Business Law Dispute (Essay Sample)

18th April 2017
Facts in this case
Sam and John, two friends, set up a lawn mowing business to assist them in raising money for college. The market themselves and start getting offers right away. Sam handles the offer between their business and Smiths. The offer between Johnsons and their business is managed by John using the same contract Sam signed with the Smiths. Business blossoms and Sam and John have to work extra hours. John gets a new lawn mower from Mower Supply on credit. The tedious work leaves them exhausted. The Johnsons lose their jobs and cannot continue paying them, yet they keep on mowing their lawn. Sam makes a mistake of leaving the lawn mower running, and a kid from the neighborhood pushes it, damaging Smith's flowers and porch. John, in anger, punches Sam and they decide to terminate the business. John ends the contract between him and Mower Supply. Sam cannot continue working because John has returned the mower.
Issues in this case
There are various matters here depending on who is affected. There are five parties here namely John, Sam, Smiths. Mower Inc. and the Johnsons. Each party has a different stake and effect to the case as outlined in the following analysis.
Issue I: John vs. Sam and Mower Supply Inc. vs. John
* Is John justified for terminating the contract between him and the Mower Supply Inc. for the mower without Sam's input?
* Would Mower Supply Inc. be justified in suing John and Sam for the breach of contract when he terminated the payments?
Rule I
John has the justification to end the contract he made with Mower Supply Inc. There is no mention that the deal was done between the business of partnership between John and Sam and Mower Supply Inc. For a business to be acknowledged as a company, a contract in the stipulation of duties, definitions, and outlines for dissolution must be outlined (Partnership Act, Ch. 334, pt. 1). The Mower Supply Inc. can sue John for the breach of contract in buying the mower. According to Unfair Contract Terms Act, 1977 (UCTA), the seller reserves the right to sue the buyer in case of breach of an original contract. The buyer has the right to uphold the contract to termination (2).
Application I
The coming together of John and Sam to set up a business cannot be termed as a partnership in the legal sense because no contract or business formation was linking these two parties. Because of this reason, John's act of getting a lawn mower from Mower Supply Inc. could be termed as having been a personal venture. He is the one who made the contract and therefore liable to pay for the lawn mower. Mower Supply Inc. cannot sue Sam because Sam was not a party to this contract. Sam cannot sue John for returning the mower because John had made an independent deal to buy the mower. Mower Supply Inc. may face unnecessary losses owing to the performance on the mower after John defaulted on payments. They are liable to sue him so that he can uphold the condition of the contract until the end.
Conclusion I
Based on the analysis in this issue, John would be liable to continue paying for the mower whether they are in business or not because he signed a contract binding him to the payments. Sam could not sue for returning the lawn mower even if it meant the loss of income to him because he was not a party to the contract for the acquisition of the mower. John's decision to return the mower without consulting Sam would be upheld.
Issue II Smiths vs. Sam
Are the Smiths justified in suing Sam for negligence and damage to their property when he was mowing their lawn?
Rule II
Under the Cause In Fact element of the law of negligence, under civil liability Act 2002 (NSW), a person may be held liable for damages to the property or personal injury if their actions directly resulted in a series of other measures that created the damage (David, 1).
Application II
The Cause In Fact element of negligence law shows that Sam would be held liable for damages on Smith's property. Sam knew that a running lawn mower could be dangerous if left in the right hands yet he decided to leave it running when he went to rest. This action resulted in a neighborhood boy tampering with the lawn and damaging Mr. Smith's property.
Smiths had upheld their end of the contract by continually paying Sam every week as stipulated in the contract. In return, Sam was supposed to be careful and mow their lawn every week.
Conclusion II
The judge would find Sam guilty of negligence and possibly force him to cover for the damages occurring on Smith's porch and other injuries that might have resulted from this negligence.
Issue III Sam vs. John and Sam/John vs. The Johnsons
* Is Sam liable for compensation from John for the assault John did on him after the lawnmower