DEBTOR/CREDITOR RELATIONS, AGENCY, AND EMPLOYMENT
Case Assignment
You own and operate a full-service 24-hour auto repair shop—the only 24-hour shop in your town. In fact, you are pretty sure it is the only 24-hour auto repair shop in the state. Your business is now a success, but you had a lot of trouble initially finding an auto mechanic willing to work the late shift. You are now concerned that this mechanic could leave you at any time and open—or help someone else open—another 24-hour shop. You decide to ask him to sign a non-competition agreement saying that if he ever leaves your shop, he cannot work as an auto mechanic anywhere in your state for the next seven years. He looks at you and says, “Are you out of your mind?” What alternative terms of a non-competition agreement do you think would be more reasonable?
You are the owner of a boutique that sells bathing suits and beach apparel, and you are many months behind on your loan payments to the bank (you owe a total of $100,000). The bank now wants you to hand over all of your remaining company funds to pay back the loan. However, it is mid-April, and the summer season is coming up. That is when you typically do 60% to 70% of your business for the year. If you pay the bank now, you will not have funds to pay the rent or your staff; so, to stay in business, you will need the bank to wait until after the summer season. If you end up needing to file for bankruptcy, which type would be most appropriate for this situation: Chapter 7, Chapter 11, or Chapter 13? Would your answer change if the summer season were over, but you were still unable to pay back the bank loan? Explain your answers.
You are employed by a small college as a special-event planner. For events that you organize, you hire independent contractors to do the audio-visual setup and supply equipment such as microphones, speakers, projectors, etc. On the day of an event, you ask one of your independent contractors to make some last-minute changes to the AV sound equipment. Perhaps under stress by this request, the independent contractor rams into the back of someone’s car on his way to the campus. The driver of the car your independent contractor hit is transported to a hospital by ambulance with neck pain. A few weeks later, the college receives a letter from an attorney demanding payment of medical expenses for the driver of the car your independent contractor hit. Do you think the college will be liable for these medical expenses? Explain your reasoning.
The company you work for is going through some tough times, and your boss has no choice but to let an employee go. Your boss has told you that he is relieved that your business is in an “employment-at-will” state. You know your boss was upset earlier that your co-worker Ann had come late to an important client meeting because she had stopped off to vote on the last election day. The client nearly canceled his order because he felt disrespected by Ann being late, even though she was able to smooth things over when she arrived. Therefore, you are not surprised when you overhear your boss firing Ann and telling her that her termination is performance-based, and the company simply can’t tolerate employees who are deliberately late for important meetings. Is your boss’ firing of Ann legally justifiable? Explain your answer.
Your company makes a popular hot dog relish. The relish is packed in jars and sold in local grocery stores. While you were out of town, the supply of jars was running low, so your factory supervisor took the initiative and placed an order for more jars. Since the jars were absolutely necessary for keeping operations going while you were gone, you happily pay the supplier for the order when you get back. Now the factory supervisor is placing jar orders anytime supplies are low. Even though you never gave him formal permission to do this, you keep paying the supplier. One day you notice that the price of the jars the supervisor is ordering is higher than other suppliers’ prices. You call the supplier and ask for a price reduction because you never authorized the factory supervisor to place orders in the first place. Do you think the supplier might insist on getting his original price even though you say the employee was not authorized to place the order? Explain your answer.
