Business organizations
There are some business organizations Donny Woods, Johnson and Gerald Smith can decide to venture in. The law recognizes the forms of business as legitimate. The three standard they can venture into include; partnerships, a corporation and a limited liability company. In case they choose to form a partnership, the three individuals will be the partners in the enterprise. The size of the organization will depend on how the three entrepreneurs will contribute to raising capital for the business. There exist various forms of partnerships they can decide to invest in the types of the company include a general partnership, a limited partnership, and a limited liability partnership. The partnership has some advantages which include, greater ability to raise more capital as opposed to each one starting their restaurants. The company is relatively easy to be formed compared to other types of business organizations. The company is subject to fewer regulations than corporations, and there are no corporate income taxes. Despite the advantages, the company has some disadvantages. The disadvantages are, the partners have unlimited liability thereby creating personal risks in case the business fails to meet its obligations. Secondly, the partnership has a limited life; the company may end in case one of the partners withdraws, or one partner dies. Dispute resolution and decision making can be timely as negotiations have to be made before arriving at a conclusion (Schwarcz, 2013).
The three individuals can also opt to form a corporation. In an organization, the members will be considered as separate entities the business the way. They may choose to sell shares t the public and have people buy shares from them company. A corporation has the following advantages; unlimited commercial life, great flexibility in raising capital through the sale of shares, ease of transferring ownership by selling stock and the members have limited liability interest to the business activities. The disadvantages associated with forming a corporation include; regulatory restrictions whereby the government closely monitors the activities of the organization and sometimes following the regulations can be costly. Corporations are associated with higher organizational and operational skills thus the entrepreneurs must be ready to follow the laws to the letter. Corporation is subject to double taxation which may significantly affect the returns of the entity (Polski, 2010).
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The three individual can also opt to form sole proprietors where each develops his restaurant and runs all activities related to the corporation single-handedly. Sole proprietorship have the advantage of greater flexibility as the owner makes decisions without consulting any other person. In case the restaurant makes no profit the proprietor has the right to change the form of bushiness without consulting anyone. A sole proprietorship has been associated with some problem which includes; limited capital as the amount invested depends on of the entrepreneur ability to raise money. The entity nay fails to run competitively due to lack of various skills which one person may not be able to have this may limit the expansibilities of the business. Losses incurred in such activities are boarded by the proprietor in full. The owner of the restaurant will have unlimited liability to the restaurant's dealings. In case the restaurant incurs obligations beyond its net worth, personal property of the owner may be taken to meet the liabilities owned by the business to other people.
Dishonored checks
A client or any person sanctioned to draw on the account if there is more than one individual may stop compensation of any item drawn on the customer's account. Or close the account by an order to the bank describing the item or account with reasonable certainty received at a time and in a manner that affords the bank a reasonable opportunity to act on it beforehand any action by the bank with respect the restaurant provisions (Schwarcz, 2013). If the signature of more than one individual is required to draw on an account, any of these persons may stop payment or close the account. A stop-payment order is active for six months. Nevertheless, it lapses after fourteen days schedule days if the initial order was verbal and was not established in a record in that period. A stop-payment order may be reintroduced for additional six-month periods by a record given to the bank for a period throughout which the stop-payment order is operative. The burden of launching the fact and quantity of loss subsequent from the payment to the restaurant contrary to a stop-payment order or order to close an account is on the restaurant. The loss from payment of an item contrary to a stop-payment order may include compensations for dishonor of subsequent items under the restaurant jurisdiction.
Liability on Negotiable Instruments
According to the laws of negotiable instruments, the maker of the cheque must pay according to the term of the note. Therefore Woods, Johnson, and Smith must meet their obligations without fail. They must honor their part of the deal. Failing to pay may result in a court case whereby they will be charged with doing contrary to their obligations to meets their commitment to a negotiated deal. Furthermore, the restaurant management should consider some issues before losing its signature be affixed on a cheque (Polski, 2010). Because its name appears on a check, it means they have agreed to effect the transaction. Once signed, the maker of the check becomes bounded to pay personally. He or she can not shift the obligation without the consent of the payee.
Breach of Contract
The restaurant has a valid basis upon which they can refuse to receive the consignment. Under the contract, the supplier was to meet all costs related to shipment and whatever damage that occurred to the property. The restaurant can order for a renegotiation to have the damaged property considered or refuse the deal until new tables and chairs are brought. Article two of the uniform commercial code deals with the transaction of properties. It does not apply to any transaction projected to function only as a security transaction (Schwarcz, 2013). However, the Article does not impair or repeal any statute regulating sales to consumers, farmers or other specified classes of buyers. In some circumstances, the uniform commercial code has been thought not to apply to a franchise. It is because the law does not use the sale of goods. The contract can thus be re-negotiated, and agreement made basing on this provisions.
Product Liability
The restaurant is entirely liable for the products it gives to the market. Product liability refers to a producer or distributor being responsible for giving their clients customer defective or harmful products. Responsibility for a defect in nature or quality is placed on the sellers of the product along the chain of distribution. Therefore the restaurant is responsible toe ensure they products they give to the market meets the desired safety standards. The restaurant can not claim the defect is due ti the cooking oil manufacturer. After buying and using the cooking oil, the restaurant becomes entirely responsible for the product. It must ensure the product is safe before using it. The customers have a right to sue the restaurant for selling to them inadequate and harmful products (Benson, 2009).
Holder in Due Course
Holder in due course concept in commercial law aims to protect a customer of debt where the purchaser is assigned the right to receive the mortgage payment. Well, Fargo has a valid claim in the case. It was acting according to instructions given to it by its clients. Well, Fargo did nit understand their existed a dispute between the restaurant and Joe craftsman (Benson, 2009). Well, Fargo ought not to be drawn into a conflict that exists between parties to the contract to renovate the restaurant. In accepting to pay Joe, craftsman, Wells Fargo was executing its obligations that required it to pay persons or entities that the restaurant had issued them-them cheques from the restaurant's account.
Recommendation
Holder in due course can be considered the discriminatory commercial law to customers. Subsequently, it was repelled, and trade regulation rule concerning the preservation of consumer’s claims and defenses came into existence. The holder in discourse clause in credit transactions is thus nonexistent. The restaurant and both Well Fargo and Joe craftsman should be aware of this change while arguing about their claim. Wells Fargo should come up with better means of effecting credit payments made by their clients. A period should be allowed for both parties to verify the transaction before Wells Fargo executes the provisions given. Business ethics ought to be followed by both Joe craftsman and the restaurant (Benson, 2009). They should stick to the provisions of their contracts and in case an issue come up and it was not captured thus they should be considerate of each party’s interest and include it appropriately. Well, Fargo should have a mechanism whereby conflicts between its clients and solved am before it is dragged into the matter.
References
Schwarcz, S. L. (2013). Commercial Trusts as Business Organizations: Unraveling the Mystery. The Business Lawyer , 559-585.
Benson, B. L. (2009). The natural evolution of commercial law. Southern Economic Journal , 644-661.
Polski, M. M. (2010). Measuring transaction costs and institutional change in the US commercial banking industry. In Annual Conference of the International Society for New Institutional Economics, September (pp. 22-24).
