Business Law Case Studies: Application of Legal Principles and Rules

This assignment presents a series of business law case studies, each addressing distinct legal issues. The first scenario examines negligence in the context of an employee's actions causing damages. The second analyzes contract and agency law, specifically focusing on the extent of an agent's authority and potential misrepresentation. The third delves into the distinction between an agent and an independent contractor. The fourth explores employer liability for employee actions. Finally, the fifth discusses partnership liability. Each scenario provides a legal analysis, applying relevant laws and concluding with a determination of liability. Desklib provides access to similar solved assignments and resources for students.

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

1BUSINESS LAW ASSIGNMENT
Situation 1
Issue
Beth during her course of employment stopped to deposit her paycheck. During this time
she had parked her truck but had not applied the parking breaks. As a result the truck rolled
down and damaged a whole foods outlet leading to injuries to people and monetary losses. The
issue is if this amounted to negligence.
Law
The tort of Negligence is based on 4 essentials, namely1:
1. Duty;
2. Breach of duty;
3. Injury caused by breach of duty;
4. Consequent damages.
Application
Beth had a duty to ensure that the parked car did not lead to any damages while left
unattended. This duty was breached when she negligently omitted to apply the parking breaks
when leaving the car unattended. This breach resulted in injuries of three people and monetary
losses for the Whole Foods outlet.
Conclusion
Beth’s act of not applying the parking breaks amounted to negligence and she would be liable to
pay damages.
1 Luntz, Harold, et al. Torts: cases and commentary. LexisNexis Butterworths, 2017.

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Situation 2
Issue
Helena’s contract of agency with Sarah was concluded to the extent of obtaining 3 bids
for the repairs. Helena contracted a garage to initiate repairs and the repairs were carried out.
These repairs exceeded the quoted $350 and the same was also agreed upon based on the
representation that Helen had the authority to authorize the same.
Law
A concluded contract requires the agreement of both parties on the same thing in the
same sense. This means that all parties should have a meeting of the minds as far as the subject
of the contract is concerned2.
Fraudulent Misrepresentation refers to an untrue statement that obtains the other party’s
consent to a contract. In case of fraudulent misrepresentation the contract is voidable at the
option of the party who has been so represented3.
Breach of contract refers to an omission or non-observance of the terms of the contract by
either or both parties. Breaches result in damages4.
Application
The hiring of the contractor to execute repairs to the motorcycle went beyond the terms
of the contract between Helen and Sarah. Thus, Helen was not acting as Sarah’s agent when she
authorized the repairs. Thus, this excludes Sarah from being liable to pay the bill.
2 Fried, Charles. Contract as promise: A theory of contractual obligation. Oxford University Press, USA, 2015.
3 Schroeter, Ulrich G. "Defining the Borders of Uniform International Contract Law: The CISG and Remedies for
Innocent, Negligent, or Fraudulent Misrepresentation." Vill. L. Rev. 58 (2013): 553.
4 Johnson, Jeff S., and Ravipreet S. Sohi. "Understanding and resolving major contractual breaches in buyer–seller
relationships: a grounded theory approach." Journal of the Academy of Marketing Science 44.2 (2016): 185-205.

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The contract was based on a fraudulent misrepresentation and thus would be voidable at
the option of the garage which executed the repairs. However, the garage had breached its
contractual duty to complete the repairs within the quoted amount and thus would be liable to
pay damages if it did enforce the contract.
Conclusion
If the garage did choose to enforce the contract, Helen would ideally be liable to pay the
bill. However, owing to the breach of contractual terms Helen would be excluded from liability
as the contact was not performed and would be entitled to damages for breach of contract.
Scenario 3
Issue
Brent after his grandmother’s death removed everything he required from the property
and then hired a liquidation company (LC) to sell the house and its remaining contents. The
company employed various ways in which the sale was executed (which included the hosting of
an auction). Brent subsequently refused to pay the charges for the additional measures employed.
The issue here is that if the LC acted as an agent of Brent or an independent contractor.
Law
An independent contractor is different from an agent in various ways. An independent
contractor has complete control over the ways in which the work is undertaken. Moreover it is
also entitled to engage into further contracts to ensure completion of the work. An agent is the

