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.
•
• 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.
Facts:
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.
Issue:
1. Determine if the contracts with the businesses will be governed by common law or the
Uniform Commercial Code (UCC), and explain why.
2. Analyze whether the owner formed a contract with the businesses, and apply the five
essential elements of an enforceable contract.
3. Explain the potential personal liability to Acme Fireworks if a spectator is injured by a
stray firework from a fireworks display.
4. Discuss the different employment types and relationships relevant to agency law, and
analyze the advantages and disadvantages of each type specific to Acme Fireworks.
5. Explain why Acme Fireworks should not operate as a sole proprietorship. Recommend a
new business entity, and provide rationale to support your recommendation.
Analysis:
Any sale which is classified as sale of goods for exchange is governed by Uniform
commercial Code. Under Uniform commercial Code, unless expressly specified fireworks can be
sold provided buyer has the permission to buy them. As decided in the STATE of Wisconsin,
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.
•
• 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.
Facts:
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.
Issue:
1. Determine if the contracts with the businesses will be governed by common law or the
Uniform Commercial Code (UCC), and explain why.
2. Analyze whether the owner formed a contract with the businesses, and apply the five
essential elements of an enforceable contract.
3. Explain the potential personal liability to Acme Fireworks if a spectator is injured by a
stray firework from a fireworks display.
4. Discuss the different employment types and relationships relevant to agency law, and
analyze the advantages and disadvantages of each type specific to Acme Fireworks.
5. Explain why Acme Fireworks should not operate as a sole proprietorship. Recommend a
new business entity, and provide rationale to support your recommendation.
Analysis:
Any sale which is classified as sale of goods for exchange is governed by Uniform
commercial Code. Under Uniform commercial Code, unless expressly specified fireworks can be
sold provided buyer has the permission to buy them. As decided in the STATE of Wisconsin,
