Business Law Assignment: Contractual Elements and Business Entities

This business law assignment examines the legal framework for a contract involving Acme Fireworks and large retailers, focusing on the Uniform Commercial Code (UCC) versus Common Law. The report assesses the essential elements of an enforceable contract, including offer, acceptance, capacity, consideration, and legal binding, while also addressing the Statute of Frauds. The assignment further explores the implications of personal liability, particularly for the owner of a sole proprietorship, and recommends a shift to a Limited Liability Corporation (LLC) to mitigate risks. It concludes by emphasizing the importance of employee security and responsibility in the context of the dangerous nature of fireworks manufacturing, offering a comprehensive analysis to aid the company in its business operations.

Running head: BUSINESS LAW ASSIGNMENT
Business Law Assignment
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction......................................................................................................................................2
Thesis Statement..............................................................................................................................2
Legal framework of the contract......................................................................................................2
Essential elements of an enforceable contract.................................................................................3
Personal Liability.............................................................................................................................4
Types of Business entities...............................................................................................................4
Conclusion.......................................................................................................................................5
Reference list...................................................................................................................................6

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Introduction
Thesis Statement
Acme fireworks have drawn attraction of some huge retailers who desire to place huge
persistent orders. It is important to assess if Ace Fireworks can fulfill such orders what is
essential for the company to fulfill such huge orders. The verbal agreement between the owner
and the retailers must be assessed to determine if it includes essential elements of an enforceable
contract. The impending increased work and the existence of large trade may require the
company to change the status of the business entity for reducing the company liability. There
may be a need to increase and diversify the employees to enable the company undertake the high
amount of work. These areas shall be analyzed for determining whether Acme Fireworks have
formed a contract and what solutions shall be appropriate to fulfill the new volume of work and
the new possible liabilities.
Legal framework of the contract
In order to address the concern relating to the legal framework for the contract, the
contract of the owner should be governed by Uniform Commercial Code (UCC) rather than by
Common Law due to several reasons. Firstly, the principles of contract law in general are
comprehended uniformly and are applicable all over the USA. The UCC and Common Law both
govern the contractual principles (Andrews, 2015). Secondly, common law often leads to
rejections in case any changes are made in a contract in terms of counter offers, quantities, etc.
Thirdly, common law does not permit revocation o option contracts. Under Common Law, the
judges make law through their decisions in individual cases. Fourthly, under the UCC, minor

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changes in contract do not have any adverse impact on the original contract and neither the
contract is cancelled. Further, under UCC, quantity is given more emphasis and offers made by
firms are binding provided the deal is in writing under UCC (Burnham, 2016).
Essential elements of an enforceable contract
A contract is enforceable in the court of law if it includes all the essential elements of a
valid contract. The essential elements of a contract include offer, acceptance, capacity,
consideration and legal binding. One party known as the offeror makes an offer to another party
called the offeree who accepts such offer. However, the other elements must be present as well.
The Acme Fireworks owner had discussion with the large retailers at the time of commencement
of the contract. They offered the owners to buy his fireworks for sell and the retailers discussed
the price of the fireworks per unit, which shall form consideration for the contract.
The owner stated that he would complete the orders offered by the retailers, which
amounts to acceptance of such offer. Further, since the selling f fireworks to the retailers
amounts to a legal transactions, it can be said that both the parties have legal capacity to form a
contract. This signifies that the contract formed is enforceable except that under the UCC Statute
of Frauds, contracts between merchants that exceed $500.00 or more must be made in writing
(Ramesh, Ghicu & Putman, 2016). However, there are certain exceptions applicable to the
statute of frauds towards specially manufactured goods, partially performed contracts,
admissions made in pleadings with respect to the existence of an oral contract, etc. Since Acme
Fireworks are specially manufactured goods, the contract shall be enforceable in court.

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Personal Liability
Since at present, Acme Fireworks is a sole proprietorship business, any injury caused to
any spectator shall be deemed the responsibility of the owner. His personal assets are not secured
and can be used to compensate for the injuries sustained by the spectators. The owners would be
responsible for the injuries sustained by his employees as well.
Types of Business entities
Since different types of business entities holds the owner liable differently, it will be
determined whether which business entity would be appropriate for Acme fireworks. Sole
proprietorship is the most common, simple form of business entities under which a business can
operate but it is not a legal entity, and the person owning the business is responsible for its debts.
In partnership, both partners shall be responsible equally for the business debts. In a
limited partnership, one partner shall be liable and the other partner shall lose their investments.
In, Limited Liability Corporation (LLC), the business shall be responsible for its own debts but
the people making up the LLC shall not be responsible which implies, that the business assets
can be liquidated but not personal assets of the owners (Smits, 2017).
Therefore, for Acme Fireworks, the owner must change its business from sole
proprietorship to a LLC as the products sold by the owner have potential to cause injuries to the
consumers. As corporation, if the products injure a consumer, the company shall be responsible
but the owner would not be affected.

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Conclusion
The hiring of employees will establish loyalty and reliability but since the manufacturing
of fireworks is dangerous, the owner must ensure that the employees have sense of security and
are highly responsible while dealing with the products. Thus, the evaluation shall enable the
company to determine the possibilities that would enable the company to enhance its business
operations successfully.

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Reference list
Andrews, N. (2015). Contract law. Cambridge University Press.
Burnham, W. (2016). Introduction to the law and legal system of the United States. West
Academic Publishing.
Mai, N. K. (2016). Legal Remedies for Non-conformity of Goods under CISG, UCC and UK
Law.
Ramesh, A., Ghicu, P., & Putman, C. (2016). CISG v. UCC: Key distinctions and
applications. The Business & Management Review, 7(5), 459.
Smits, J. M. (Ed.). (2017). Contract law: a comparative introduction. Edward Elgar Publishing.