The Legal Structure of the Business - Term Paper Example

 «The Legal Structure of the Business» Sole proprietorship is among the various forms of business organizations in which sole proprietor is responsible for all the activities in the business. Sole proprietorship is comprehensible to set up and operate. The legal formalities required are few. This enables the sole traders to start the business quickly and easily. This form of business requires little capital to start as compared to other forms of businesses. The little capital requirement makes sole proprietorship the most affordable business, hence its popularity. The sole trader has full control over the assets of the business and has absolute powers of making key decisions concerning the business. The proprietor is motivated since the trader enjoys all the gains in the business. The sole trader is able to keep secrets of the business regarding vital business information. The owner can make decisions as quickly as possible; hence, opportunities are not lost due to delays in decision-making. The owner can easily change the legal structure of the business in case of growth or even dissolve the business. Furthermore, this form of business is not subject to the payments of corporate tax. This would increase the profits due to reduced payments. However, sole proprietorship involves unlimited liability to the owner. In case, the business has exceeding debts, personal property utilized in settling the liability. The proprietor is responsible for running of business throughout thus, can experience fatigue due to boredom and monotony. Hence, the proprietor can avoid partnership to maintain control. Eva can use of ploughed back profits and borrowings from financial institutions to expand the capital. Question 2 Don can set aside the contract under the following defenses against the formation of contracts: Duress and undue influence. In jurisprudence, duress is referred to as a condition where an individual performs an act due to violence, a threat or any other pressure against the person in question. Duress is the pressure that is exerted on a person to induce him to perform an act that he could not otherwise perform under ordinary situation. Similarly, coercion used lures a one to act or not in a manner that he would not or act. Duress constitutes going against a person’s will, possibility of legal defense and justification of the commission of an unlawful act Undue influence in jurisprudence is an equitable doctrine where one party takes advantage of its positional power over the other, making free will bargaining impossible. Don can seek presumed undue influence since their relationship with Evan may fall in the class of relationships, which as a matter of law may facilitate the presumption of undue influence. Failure of this is not the end. The actual undue influence allows an innocent party to set aside the contract, in the absence of presumed undue influence provided there is evidence that the power was imbalanced when signing the contract. Don can seek rescission as a remedy. Rescission is an unbiased remedy that unwinds the contract between the parties. Rescission ensures that the parties to a contract restore their positions as was before they entered the contract. A person seeking rescission must therefore, agree to return all the benefits that he or she has received from the contract. Question 3 The furniture in this case is not treated as part of the sales. This is pursuant to the exclusion clause. An exclusion clause is an expression in a contract that seeks to restrict the rights of the parties involved to the contract. The exclusion clause can only operate if the terms are incorporated in the contract by signature, as in this case, either by notice or by previous course of dealings. If the clause, in written on the document that has been signed by all the parties, then the clause is considered part and parcel of the contract. Incorporation by notice demands that an exclusion clause shall have been incorporated in the contract if the party relying on it had taken reasonable procedures to create awareness of the issue to the other party. Finally, incorporation by previous course of dealings requires that terms of the contract including exclusion clauses become part of the contract if the previous dealings were regular and consistent. Actually, the seller promised to sell the warehouse to the buyer, the furniture inclusive. The seller did not read the stipulations of the contract before committing to it. It is impractical that he had not read the clause. The fact that he signed the contract makes him bound to it. The exclusive clause operates hence he is subject to the specifications of the contract, inclusive of the clause. The exclusion clause therefore, forms part of the contract, and the furniture as provided, is not part of the contract. Question 4 The court is capable of awarding specific performance as an equitable remedy in the course of exercising its equity powers. It is applied in contracts of land and unique personal property under which monetary damages are considered inadequate. This action must be taken after the court has determined the validity of the contract between the parties. The case between General Equity Corporation and Nancy involves payment for an artistic work that is to be rendered on a personal basis. As a general principle, a breach of contract involving personal services is always subject to damages by law, except when the service is unique. However, as a rule equity cannot grant specific performance, which it cannot supervise. In most instances, specific performance is denied if the court finds it extremely difficult to monitor the specific task that the defendant performs. Therefore, the court ought to determine the degree of ease of supervising the specific task. It is also essential that the court assess the conduct of the plaintiff before granting or denying specific performance. In case the plaintiff has not acted in legitimate faith, then court can deny him the relief. The case between Ideal and General involves the sale of a building that forms part of land by law. In this case, land is unique and therefore, monetary damages are inadequate to compensate the plaintiff. The court may consider the extent of vagueness in the enforcement of the contract since vague contracts are unenforceable. The court may also determine the span and frequency of supervision that is required in the performance, as constant supervision may make the whole process unenforceable. Questions 5 That the new statute did not meet the thresh-hold of the Statutory Standards of Care as far as negligence per se is concerned. Negligence per se as a doctrine allows for a criminal statute to be used under certain situations in order to set standards of care in a case of negligence. After proper examination by the court, a more specific legislative standard operates as opposed to the general standards. In a case, of negligence, adoption of a statute as a standard of care demands that a judge must first determine if the statute has the kind of guidelines that approve its use by a civil court. In addition, the judge has to examine statute to determine if at all, the statute clearly defines the type of harm that the plaintiff has suffered and whether the plaintiff is among the group of individuals to whom the statute guarantees protection. The new statute lacks propriety of adoption. For instance, the intention of the statute, as quoted, was to protect the minors against harm. The type of the harm was not stated in clear terms hence it is not easy to determine the type of harm. The term “might” used in the statute is an explicit show that the actual harm was not definite. Further, the scope of the protected class was uncertain in the sense that minors constitute a wider range of ages of between zero to eighteen years. Therefore, the measure of harm could vary. The application of licensing of the statute is also appropriate though many courts do reject it on grounds that the absence of license by itself, does not prove lack of due care. Works Cited Ibbetson, David J. A Historical Introduction to the Law of Obligations. New York: Oxford Univ. Press, 2001 Read More