BUS 311: Week 5 Final Exam Paper.

BUS 311: Week 5 Final Paper. Introduction Acme Fireworks is a sole proprietorship that retails fireworks in addition to creating ground and aerial displays. Acme started two years ago in the owner’s garage and has grown to a company with 15 employees, which I currently manage. Recently, the owner came to an agreement and price for providing aerial displays with several different businesses. The majority of the cost for the fireworks display was for professional labor and liability insurance, as was communicated to the future clients. Subsequently, the owner is concerned about not being able to pay all of the new workers that Acme will require. The owner wants to determine the validity and jurisdiction of the contracts, Acme’s liability for accidental injuries to spectators, the implications of different employment types in regards to agency law, and if Acme should change its business entity. The five essential elements of enforceable contracts apply to the fireworks display contracts, and they are under the jurisdiction of common law. Considering that Acme is liable if a spectator is injured, it is prudent to hire experienced independent contractors and change Acme into an LLC to protect the owner’s personal assets. Five Essential Elements of an Enforceable Contract The formation of contracts occurred when the owner of Acme Fireworks met with the different businesses about creating fireworks displays on a regular basis. A contract can result from a verbal or a written agreement. According to Rogers (2012), an enforceable contract consists of five different components: offer, acceptance, consideration, legality, and capacity. The owner’s meeting with the various businesses met the five different elements, which created legally binding contracts. All of these contracts for fireworks displays began with an offer. Rogers (2012) states that an offer consists of a clear intent by both parties to enter into a contract with reasonable THE FUTURE OF ACME FIREWORKS 3 terms. The businesses approached Acme about regularly creating fireworks displays at specified locations and given dates. The owner indicated that Acme would create fireworks displays for these different businesses in exchange for a specified cost. The offer was the first step to meeting the criteria for an enforceable contract. The second element of an enforceable contract involves acceptance of the offer. Rogers (2012) says, “Acceptance of an offer is the clear manifestation of assent to the terms of the offer. For an acceptance to be valid, it must be (1) made by a person to whom the offer was made, (2) unequivocal, and (3) communicated to the offeror” (p.74). The businesses approached Acme about creating the fireworks displays. The offeror, Acme, made an offer and the other businesses, the offerees, accepted. There were no ambiguous terms to the offer. Finally, the offerees communicated that acceptance back to Acme. In these instances, every step of an offer occurred.