Legal and Ethical Scenarios
Read the scenarios and the questions that follow. Answer Scenarios 1 and 2, then select any two (2) of the remaining scenarios for a total of four (4) scenarios.
You must also provide an answer for the recommendations section. Identify and analyze the legal issue(s). Apply legal concepts and make potential arguments as directed using laws, cases, examples, and/or other relevant materials. Consider using short headings (consult APA materials) to separate the topics. Summarize the facts; do not copy the scenarios into the paper. Support your answers with information from the textbook and at least four scholarly sources in addition to the textbook or course lectures. By Day 7, prepare a 5 to 7 page paper that identifies the legal issues and potential solutions and answers all questions presented, supported by relevant legal authority. Do not exceed the page length by more than two pages.
Overview
Headquartered in Savannah, Georgia, ________________ operates two coffee shops in Georgia and one in Alabama. Approximately 30% of the employees work full time; however, ____________ primarily hires part-time employees as baristas, delivery drivers, cooks and dishwashers. The company experienced explosive growth over the last four years, but with the growth came increased legal issues. The owners seek your advice on the following legal and ethical issues.
Scenario 1 – Business Organizations
Bailey Andrews and Danita Brown met while working at Starbucks and attending college in Georgia. Bailey studied business at South University, while Dania attended the Art Institute for culinary management. The two friends were tired of working for someone else and opened [SELECT A NAME FOR THE COFFEE SHOP] as a partnership after college. Now that the business has grown, the two partners are considering a new legal form for their business.
- Analyze three types of business organizations Andrews and Brown might consider for their existing restaurant. Be sure to consider at least one limited liability option. Explain the advantages and disadvantages of each type.
- Select one type of business for Andrews and Brown and provide support for your choice.
- Select a name for the coffee shop and use it when answering the remaining scenarios.
Scenario 2 – Employment Discrimination
Born in 1975, Juanita Mendoza immigrated from Mexico in 2005 and became a U.S. citizen in 2010. Mendoza speaks fluent English with a strong Hispanic accent. Her accent does not interfere with her ability to communicate with others. Mendoza worked as a cook and waitress for 20 years. Although she did not have any formal management experience, Mendoza applied for a shift manager’s job with [Restaurant Name]; however, she was not hired for the position. The restaurant currently employs 5 full time employees and 14 part time employees.
- Analyze the possible grounds Mendoza might have for a discrimination lawsuit against [Restaurant Name].
- Provide support for each ground selected and then provide arguments that [Restaurant Name] could make to counter each claim.
- Explain how your answer might change if the restaurant only employs a total of 12 people.
Scenario 3 – Secured Transactions and Bankruptcy
Bayside Restaurant Supplies agreed to sell 10 new commercial coffee makers and 5 freezers to [Restaurant Name] for $27,500. Bayside retained a security interest in the equipment. [Restaurant Name] agreed to pay for the equipment in equal installments over 48 months.
- Evaluate Bayside’s rights as a creditor if [Restaurant Name] files bankruptcy 18 months after purchasing the equipment.
- Discuss Bayside’s rights as a creditor if [Restaurant Name] sold the 2 refrigerators and 5 coffee makers for $750 approximately 30 days prior to filing bankruptcy.
- Explain how a failure by Bayside to file a financing statement might impact the outcome of both scenarios.
Scenario 4 – Insurance and Agency
Dylan is a delivery driver for [Restaurant Name]. While delivering orders within the scope of employment, Dylan rear-ended a car driven by Vickie Talley. Dylan was insured by State Farm and his policy contained the following information.
Exclusions—What is not Covered
State Farm will not pay for any damages an insured person is legally obligated to pay because of:
Bodily injury or property damage arising out of the use of your insured auto while used to carry persons or property for a charge, or any auto you are driving while available for hire by the public.
- Analyze the liability on the part of Dylan, Vickie, State Farm and [Restaurant Name]. Be sure to cover issues related to both insurance and agency.
Scenario 5 – Consumer Protection
[Restaurant Name] does not publish the prices of drinks on the menus. Nik Carlson, a customer of the restaurant filed a lawsuit claiming that failure to provide drink prices on the menu constitutes an unfair business practice because customers must make quick decisions about ordering drinks after asking about the price. Another plaintiff, Joe Swanson, claimed that he was not provided with a cost for his drink until after he ordered it, which constitutes consumer fraud.
- Analyze the applicability of state and/or federal consumer protection laws that Carlson and Swanson can assert against [Restaurant Name]. Select which party should win and support your answer.
Scenario 6 – Liability on Negotiable Instruments
Andrews and Brown hired a bookkeeper, Jenice, and gave her general authority to issue company checks drawn on SunTrust Bank so that Jenice can pay employees’ wages and other company bills. Jenice decides to cheat her employers out of $10,000 by issuing a check payable to the Bayside Distributors, one of the suppliers of seafood and fresh local produce. Jenice does not intend for Bayside to receive any of the money, nor is Bayside entitled to the payment. Jenice endorses the check in Bayside’s name and deposits the check in an account that she opened at Wells Fargo Bank in the name “Bayfood Dist. Co.” Wells Fargo accepts the check and collects payment from the drawee bank, SunTrust. SunTrust charges [Name of Restaurant] account $10,000. Denice transfers $10,000 out of the Bayside account and closes it. [Name of Restaurant] discovers the fraud and demands that the bank return the money.
- Evaluate which party or parties bear the loss.
Scenario 7 – Breach of Contract and Remedies
Andrews ordered 20 round tables to seat parties of two, 25 square tables to seat parties of four, 5 tables to seat larger parties and 175 chairs. The tables were specially ordered to contain the logo of the restaurant on the top of each table. Andrews paid for the entire shipment when placing the order; however, the supplier was responsible for making the shipping arrangements. The tables and chairs arrived three weeks later; however, five were scratched and damaged. Seven of the chairs were missing.
- Analyze the restaurant’s options related to the damaged tables and missing chairs. Be sure to address the applicability of the UCC to the transaction.
Recommendations
Conclude your paper by justifying suggestions for [Restaurant Name] to help prevent future occurrences of these types of legal problems. Identify any ethical issues you find and present recommendations as applicable. Be specific in your recommendations
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