY the rule to the facts of the problem, demonstrating what specific information given in the problem proves each part of the appropriate rule. After you write this section, go back and compare it to your facts — any facts that you used in applying the legal rules also need to be in your fact statement. [Many students have told me that they rewrite their fact statement after writing the application!]
CONCLUSION	State your CONCLUSION in one or two sentences, but not as a lengthy paragraph that simply restates your whole paper as a way to increase your word count. Your conclusion should be the answer to the legal issue that you believe best resolves by the problem raised by the scenario.