Business Contract


Ever wonder why some business have several factors to consider before setting them up? Well, it depends on the possible danger of that business not only to the employees and the owner but also other parties like customers who visit the business premise. In this case, fireworks have always been known to be dangerous, and their ultimate damage does not only occur when there is a significant injury, but even minor injuries can result to other damages besides the physical damage. The victim may end up in the hospital but later sue the business owner for negligence in their business. The business owner thus, therefore, considers employing skilled employees to handle the firework display as a measure of reducing the risks. Verbal communication when entering a contract is not sufficient for  hazardous businesses, therefore, there is need to evaluate the laws that govern such business contract, look into the various elements of a contract before  signing the contract, highlight potential liabilities as well as understanding the various employee types and determine whether it is necessary to change the business entity.

Discussion points

Determining whether the contract is governed by common law or UCC

This section will first analyze the conditions under which common laws and UCC applies before making the final decision on which law to choose for the presented case (Marsh, 2017). The available information on Acme Fireworks proves that it will apply common law since UCC usually apply for movable goods while common laws apply for the ongoing business performance (Marsh, 2017).  This section will provide a brief overview of the good in question for this case which is the display created by the company and what makes it an immovable good to qualify for common law.

Analyzing the formation of a contract between the owner and the business

This section will have the definition of a contract and provide overview details concerning the contract and the five elements that bind a contract, and relate them with the existing issue between the Acme Fireworks Company and display for the company events. There will be provisions for more details on the elements of a contract.

The potential personal liabilities to Acme Fireworks

This section will determine the liability to Acme Fireworks Company.  It is necessary to acknowledge the degree of danger the fireworks pose to individuals (Raveendran & Rema, 2016). In case someone gets injured, the owner risk liability claims. The sections will also address the need to acquire protection of every individual within the business premise to avoid the potential loss that could result due to liability claims (Miller & Jentz, 2017).

The different employment types

This section will provide detailed information on the various employment types to provide an understanding of how the business will operate (Rogers, 2012). For instance, there is limited space for the available fifteen employees and hiring more staff for the business operations will mean that those employees will be working temporarily and that brings the difference between temporary and permanent employees. This section will also have information on the types of benefits that different employees receive from the company.

Reasons why Acme Fireworks should not operate as a sole proprietorship

There will be a provision of an understanding on why the business used to be a sole proprietor and that is because the business had not reached the growth stage where there are several risks to consider than before (Rogers, 2012). The business continues to cover significant events. It will be important that the business choose a Limited Liability Company (Jelsma & Nollkamper, 2017). There will be the provision of advantages of changing the business entity from the sole proprietorship to Limited Liability Company. It will include the tax benefits as well as the organizational structures.


In conclusion, it is not necessary to include common laws in writing to become valid. However, business owners should ensure the protection of the employees and clients. Acme Firework will benefit from choosing the Limited Liability Company business entity and remain committed to the contract by employing competed and highly skilled employees.



Jelsma, P. L., & Nollkamper, P. E. (2017). The limited liability company. LexisNexis.

Marsh, P. (2017). Contract law. In Contracting for Project Management (pp. 65-80). Routledge.

Miller, R. L., & Jentz, G. A. (2017). Business law today: The Essentials. Cengage Learning.

Raveendran, R., & Rema, P. (2016). Profile of Injuries in Firecracker Explosion. Medico-Legal Update, 16(2), 150-154.

Rogers, S. (2012). Essentials of Business Law [Electronic version]. Retrieved on March 11, 2019, from