Business Law Question

For your Final Paper, assume the following scenario: You are the manager of Acme Fireworks, a fireworks retailer who sells fireworks, and produces fireworks displays with ground display fireworks and large aerial display fireworks. The company started in the owner’s garage 2 years ago and now has 15 employees who 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.

In your paper, the owner has asked you to do the following:

• Analyze if the contracts with the businesses will be governed by common law or the Uniform Commercial Code (UCC).Explain why.
• Analyze whether the owner formed a contract with the businesses.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.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.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.

The Final Paper

• must be eight to 10 double-spaced pages in length (not including title and references pages) and formatted according to APA Style Links to an external site. as outlined in the Writing Center’s APA Formatting for Microsoft Word Links to an external site..
• must include a separate title page with the following:Title of paper in bold fontSpace should appear between the title and the rest of the information on the title page.Student’s nameName of institution (The University of Arizona Global Campus)Course name and numberInstructor’s nameDue date
• must utilize level headings to organize the paper. See the APA Style Element Links to an external site. resource for assistance.
• must utilize academic voice. See the Academic Voice Links to an external site. and Making Your Writing Flow resources for additional guidance.
• must include an introduction and conclusion paragraph. Your introduction paragraph needs to end with a clear thesis statement that indicates the purpose of your paper.
• 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 use at least five credible and/or scholarly sources, two of which must be from the University of Arizona Global Campus Library, in addition to the course text.
• must include a separate references page that is formatted according to APA Style as outlined in the Writing Center.

