Addum, Upp, & Paymee
Post 1 (GeneleeMcLawhorn)
According to the text, written and oral agreements are equally enforceable. (p.107) There are factors for these agreements to be a legal. There are six elements that need to be present which are, a legal offer, legal acceptance, consideration, genuine assent, competent parties, and a legal object. Maurice's boss at Addum, Upp, & Paymee stated, "If you stay with us, I promise that next year you will receive a promotion with a 50% raise, and a 5-year contract." This is a legal contract because it does not contain any illegal objects and serious defect that it is fully enforceable.
Additionally there are 3 requirements that need to be present in a legal offer. (p. 110) The three that need to be present are, the offer must show objective intent to enter into the contract, the offer must be define with regard to quantity and price, and must be communicated directly to the party. (p. 110) This agreement was met by all three requirements, which means this is a legal offer.
Legal acceptance must have three elements that need to be present.
1. Intent to accept must be shown by offeree.
2. Intent communicated by proper means.
3. Intent must satisfy the terms of offer.
When Maurice decided to stay at the company show legal acceptance of the offer.
Genuine Assent must be free of fraud, duress, undue influence, and mutual mistake. (p. 117) All parties (Maurice and boss) were free of all elements that disqualifies genuine assent.
Both parties must be Competent parties when conducting this contract. To be considered competent, parties must not be a minor, insane, or intoxicated. (p. 120 & 121) Maurice and his boss therefore are considered competent parties.
The last element that needs to be present is a legal object. This means that the subject matter that is being agreed upon must be lawful. (p. 121) The subject is the matter of employment and does not bear any illegal activity making this offer a legal object.
Looking at the oral contract that was made between both parties shows this is a legal and enforceable contract, which all elements are present. Yet there are other elements that need to be further investigated. In most states they have established there are certain contracts that must be in writing. (p. 123) The four types of contracts that must be written are contracts that involve the "interest in land," contracts to pay a debt to another, contract to be performed over a year, and sale of goods that are valued over $500. (p. 123 & 124)
The terms that Maurice and his boss agreed on was if Maurice stayed with the company, the next following year Maurice would receive a promotion with a 50% raise, and a 5-year contract." Maurice may have displayed the required six elements to be present, which make a contract legal and enforceable. The contract that was made falls into one of the categories that are required in most states to be written up. Therefore this contract is not enforceable.
Post 2 (Elizabeth Mckenzie)
Maurice cannot legally enforce his boss's promise. Maurice did legally accept the verbal contract but the verbal contract is not valid for a few reasons. Maurice fall under the preexisting duty rule (Kubasek, Brennan & Browne, 2015, pg 116) and he also verbally agreed to something that would come in effect under a written contract.
According to The Private Movie Company, Inc. V. Pamela Lee Anderson et al (Kubasek, Brennan & Browne, 2015, pg 114) justice Horowitz ruled that 'When parties orally or in writing that the terms of a proposed contract are to be reduced to writing and signed by them before it is to be effective, there is no binding agreement until written contract is signed. The 5-year contract (a deal reduced to writing and signed) will have to be signed and at the one year mark can then be signed and therefore re-negotiated. Since the agreement that is come to by Maurice staying in the company is the oral agreement and the 5-year contract is defined as I did above then Maurice will not win this case.
Also, since Maurice already worked at Addum, Upp and Paymee then he has Pre-existing Duty (a current contract with Addum, Upp and Paymee) and whatever is agreed upon is then just a bonus agreement. (Kubasek, Brennan & Browne, 2015, pg 116)
We also don't have enough information to know if the contract was agreed to with in 30 days. If it wasn't then the contact is terminated anyway due to lapse of time (Kubasek, Brennan & Browne, 2015, pg 112). Along with that there is the long stretch saying that the contract was terminated by Revocation of the offeror. The Offeror could imply that Maurice cannot adequately show acceptance of the offer until the year has passed and he is still at the company. Then that would means the offer can be revoked because the offeree has yet to accept.
Reference
Pearson custom resources, AMBA 610. (2015) Boston, MA: Pearson Learning Solutions. - Kubasek, N., Brennan, B., Browne, N., (2015). The Legal Environment of Business: A Critical Thinking Approach (7th ed.) Upper Saddle River, NJ: Pearson Education, Inc.
Building the WAVE
Post 3
6 things that one should consider when choosing an organization form Kubasek, Brennan & Browne
1) Tax ramifications
2) Control Considerations
3) Potential Liability
4) Ease and Expense of formation and operations
5) Transferability
6) Projected life of the organization
From the information given it is safe to conclude that Control Considerations and Potential Liability are most important to Fleming. We know he doesn't want to manage the business but wants the ability to control decisions. He also doesn't want to potentially loose his savings due to potential liability.
Tax ramifications are not important unless he wants more investors. This will only be important if he cannot get enough investors to afford to appoint Scott Laddthe new CEO. Ease and Expense of formations and operations is only mildly important as well considering he has two years before he the product will come on line. He can take this time to write the proper charters if needed. Transferability doesn't seem to be an issue at all. The information seems to lead to the idea that Flemming wants to keep this company as his. There is no projected life of the organization but with a top CEO and the next best thing in the business if the business continues to stay in front of the technology in the industry then the life of the organization will be lasting so an unlimited lifetime would be desired.
For this I would choose a limited Liability company for Flemming. He will maintain management decisions and limited liability. The decision-making is on a majority rules, however, there is an operation agreement that can set who has voting rights and how the company is going to be ran. This will allow Flemming to maintain the amount of control he wants and wants to allow others. Flemming can also offer a tax break to the other five investors if he allows them to invest since LLC is not taxable.
Flemming must consider in which state he will create the LLC considering the states are not legally uniform. This may effect the operation agreement, which is extremely important. With an appropriate operation agreement adopted everything Flemming wants should be realized through a LLC. He will have to ensure that the LLC has tax professionals that can keep the company in good standing with the IRS.