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representative of his employer and the course of employment is controlled by the instructions of
the employer (principal)5.
Another important distinction is that independent contractors are business owners
themselves (providing the particular service being the business here) and agents are merely
employees. Thus, contractors are paid remuneration based on the contract agreed upon while
employees are paid salaries based on their stipulated periods of employment6.
Application
In the given scenario, Brent had hired the LC to execute sales of the rest of property.
Here, he showed no interest in the methods employed for the sale. The LC was charged with all
responsibilities related to the sale of the properties. Thus, it may be inferred that they had the
independence to employ any means necessary to complete the sale of the remaining properties.
Additionally, the LC would be paid at the end of the sale based on the contractual
agreement and this cannot be construed as deriving a salary from Brent. Thus, the LC was not
acting as an employee of Brent but merely providing a service to him.
Conclusion
The LC was acting as an independent contractor and had the right to employ any means
necessary to provide the service.
5 Clarke, Robert, and Thomas Lancaster. "Commercial aspects of contract cheating." Proceedings of the 18th ACM
conference on Innovation and technology in computer science education. ACM, 2013.
6 McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK), 2014.

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Scenario 4
Issue
Dwight was employed at D-M Inc and was charged with the acquiring a quotation for
1000 reams of paper. Once quoted, he was charged with the responsibility of making such an
order. The company supplying the paper (paper, paper, paper! Inc) assumed Dwight personally
placed the order and sent it naming him as the ordering entity. The issue here is if Dwight would
be personally liable for the purchase amount.
Law
An employee working within the course of employment and instructions of his employer
is acting as an agent of the employer. In such a scenario the employer is the principal and the
employee is the agent. A principal is liable for the acts of his agents if done within the course of
employment7.
Application
Dwight was working in his capacity of an employee of D-M Inc when he was placing the
order. Thus this was within the course of employment. Even if paper, paper, paper! Does enforce
the contract the principal would be liable to pay the amount.
Conclusion
D-M Inc would be liable to pay the purchase amount as Dwight was acting on their
behalf in the entire transaction.
7 Kistruck, Geoffrey M., et al. "Mitigating principal-agent problems in base-of-the-pyramid markets: An identity
spillover perspective." Academy of Management Journal 56.3 (2013): 659-682.

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Scenario 5
Issue
Bill and Ted Company (BTC) is a partnership firm which had entered into a construction
contract with ABC corp. The final bill to this contract remained party paid. The issue here is if
Bill and Ted (the partners) can be personally sued for the remaining amount.
Law
Separate legal entity is a concept which given a separate legal identity to corporations.
This makes the liability of the original owners limited and they cannot be legally pursued for the
acts of the corporation. A partnership firm however is not a separate legal entity and its partners
are assumed to be responsible for the acts of the firm8. Unless it is a limited liability partnership,
the partners would be personally liable for the obligations of the firm.
Application
BTC is a partnership firm and is not a corporation. Thus the partners are presumed to be
liable for all acts of the firms. The unpaid amount maybe rightfully recovered from the partners
Bill and Ted.
Conclusion
Bill and Ted maybe pursued legally before other remedies against BTC are exhausted. In
such a situation it would be more prudent for BTC to be incorporated into a company as then the
owners cannot be held liable.
8 Allen, William T. "Our schizophrenic conception of the business corporation." Corporate Governance. Gower,
2017. 79-99.

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Bibliography
Allen, William T. "Our schizophrenic conception of the business corporation." Corporate
Governance. Gower, 2017. 79-99.
Clarke, Robert, and Thomas Lancaster. "Commercial aspects of contract cheating." Proceedings
of the 18th ACM conference on Innovation and technology in computer science education. ACM,
2013.
Fried, Charles. Contract as promise: A theory of contractual obligation. Oxford University
Press, USA, 2015.
Johnson, Jeff S., and Ravipreet S. Sohi. "Understanding and resolving major contractual
breaches in buyer–seller relationships: a grounded theory approach." Journal of the Academy of
Marketing Science 44.2 (2016): 185-205.
Kistruck, Geoffrey M., et al. "Mitigating principal-agent problems in base-of-the-pyramid
markets: An identity spillover perspective." Academy of Management Journal 56.3 (2013): 659-
682.
Luntz, Harold, et al. Torts: cases and commentary. LexisNexis Butterworths, 2017.
McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK),
2014
Schroeter, Ulrich G. "Defining the Borders of Uniform International Contract Law: The CISG
and Remedies for Innocent, Negligent, or Fraudulent Misrepresentation." Vill. L. Rev. 58 (2013):
553.