DEBTOR/CREDITOR RELATIONS, AGENCY, AND EMPLOYMENT

Case Assignment

There are no additional readings for this assignment, beyond the Pearson tutorial and the three textbook readings. However, some of the concepts in this module are tough, so make sure to read the materials carefully before starting on this assignment.

Again, we will be going through a variety of hypothetical scenarios. For each scenario, you need to explain the reasoning behind your answer and use at least one reference from the background materials to support your answer. Overall you need to have a minimum of three references from the background materials cited in your paper. In addition to three sources from the background materials, feel free to cite additional sources that are not included in the background materials. However, any citation should be from credible sources such as articles from ProQuest or textbooks from Ebrary rather than random webpages. Your paper should be 4- to 5-pages total in length:

1. Suppose you own a shipping business and have your own fleet of trucks. When you hired your truck drivers you did a thorough background check and made sure they all had clean driving records. However, recently you had more business than you could handle with your existing fleet and used an independent contractor for some of your shipping. This independent contractor ends up getting in a huge accident and destroying some of your client's merchandise in the process. Your client finds out that this independent contractor, unlike your own employees, does not have a good driving record and has had his driving license revoked or suspended on several occasions. Are you liable for the damages your client faced?
2. Now suppose as owner of your business you have been generally satisfied with the performance of all of your employees. But one of your employees begins to slip a bit in their performance and has also gotten on your nerves a bit recently. One day when you are in a bad mood you decide to fire this employee without any kind of warning. However, a few days later you begin to worry about legal consequences even though none of your employees have contracts and your employee handbook states that anyone can be terminated at your own discretion. What kind of legal risks, if any, do you face for terminating this employee? 
3. You are the owner of an Italian restaurant famous for your very tasty pesto sauce that no other restaurant in the city can beat. As a result of your tasty recipes, you are the only successful Italian restaurant in town. To protect your business from potential competitors, you make all new chefs that you hire sign a noncompetition agreement that forbids them from opening up an Italian restaurant anywhere in the U.S. for five years if they leave. Would such an agreement be likely to hold up in court if one of your chefs violates it? 
4. Now suppose you are the owner of a company and have designated your personal assistant as your purchasing agent for the purchase of all office supply orders of less than $500. Your assistant makes a purchase of some discount office supplies for a total price of $450. You are unhappy with the quality of these supplies but there is a no-return policy for these supplies since there were purchased in a special clearance sale. Are you obligated to pay the $450 even though you did not specifically approve this purchase?
5. You are the owner of a retail business, and you have fallen behind for many months on your loan repayments to the bank (you owe a total of $100,000). The bank has become fed up and now wants you to hand them over all of your remaining company funds to pay back the loan. However, the holiday shopping season is coming up in a few months and this is where you typically do 60-70% of your business for the year. Without your company funds you will not be able to pay your rent and pay your staff, so you will not be able to pay back the bank until after the holiday season. If you end up needing to file for bankruptcy, what type do you think would be most appropriate for this situation - Chapter 7, Chapter 11, or Chapter 13?

Assignment Expectations

• 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.
• Reference your sources of information with both a bibliography and in-text citations. See the Student Guide to Writing a High-Quality Academic Paper, including pages 13 and 14 on in-text citations. Another resource is the "Writing Style Guide," which is found under "My Resources" in the TLC Portal.