After receiving excellent legal advice from you regarding contracts and legal structure, your brother’s lemonade stand business has become so successful that Peter’s lemon tree is not nearly adequate to supply all of the lemonade stands. This is good news, but also brings up a variety of legal issues now that additional labor and funds may be necessary to secure a wider supply of lemons. While the lemonade stand, business is highly successful, your brother still cannot afford an attorney. And because of the excellent legal advice you have been giving him he has come back for more advice on the legal challenges involved in securing a new supply of lemons and expanding the business. Using references to the background materials including: DuBoff (2004), and the Pearson tutorial, write a two to three page paper discussing the following legal issues involved in the efforts to increase the supply of lemons for your brother’s business. Make sure to cite at least one source from the required background materials for each of your three answers, and to use at least 2 total references in your answer: While your brother is the CEO of the company, Peter as Chief Operating Officer has been running many of the day to day operations such as supervising employees and overseeing production of lemonade. However, he has also engaging in other actions not listed in his job description such as negotiating the purchase of lemon sales from other kids in the neighborhood with lemon trees in their yards. Your brother has so far allowed Peter to engage in these actions but is becoming concerned. What kind of agency relationship does Peter currently have with your brother? What kind of agency relationship would you recommend? Peter’s idea for securing more lemons is to utilize the skills of his employees, who have become quite expert in climbing trees and using ladders in order to pick the largest and freshest lemons from the top of the trees. He wishes to hire more lemon pickers and find neighbors with lemon trees who want to make some extra money in exchange for allowing their employees to pick some fresh lemons. Your brother sees some wisdom in this approach but also wants to consider purchasing lemons directly from a local farmer even these lemons will be a little more expensive and not as fresh. From an employment law perspective, which approach would be preferable? Your brother wants to get a small loan to finance the purchase of a large batch of lemons and hire some new employees. He visits several banks, but the loan officers all laugh and says there is no way a bank will give a loan to an 18-year-old with a lemonade stand. Your brother presents detailed financial statements showing that his company has very good financial prospects, but still no bank will loan to him. You personally don’t want to lend him your own money because you want him to learn to survive in business on his own, so what other measures could you or your brother use to convince the bank to lend the money?

 

Agency relationship

 

Name of student

Course title

Tutor’s name

Date

 

Agency relationship

Abstract

Agency relationship is considered to be an arrangement between a principal and an agent. The arrangements is through legal appointment of an agent to act on behalf of the principal. The relationship is fiduciary and guided by avoidance of conflict of interest from the agent. A well drafted contract states terms and conditions of the relationship that the both parties have to follow. The principal assigns various task to the agent who carry’s them out diligently according to the contract.

The agent gives the principal’s interest priority putting forward their best skills and care. The relationship encourages duty of loyalty from the agent to achieve the principal’s goals. The agency relationship with peter is an independent contractor or express agency relationship. Peter has been running the lemonade business operations by supervising workers and ensuring their production of lemonade making him his own boss. Peter has made the owner’s interest as a priority making sure the lemonade is produced. Independ contractor relationship gives the agency liberty to carry out task they desire.

The owner who is the principle is not liable for injuries Peter will encounter, does not pay him social security taxes, there is no compensation policy for Peter and the principal does not impose employer’s rules on Peter. Peter’s engagement in tasks that are not assigned to him renders the principals legally responsible for the act of purchasing lemons from neighboring kids. This put the principal at risk because the kids are not authorized to sell the lemons (DuBoff, 2004).  

Employing peter will provide an employer-employee relationship. Through this relationship the principal will be liable for all operations in the business. The principal will ensure that he carries out the negotiations of buying the lemons through the acceptable legal way. An employment contract will facilitate the relationship by spelling out employment terms. The principal will be paying Peter a salary and he will only act on duties assigned to him.

Employment law

Employment law is also known as labor law that provides mediation on relationships between the employees and the employer. These laws include both federal and state laws whose main aim is protecting employee’s rights. Peter’s idea is best suit for the company’s growth by the employer consideration the employee’s idea. This is because having fresh lemons produce fresh lemonade that will attract more customers hence more income. Sourcing for the lemons from different neighbors promotes diversity which increase the production of lemonade that is of high quality. Pickers have a chance of choosing preferred lemon that are healthy.

Cost of purchase is minimized due to low prices of the neighbor’s lemons. Business relations are enhanced with neighbors promoting a healthy supply. Sourcing from the local farm prevents diversity and low quality lemons may be picked due to lack of advancement in farming. The lemons nature of not being fresh drives away customers hence low income returns (Pearson 2004)

Financial assistance

Convincing financial providers can pose to be a challenge especially when the business is a small entity that is run by a young person. The providers do not have trust in the owner due to lack of experience and fear him defaulting in case the business collapses. Engaging with the bank as a business partner can increases the chances of getting the loan. The partnership entails that the bank will offer a certain amount of money that will represent their partial ownership of the business.

With this the bank monitors the business operations and the owner has zero chances of defaulting. Providing the bank with a well-illustrated business plan promotes interest and involvement. The bank officers get a chance to understand about the business operations more, provide advice where need be and have an overview of what to expect. A certain level of confidence in the business is instill and the bank provides the money needed and knows when to expect full payment. On clearing the loan, the bank is no longer engaged in the business operation but business ties are maintained for use in later days.

References

 

(2014) Pearson Learning Solutions. New York, NY- http://www.pearsoncustom.com/mct-comprehensive/asset.php?isbn =1269879944&id=11987

DuBoff, L. D. (2004). The Law (in Plain English) for Small Business. SphinxLegal.