Legal Underpinnings of Business Law - Research Paper Example

The table below offers the liability of the others in different types of business entities for a breach of contract. However, if the terms of the agreement in the formation limit liability for an individual in case of a breach in contract, then it may mean all the parties will be held responsible regardless of the party who entered into a contract As a sole proprietor of Tinker’s Home Security Service, to avoid liability I will analyze the contract agreement closely and determine if in my breaching the contract, there was actual damages.

If there is an actual breach that results in loss, then to limit my liability, I would seek for a mediator or any other alternative resolution method. This will avoid the cost of damages I would incur if I were found liable by a court of law. For Tinker & Tailor’s Home Security Service (general partnership), I would limit my liability by critically examining my position I played in contract negotiation. Since general partnership agreement binds all the parties regardless of the person who entered the business contract, it means my liability will be reduced since the whole enterprise will be held liable for my actions.

I play innocence that I exercised all the prerogatives with pure intentions in mind. I would love to form a corporation since this is the best form a business (Cohen, 2005). The organizational form of the business will be that involving managers, employees and shareholders. As a shareholder, I will be in a position to reduce my liability since my role will be that of board meeting to deliberate of performance of the company. Similarly, I will not be responsible for losses incurred by the company, but only the managers will bear responsibility.

For Tinker & Tailor’s Home Security Service (LP), I would reduce my liability by ensuring that always no general partner sign business contracts on behalf of the