ACME Fireworks Firm’s Contracts and Expansion

Legal structures and guidelines are usually put in place to govern business contracts, human resource (HR) practices, and operations. Organizational managers should be aware of such laws if they are to implement appropriate models. ACME Fireworks is a small business enterprise that is planning to expand its operations after getting new contracts to offer superior services. The growth and expansion of ACME Fireworks should encourage the owner to focus on the power of common law to govern the targeted contracts, consider the major elements of enforceable contracts, be aware of the company’s liability, embrace evidence-based employment forms, and consider a limited partnership business type.

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ACME Fireworks

Business Contracts

The case of ACME Fireworks indicates that the small firm is planning to expand its operations and offer services to a number of business partners. The sole proprietorship will be selling large ground and aerial display fireworks to the identified companies. The firm is also expected to offer its services regularly. Existing laws governing contracts in the business world dictate how firms should render their services and support the needs of the targeted partners (Zubair, Bashir, Abrar, Baig, & Hassan, 2015). A proper understanding of various regulations can guide the investor to make evidence-based and timely decisions in order to pursue the targeted objectives effectively.

Analyzing the agreement made between ACME Fireworks and the identified businesses, it is notable that the contracts will be governed by common law. In the United States, there are certain principles that are applied across all industries. Several reasons can be presented to support this assertion. For instance, O’Brien, Powers, and Wesner (2018) indicate clearly that common law is what governs transactions that are contractual in nature.

Such pacts usually focus on intangible services or assets. The case of ACME Fireworks reveals that the small business is to provide fireworks displays. This means that common law is what provides appropriate principles to govern such contracts. The Uniform Commercial Code (UCC) is not applicable in such a case since it focuses on contractual transactions revolving around tangible objects or goods, including parcels of land, cars, and buildings.

The owner of the business should be aware that any change to a proposed offer will result in rejection. This means that the beneficiary or acceptor can create a new contract with a different provider (Zubair et al., 2015). Another important issue to consider is that any form of modification on a specific agreement is something that requires the consideration of every involved party. The targeted contracts cannot be governed by UCC since any consideration is never treated as a qualification or prerequisite. The description of the intended service, performance time, nature of the suggested work, and price are crucial aspects that the firm’s owner should analyze carefully. These attributes make the contract valid.

Contract Discussion

Contracts are governed by UCC and common law. After going through the presented case study carefully, the reader observes that the owner of ACME Fireworks formed a treaty with the businesses. The five essential elements of an enforceable contract can support this assertion. These aspects should exist if a specific contract is to be implemented successfully. The first element is called an offer (Zubair et al., 2015).

This aspect focuses on demand and a promise to some extent. This element is applicable since the sole proprietorship company is ready to provide the described services to the businesses. The second one is that of acceptance. Since no changes have been indicated, it is clear that both parties have agreed to the terms of the contracts. The provider has accepted to offer its fireworks displays to the businesses. Consideration is the third critical attribute of an enforceable agreement. Steingold (2017) defines this element as something that is presented or exchanged with the services being delivered. For this case study, consideration will refer to the monetary compensation that ACME Fireworks will receive.

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The third attribute that business partners or owners should take seriously is that of capacity. According to O’Brien et al. (2018), any party planning to formulate a specific agreement should be willing to enter into it. The current agreement is, therefore, enforceable since the parties have the capacity to offer and receive the intended services respectively. The fifth element to consider when examining the enforceability of a specific agreement is called lawful purpose (Steingold, 2017).

This attribute indicates whether the targeted contract is for an illegal or legal purpose. These elements show clearly that the sole proprietorship and the businesses have established a contract that is binding. A proper understanding of such elements will ensure that the intended objectives are realized in a timely manner.

Personal Liability

Existing business law stipulates that a sole proprietorship shares identity with the investor or owner. Although one might not have to register his business, he or she becomes responsible for all activities pursued by the firm. Similarly, sole proprietorship business owner is personally liable for the business’s debts and burdens. Some of the risks outlined by business law for such investments include the actions undertaken by employees or laborers (Bridge, 2017). This kind of analysis or argument can be considered when examining the liability of ACME Fireworks.

According to the targeted contracts, ACME Fireworks is supposed to create a number of fireworks displays regularly and support the goals of the businesses. This scenario indicates that there is a possibility of some spectators being injured by a stray firework.

The discussion above reveals that such a firm will have personal liability for such an accident. Steingold (2017) asserts that sole proprietorships will have liabilities for all damages, torts, or injuries that might occur when providing various services. Errors or omissions of the business firm are also factored under personal liability. In order to minimize the negative impacts of liability, it is necessary for investors or business owners to consider purchasing adequate insurance.

Employment Types: Advantages and Disadvantages

Business firms should hire employees whose competencies resonate with the targeted objectives. There are various types of employment that companies can consider before identifying the right people to deliver positive results. Researchers use agency law to analyze different types of contracts between persons and companies (Zubair et al., 2015). There are various options that the owner of Acme Fireworks can consider if the firm is to emerge successfully. Currently, ACME Fireworks has fifteen employees whose contract types are not indicated. Before making the most appropriate decision, it would be appropriate for the owner to consider the discussions presented below. This is the case since workers have their unique job descriptions, positions, benefits, and responsibilities.

Full-time employment is the first option available for the owner of ACME Fireworks. According to agency law, the advantages of this type include a commitment to the job, increased responsibility, and accountability. Companies that have permanent employees can allocate specific roles and create a long-term business plan. The disadvantages include that such workers should get annual leave, have insurance cover, and do not work on holidays. The second choice is that of causal employees. This typically means that the targeted workers will operate on an irregular basis depending on ACME Fireworks’ goals.