1
Final Paper: Acme Fireworks Scenario Outline
Jazmen Davis
University of Arizona Global Campus
Professor Jennifer Stephens
BUS 311: Business Law
11/12/2023
2
Final Paper: Acme Fireworks Scenario Outline
I.
Introduction
A. In the dynamic scenario of Acme Fireworks, a growing business specializing in fireworks
displays, several legal considerations arise as it navigates potential contracts, liability
issues, and the need for a suitable business entity.
B. As the manager entrusted with addressing these concerns, a thorough analysis is essential
to ensure the company’s continued success.
C. This will explore the questions surrounding contract governance, the formation of
contracts, personal liability implications, employment relationships, and the drawbacks of
sole proprietorship, and ultimately recommend a new business entity to fortify Acme
Fireworks for its future endeavors.
II.
Analysis of Contract Governance
A. In evaluating whether the contracts with the businesses will be governed by common law
or the Uniform Commercial Code (UCC), it is essential to consider the nature of the
transactions.
B. The UCC primarily governs the sale of goods, while common law governs services and
other transactions (Finnegan, 2019).
C. In the case of Acme Fireworks, where the primary concern is providing a service of
fireworks displays, common law can be the governing body.
D. This is because the emphasis is on skilled labor, insurance, and the actual service of
setting off the fireworks, making it more aligned with common law principles.
III.
Contract Formation and Essential Elements
3
A. The five essential elements of an enforceable contract must be applied to determine if the
owner formed a contract with the businesses.
B. These elements include an offer, acceptance, consideration, legality of purpose, and
contractual capacity (DHIVYALAKSHMI, 2023).
C. The owner’s agreement on a price per display with the businesses indicates an offer and
acceptance.
D. Consideration is present in the agreed-upon price for the fireworks displays.
E. The legality of purpose is fulfilled as the business is legitimate, and the owner can enter
into a contract.
F. Therefore, it can be concluded that a valid contract exists between Acme Fireworks and
the businesses.
IV.
Personal Liability in Fireworks Displays
A. Regarding potential personal liability, Acme Fireworks must be aware of the legal
implications if a stray firework injures a spectator.
B. In such cases, the business may be liable for negligence (Smith & Fotheringham, 2020).
C. The duty of care must be upheld, ensuring all safety measures are in place during the
display.
D. Failure to do so may result in legal consequences, and Acme Fireworks could be held
financially responsible for any injuries caused by their fireworks displays.
V.
Employment Types and Agency Law
A. Various employment types and relationships are relevant to agency law, considering the
potential need for hiring new employees.
4
B. These include employees, independent contractors, and agents (Kim, 2022). Employees
may offer loyalty but come with the burden of employer liability.
C. Independent contractors provide flexibility but may lack loyalty. Agents act on behalf of
the company but may also lead to liability.
D. Analyzing these options, Acme Fireworks must weigh the advantages and disadvantages
to make informed decisions based on their specific needs and concerns.
VI.
Rationale for Not Operating as a Sole Proprietorship
A. Operating as a sole proprietorship exposes the owner to unlimited personal liability.
B. In the event of legal issues or financial challenges, the owner’s assets are at risk.
C. This form lacks the legal separation between the business and the owner, making it a
risky choice, especially considering the potential expansion of Acme Fireworks.
VII.
I.
Recommendation for a New Business Entity
Considering the potential growth and risks, a Limited Liability Company (LLC) is
recommended for Acme Fireworks.
II.
An LLC combines a corporation’s liability protection with a partnership’s flexibility.
III.
This would shield the owner’s assets, protecting in case of unforeseen challenges (Soener
& Nau, 2019).
IV.
Additionally, it offers a more straightforward structure than a corporation, aligning well
with Acme Fireworks’ current size and operations.
V.
Conclusion
A. Legal considerations for Acme Fireworks underscore the need for strategic decisionmaking.
5
B. From contract governance and formation to addressing personal liability and choosing
appropriate employment types, each aspect plays a crucial role in shaping the company’s
future.
C. Recognizing the drawbacks of operating as a sole proprietorship, a recommendation is
made for Acme Fireworks to adopt a Limited Liability Company (LLC) structure.
D. This choice provides the necessary liability protection while maintaining operational
flexibility.
E. By implementing these legal insights, Acme Fireworks can confidently navigate its
expansion, ensuring a robust legal foundation for sustained success.
Summary of the Sources
Finnegan, D. L. (2019). Private Ordering, Dynamic Merchant Tradition, and the Uniform
Commercial Code. Research Handbook on International Commercial Contracts, 181-195.
The article delves into the realm of U.S. sales law. The focus is on the Uniform
Commercial Code (UCC) as the principal regulator of cross-state sales contracts (Finnegan,
2019). The analysis explores the interplay between private ordering, merchant traditions, and the
UCC, emphasizing its adaptability to evolving commercial practices.
Dhivyalakshmi, T. (2023). A Brief Introduction to Contract and Its Types.
The article explores the essence of contracts as legally binding agreements. As a
foundation for business and personal transactions, contracts clarify rights and obligations,
minimize misunderstandings, and offer legal remedies for breaches (DHIVYALAKSHMI, 2023).
They also play a vital role in risk management, fostering trust, and maintaining professional
relationships through transparency and commitment.
6
Smith, H., & Fotheringham, K. (2020). Artificial intelligence in clinical decision-making:
rethinking liability. Medical Law International, 20(2), 131-154.
The article examines the legal implications of AI in clinical decision-making in England
and Wales. The authors question clinicians’ current practice bearing sole liability for AI system
defects, proposing a more equitable shared responsibility between clinicians and software
development companies (Smith & Fotheringham, 2020). Their alternative approach involves
“risk pooling” through insurance to facilitate quicker compensation for patients harmed by AI.
Kim, J. J. (2022). Personal care aides as household employees and independent contractors:
Estimating the size and job characteristics of the workforce. Innovation in Aging, 6(1),
igab049.
The article investigates personal care aides (PCAs) in the home- and community-based
service industry. Approximately a quarter of PCAs are household employees or independent
contractors, varying by state (Kim, 2022). Those in these roles exhibit longer work hours and
higher earnings than their agency counterparts.
Soener, M., & Nau, M. (2019). Citadels of privilege: The rise of LLCs, LPs and the
perpetuation of elite power in America. Economy and Society, 48(3), 399-425.
The article explores the surge in limited liability companies (LLCs) and limited
partnerships (LPs) in the United States since the 1990s (Soener & Nau, 2019). These entities,
offering benefits similar to corporations but with reduced public accountability and lower taxes,
serve as tools for elites to evade
7
References
Dhivyalakshmi, T. (2023). A Brief Introduction to Contract and Its Types
Finnegan, D. L. (2019). Private Ordering, Dynamic Merchant Tradition, and the Uniform
Commercial Code. Research Handbook on International Commercial Contracts, 181-195.
Kim, J. J. (2022). Personal care aides as household employees and independent contractors:
Estimating the size and job characteristics of the workforce. Innovation in Aging, 6(1),
igab049.
Smith, H., & Fotheringham, K. (2020). Artificial intelligence in clinical decision-making:
rethinking liability. Medical Law International, 20(2), 131-154.
Soener, M., & Nau, M. (2019). Citadels of privilege: The rise of LLCs, LPs and the perpetuation
of elite power in America. Economy and Society, 48(3), 399-425.