Acme Fireworks desires to formulate a comprehensive business plan that will increase and expand its contracts. The expansion will allow Acme Fireworks to accept new business from companies requesting its products and in turn, propel Acme Fireworks into new business ventures. As the manager of Acme Fireworks, I will facilitate changing the current entity of sole proprietorship, the liabilities, and our contracts while adding new employees to the company. Although adding new employees can give the impression that a company is in good health, a company should also understand the risks and greater potential for personal lawsuits that this expansion can bring.
Contract Type and Enforceability
When most people think about fireworks they think about the fourth of July, weddings, and amusement parks. We think about being entertained. Just like all other industries, companies in the entertainment industry need the proper business structure in order to produce efficiently, work responsibly and survive in socioeconomic conditions. One part of the overall business structure needed is a contract between Acme Fireworks and the large businesses inquiring about its services. Because firework companies normally conduct business with other companies and organizations nationally, the contracts developed between Acme Fireworks and the other companies will be governed by the Uniform Commercial Code (UCC). “The Uniform Commercial Code (UCC) to unify state laws affecting commerce into a single code that all states could adopt to make interstate commerce easier and more efficient,” (Rogers, 2012). It is also the overriding factor when compared to common law because the UCC rules are exceptions to the general rule of the common law. Sales, taxation and formation laws differ from state to state in Common Law.
In order to form a contract, two parties do not have to sit down and sign a piece of paper outlining the details. In fact, although risky, verbal contracts are enforced just as much as hard contracts (SITE). The most important piece of a verbal contract is mutual agreement. One cannot say that they entered into a verbal contract with another while threatening their life. The now victim will not agree mutually, it will be coerced. The five essential elements of a contract are an offer, acceptance, consideration, legality, and capacity (Rodgers, 2012). The owner advised that he made an offer and the companies accepted it. This lead to a discussion about display orders the labor needed to get the job done efficiently and they were all in good mental states. They are now under an enforceable contract.