Final Paper: Essential Elements of an Enforceable Contract

Acme Fireworks Framework
Name
Institution
Acme Fireworks Framework
In recent days, Acme Fireworks has entered in a deal with several large businesses that want the company to supply them with large repeat orders. For this to be possible, there is need to conduct an assessment to determine whether Acme Fireworks is capable of servicing those orders and what needs to be done in order to fulfill such big numbers. The word of mouth agreement arrived at between the owner and the retailers needs to be appraised to establish whether it fits the category of an enforceable agreement. Meeting these new orders means that the overall workload that the company has to deal with will go high and this will demand that the organization hires new staff to deal with the extra workload. Due to the retail presence, the company may also be forced to alter its business entity status to minimize the company liability. At the present, the company only manufactures and sells the fireworks but it does not have to set them up. Even as the company hires new staff, it will need to come up with a formula that allows it to adjust once the volume goes down. This paper will analyze these issues to determine if there is an existent contract as well as what will be the most excellent solutions to meet the new workload as well as all the emerging liabilities.
The proprietor of Acme Fireworks has gotten different proposals by big retailers who want to start purchasing the company’s products. He has agreed to this proposal and indicated that he is capable of making the deliveries in good time. The two parties have arrived at an agreement that they are content with the agreement including the price. The most important thing now is to determine if this agreement captures the basic tenets of a contract that are set out in law (Zafar, 2013).
For a contract to be binding, it has to have five components namely the offer, acceptance, consideration, legality and capacity. The talk that the owner had with the large retailers is the starting point of the contract. The retailers approached him with the promise of buying his fireworks in large quantities. The retailers even went ahead to strike a deal on the total cost of the fireworks per unit and this is considered to be the consideration for the contract. The owner indicated that he had the capacity to service their recurring orders which is an indication of acceptance of the offer. Given that the selling of the fireworks to these new customers is a legal transaction and it is clear that the two parties have capacity (Zafar, 2013). From every indication, this is a binding contract but is nullified by the UCC statute of frauds which indicates that all contracts between traders that exceed $500 needs to be put down in writing. The statute of frauds makes some exemptions to this rule especially on the area of manufactured products or the admission to a court of law on the existence of an oral contract. The other exemption is in the case of partially accomplished contracts as well as the case where there is a memo detailing the absence of a written contract. Considering that fireworks are specially manufactured goods and not widespread, this would be termed as a legally binding contract (Blount Law, 2015). Since the availability of an enforceable contract has been established, the next step in the process is to determine the correct business entity for Acme Fireworks.
Since its establishment, the owner of Acme Fireworks has run his business as a sole proprietorship. This type of business has numerous downsides since it makes no distinction between the business and the owner. The two are considered as one. The owner has been lucky that none of his employees has been injured in the process of setting up the fireworks. If handled in the wrong manner, fireworks can be hazardous. If any injuries had occurred as the employees set up the fireworks, the owner could have borne the damages that would have been awarded to the injured employees. Under the law, these penalties are attached to the owner’s assets. It is also fortunate that no consumer has been injured by the fireworks as the penalties awarded to them would have been borne by the owner. Due to the possible expansion of operations, the best business entity for Acme Fireworks is a Limited Liability Company or a Corporation. A Limited Liability Company gives the owner the chance to run in a similar manner as a sole proprietorship yet he would be a different entity with the business. Under this type of business, the owner can even bring on board partners something that would spread the risk to other individuals. If he chooses the option of a Corporation, there would be shareholders that would make contributions to support the organization. Although there are higher costs in Limited Liability as well as more responsibilities, the owner’s liability is highly diversified and totally abolished in the case of the Corporation something that gives the owner more protection as opposed to the current situation. Considering the current case, the company needs to form a Corporation and make sure that they hold an annual meeting as required by the law that guides corporations. With shareholders on board, the corporation could offer much needed support to the company in the event that there is a reduction in the orders thus making it hard to sustain the staff (The Company Corporation, 2016).
In his current state, it is impossible for the owner of Acme Fireworks to fill all the orders that would come from the retailers. This calls for outside help from other quarters. One way through which he can get this help is bringing onboard superfluous agents to aid in the manufacturing of the fireworks. This would be ideal since these agents would not be liable for any compensation in case of harm but considering the highly risky business of manufacturing fireworks, it would be ideal for him to seek for the services of highly skilled and dependable staff (Rogers, 2012).
Since Acme is already assured of the increase in productivity, there will definitely be need to bring onboard more laborers to fill the increased workload. The major concern of the owner is the future when the work will be minimal. One way of dealing with this scenario is to seek for the services of temporary staff, full time workers as well as contractors. However, the hazard that is involved in this type of work would make it appropriate for him to hire full time employees who are highly skilled. The nature of the job calls for faithfulness and reliability among the employees. These employees should also inject professionalism in their work. The level of hazard that is involved in the work calls for the employees that have a clear understanding of the need for carefulness in their job performance. The independent contractor is not held to Acme Fireworks and can come and go as they wish. The independent contractor is supposed to monitor the outcome of the project as well...