Legal Problems Managing a Small Business Part II
Read the scenario and the questions that follow. Note that this scenario is a continuation of
the scenario from Week 3, Assignment 2.
Identify the legal issue(s) and apply legal concepts and possible
arguments for each question. Prepare a
solution for each question using laws, cases,
examples and/or other relevant materials. Identify potential ethical issues and propose
a solution for each issue. Support your
answers with information from the textbook and at least two outside scholarly
sources. By Tuesday, May 6, 2014,
prepare a 6 to 9 page paper that identifies the
legal issues and potential solutions and answers all
questions presented, supported by relevant legal authority. Properly cite all sources using APA format.
This assignment primarily requires application of the
concepts learned in Weeks 4 – 5; however, some concepts from Weeks 1 – 3 may
also be included.
Scenario
After being laid off from the construction firm where he has
worked for 20 years, Dad started his little handyman business. With a downturn in the economy, Dad found
that people repaired things instead of replacing them, so his services were
always in demand. Chad worked with his father
(Dad) in the afternoons and on the days he didn’t have
classes in construction management at the university, since his father needed
some help with the growing business.
By the time Chad graduated from college, the handyman
business employed three additional full-time workers and picked up a few day
laborers as needed.
Dad and Chad were carrying a large Jacuzzi tub through a
customer’s house when the homeowner’s dog jumped up on Dad, causing him to fall
and drop his end of the tub. Unable to
control the tub, Chad dropped his end of the tub and it went crashing into the
homeowner’s brand new $5,000,
65” Sony Smart - 3D television. Dad suffered a back injury
and was unable to work for six weeks.
The handyman business owns two work trucks and two vans,
each registered to the business and sporting the company name, phone number and
website. Joe, one of the full-time employees, often drives one of the vans home
at night in case he needs to take care of an emergency repair.
One night Joe stopped off at Mike’s Pub to have a couple of
beers before going home. On the way home, Joe ran a stop sign and hit Tracy
Jackson. Jackson’s car sustained $4,000
in damages and she missed two weeks of work recovering from her injuries. After
Joe was released from the
hospital one week later, he was arrested for DUI.
Third Bank loaned $50,000 to the handyman business. Chad,
Dad and their friend Bill agreed to be co-sureties for the loan. The handyman
business defaulted on the loan and Third Bank plans to sue Bill for payment of
the loan.
The handyman business agreed to install two new heating and
air conditioning units in a 3,000 sq. ft, two-story home. The parties agreed to
a price of $8,000 for the purchase and installation of the units. Because the
homeowner‘s wife just lost her job, Dad agreed to let the homeowner pay
for the units in installments of $1,500 a month. Two months
later, the homeowner files for bankruptcy. Dad demands payment of the remaining
amount due or threatens that he will repossess both heating and air
conditioning units.
Linh Pak was born in Vietnam in 1962 and recently became a
U.S. citizen. Linh speaks fluent English with a mild Vietnamese accent. Her
accent does not interfere with her ability to communicate with others. Linh
applied for a job with the handyman business; however she was not hired for
the position.
Assignment
Based on the different situations described in the scenario,
create a 6-to-9-page Microsoft Word document that includes the answers to the
following:
Is the business selected in Week 3 still the best type of
organization for Dad and Chad? If yes, provide reasons for your selection. If no, then select the appropriate type of
business organization for the handyman operation and provide support for your
selection.
Explain the liability of the homeowner, Chad, and Dad for
the Jacuzzi tub accident and the types of insurance the parties should have.
Explain whether the handyman business or Joe is responsible
for Jackson’s injuries. Assume each party maintains insurance coverage on their
vehicles. Which insurance company will be liable for payment of Jackson’s
claims?
Is Third Bank required to seek payment from the handyman
business before demanding payment from the co-sureties?
Can the bank collect the full amount of the loan from Bill?
If Bill pays the loan, does he have a right to contribution from Dad and Chad?
If so, how much can Bill recover from Dad and Chad?
What are the rights of each party- the homeowners and the
handyman business -to the heating and air conditioning units and payments owed
when the homeowner files bankruptcy?
On what grounds might Linh have a discrimination lawsuit
against the handyman business? Provide support for each ground selected and
then provide arguments that the handyman business may make to refute each
claim.
Consider any ethical concerns Dad and Chad may face related
to the topics covered.
Conclude your paper by providing suggestions for Dad and
Chad to help prevent future occurrences of these types of legal and ethical
problems.
Support your answers with appropriate research, reasoning,
cases, laws, and other relevant examples.
Submit the paper in APA format and properly cite sources on
a separate page using APA.
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