Case Study - Business operations
DEBIT OR CREDIT RELATIONS
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 Kelly (2012), 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 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?Answer the assignment questions directly.
Stay focused on the precise assignment questions. Don't go off on tangents or devote a lot of space to summarizing general background materials.
Make sure to use reliable and credible sources as your references. Articles published in established newspapers or business journals/magazines are preferred. If you find articles on the Internet, make sure they are from a credible source.