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The major advantages include the ability to allocate complex tasks to skilled individuals, increased morale since individuals are paid depending on services rendered, and the absence of benefits. Some of the disadvantages include reduced commitment and the inability to predict the future of various contracts between the company and the existing businesses (Bridge, 2017). Additionally, such employees cannot be forced to accept offers or duties.

The third type is called contract employment. The advantages of this choice are that workers tend to be skilled, the presence of legal requirements, and reduction of risks incurred. The disadvantages are associated with this type: the targeted contractors are usually expensive, companies must stick to the terms of the employees, and services are provided for a short or specified duration. Another choice is that of trainees or apprentices.

This type is advantageous since employers can monitor and guide the workers throughout the period (O’Brien et al., 2018). The trainees also require less capital to support their demands. The individuals are usually committed since they want to acquire superior skills. However, the disadvantage is that apprentices might not be in a position to offer skilled services, thereby undermining the performance of the targeted company.

From this analysis, it is evident that ACME Fireworks should consider each of the above employment types and follow the dictates of agency law to make informed decisions. The most appropriate choice should be able to support the firm’s performance and eventually make it a leading player in its industry (Bridge, 2017). Consequently, the commitment and empowerment of the employees, depending on the selected type, will ensure that the targeted businesses continue to receive exemplary fireworks displays.

Reasons and Arguments

The presented discussion offers meaningful insights and concepts to explain why ACME Fireworks should not operate as a sole proprietorship. Although this business model has made it possible for the firm to achieve most of its objectives within the past two years, there is a need to expand its operations. Additionally, different businesses have recognized ACME Fireworks’ ability to offer superior fireworks displays on a regular basis (Zubair et al., 2015). With these developments in place, the firm might continue to encounter numerous changes and problems that the leaders should take seriously. This is the case because the firm is planning to expand its business partners and meet their changing demands.

The owner should consider a better model in an attempt to reduce risks and achieve better results. The current system or type is associated with increased personal liabilities. For example, any form of injury that might occur when providing the intended fireworks displays will amount to personal liability. The owner will be required to pay for such damages, something that might affect the firm’s sustainability or performance.

A new business type will address this potential problem by ensuring that the liability for any form of liability is shared among different investors (Steingold, 2017). The fact that more businesses are expecting to receive exemplary services from ACME Fireworks explains why there is a need for a new model to promote performance. A new venture or format will attract more individuals and maximize the company’s operating capital. Consequently, the firm’s returns or profits will increase significantly within the next few years.

Sole proprietorships tend to have higher risks for doing business. ACME Fireworks should, therefore, embrace a new type and be able to hire more employees and formulate an evidence-based business plan for delivering the targeted objectives (Saha & Kumar, 2017). A superior business model will also ensure that numerous ideas and concepts are presented by the stakeholders to make the business profitable. Emerging issues and potential risks will be mitigated before affecting the firm’s productivity. This proposal means that ACME Fireworks will continue to grow in the future and eventually support the needs of many business partners.

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Recommendation and Rationale

The current growth rate of ACME Fireworks explains why the owner should consider a new business format. The most appropriate one is that of a limited partnership. With this model, the company’s owner will identify other limited partners to continue supporting its performance. The investor should also be keen to retain his or her position as the general partner. This means that he will be the one in charge of operating or managing the business. More business partners or customers will be identified, thereby making it possible for ACME Fireworks to emerge successful (Bridge, 2017). The owner will also be required to manage, plan, and create the best vision for the firm. This strategy will address most of the disadvantages associated with sole proprietorships and eventually deliver positive results.

The decision will make it easier for the company to raise funds and meet the changing needs of the targeted customers in need of regular fireworks displays. The partners will also become a useful source of ideas and insights for maximizing profitability. The general owner will find it easier to manage the company using the inputs gained from the partners. The level of personal liability for the company will reduce significantly (Saha & Kumar, 2017). Emerging issues will also be resolved in a timely manner. The firm will find it easier to identify and attract new talent. It would, therefore, be appropriate for the owner to embrace this form of business entity and eventually improve organizational profitability.


The above discussion has revealed that ACME Fireworks has what it takes to provide the intended fireworks displays and support the objectives of its business partners. However, the current model is unable to meet the firm’s goals. ACME Fireworks should also consider each of the above issues and implement superior strategies to reduce business liability. The business should focus on the specifications of the common law since it is what governs the proposed contracts.

Emerging challenges and obstacles should also be addressed in an attempt to drive performance and make the firm a leading provider of high-quality fireworks displays. In conclusion, the growth and expansion of ACME Fireworks should encourage the owner to focus on the power of common law to govern the targeted contracts, consider the major elements of enforceable contracts, be aware of the company’s liability, embrace evidence-based employment types, and consider a limited partnership business model.


Bridge, M. (2017). Good faith, the common law, and the CISG. Uniform Law Review, 22(1), 98-115. Web.

O’Brien, C. N., Powers, R. E., & Wesner, T. L. (2018). Benchmarking and accreditation goals support the value of an undergraduate business law core course. Journal of Legal Studies Education, 35(1), 171-189.

Saha, S., & Kumar, P. (2017). Influence of participation in decision making on job satisfaction, group learning, and group commitment: Empirical study of public sector undertakings in India. Asian Academy of Management Journal, 22(1), 79-101. Web.

Steingold, F. S. (2017). Legal guide for starting & running a small business (15th ed.). Berkeley, CA: Nolo.

Zubair, A., Bashir, M., Abrar, M., Baig, S. A., & Hassan, S. Y. (2015). Employee’s participation in decision making and manager’s encouragement of creativity: The mediating role of climate for creativity and change. Journal of Service Science and Management, 8, 306-321. Web.

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