BUS 111: Business Law
Prof: Maria Fiorentino
January 19, 2015
Acme Fireworks is a company that sells fireworks but our main attractions are ground firework displays and large aerial displays. We have come a long way from working in the owner’s garage to a full facility with 15 employees. My job is to manage the facility and to make sure the owner’s expectations are met. Recently the owner has advised me that he received inquiries from other large corporations wanting us to produce several more firework displays on a regular basis.
Without consulting me, the owner agreed on the inquiries and a price was agreed upon. Cost included ...view middle of the document...
The UCC is a summary of traditional common law rules governing commercial transactions, which has been all or partially enacted into statutory law by the state legislatures (Rogers, S. 2012). In order for our company to operate, we must comply with the Uniform Commercial Code. The main reason why is because we will be conducting business outside our state as well as selling goods to large companies so all our ducks need to be in a row.
Now that we have determined the code to follow, now let’s take a look at the contact in question. Looking at the five elements of a contract, the first element is the offer. My boss has told me that he has received many inquiries from several large businesses regarding our products. One company in particular was the Wolf Creek golf resort. Every year they celebrate their anniversary and this year they decided on a firework ground display. Wolf Creek made an offer with Acme Fireworks for firework ground displays. In section 2-206, Offer and Acceptance in Formation of a Contact, it states, “an offer to make a contact shall be constructed as inviting acceptance in any manner and by any medium reasonable in the circumstance” (www.cornell.edu). The second element of a contract is acceptance. Well I already know that he accepted the offer because I’m exploring my options now.
I’m not sure yet how many contracts we are filling just yet but I do know that we will be expanding the facility to accommodate our demands. The third element of a contract is consideration. Once the offer is accepted and both parties attempt to bind the contract, the consideration is what’s actually exchanged in the agreement. According to the Judicial Education Center (2014), “Consideration- Something of value was promised in exchange for the specified action or no action. This can take the form of a significant expenditure of money or effort, a promise to perform some service, an agreement not to do something or reliance on the promise.” Consideration is the value that induces the parties to enter into the contract.
Let’s look at Wolf Creek again for example. In the consideration process, Wolf Creek will be receiving a service of fireworks and Acme Fireworks will be receiving payment for the product etc. The objective of the contract varies. Depending on the service requested, Acme Fireworks might have to set up and deliver a service which is sometimes contacted through a third party.
Mutuality of obligation means that both parties must have a clear understanding of their contract where both parties must agree upon the same objective. Full agreements on all contractual terms are the best practice and should be the norm. It is only when an essential term is left open for future negotiation that there is nothing more than an unenforceable agreement to agree (www.window.stat.tx.us.com). In the contract between Wolf Creek and Acme Fireworks, both companies have an obligation to each other.
Acme Fireworks must provide a service to Wolf...