business law paper 6

Written Assignment #1: Kyle and his family own a successful farming and processing business at several locations near Weston in Marion County, AL (not far from Hamilton, AL). The produce that they grow (vegetables and fruits) is sold under their own label, Alabama Sunshine. Kyle raises all of the produce on the family farms and sells it and the condiments that he makes from the produce at a roadside market that his family owns just outside of Weston on Bexar Ave.

Although his family helps run the business, Kyle hires temporary workers during the peak times of the planting, growing, and harvest seasons. He also hires temporary workers during peak production times in his condiment processing facility in Hamilton, AL. As can happen, Kyle occasionally is approached by one of his local, seasonal workers about hiring a cousin or other relative who is new to the Alabama. This potential employee would agree to work for below minimum wages, would not ask for or expect any health insurance or other benefits, and would gladly accept all wages in cash without any deductions for social security (OASDI) or taxes. With the rising costs of fuel, fertilizer, and supplies, Kyle needs to cut expenses wherever and whenever possible and he could save money by hiring such workers. Since his operation is rural (primarily in Marion and Fayette Counties, AL), he feels that he would probably not have any problemsfrom State or federal authorities.

Kyle tries to be an ethical business person. He knows that what he is being asked to do is questionable at best and possibly illegal but it is mid-September; harvest time for the late season crops is approaching quickly; and he knows that he needs the extra workers to get his fall crops in and the land ready for the next planting. Without a successful harvest and preparation for the next planting, there will be no Alabama Sunshine produce to sell and he will not be able to support his family or regular workers.

As people have grown more health conscious, demand for Kyle’s organically grown produce has increased and grocery store customers are asking for Alabama Sunshine produce by name. Kyle would like to expand the retail operations to include a store along a nearby major highway (I-22) that connects Birmingham, AL, Tupelo, MS, and Memphis, TN but he does not want to get entangled in what he considers to be “unnecessary” federal and state regulations.

Kyle finished his business degree from UNA several years ago and he vaguely recalls Unit 1 in his BL 240 textbook, so he understands the basic issues but he trusts your knowledge and comes to you for advice and counsel. What should Kyle consider as he ponders the relationship between “law” and “business ethics”? What factors, if any, have changed society’s concept of business ethics and the social responsibility of business enterprises? What should Kyle understand about the relationship between “maximum profits” and “optimum profits”?

Kyle wonders if the federal government can regulate his business operations. And, if so, under what clause of the U.S. Constitution might the federal government regulate Kyle’s business activities? What is Kyle’s best argument against federal regulation of his roadside stand and farm businesses as the operations exist now? Will he be successful in this argument? Would it make a difference if he opens a store along the highway (I-22) connecting Birmingham, Tupelo, and Memphis? Under what authority would the State of Alabama have an interest in Kyle’s business? What other issues might Kyle face?

To help you organize your thoughts, I suggest that you read the fact set; decide which facts are relevant and which are merely verbiage; based on the information in Unit 1, decide which information is relevant to the facts; then state the questions (issues) that you must answer to help Kyle and, for each issue, state the relevant law (general statement of the applicable law in your own words). You can apply the law to the issue to reach a conclusion if you like, but reaching a conclusion is not required. The key is to identify clearly the questions (issues) that you must answer and state the applicable law that will guide you in answering each respective question.

Written Assignment #2: Kyle is looking to move Alabama Sunshine to the next level. His canned and dried produce lines are growing but he wants to push his new hot sauce, salsa, and condiment lines. He sees the organically grown produce operation as gaining a solid, well-rooted consumer base; however, Kyle wants to expand beyond seasonal produce. He needs a way to communicate an identity for his new products and, after considerable thought, settles on the name Kyles Fine Condiments, a name that Kyle believes will stick to the plates and palates of his patrons. Kyle has successfully gotten the hot sauce, salsa, and condiment lines into the United Nutrition Associates (UNA) grocery stores in Cullman, Madison, and Fultondale, AL, and has placed red and white billboards along I-65 in Alabama and US 43 in Tennessee advertising his new products; his original market in Weston, AL; and his new company website (KFC.com). The slogan of his new venture, which he uses in radio and TV ads, is “KFC, your assurance of farm fresh, family-focused, affordable food.” Shortly thereafter, Kyle received a certified letter from a well-know, nation-wide chain restaurant, Kentucky Fried Chicken (KFC), alleging harm to its business interests, including infringement of and dilution of its trademark and trade name.

Undeterred and determined put some spice into his profit margin and give customers a new taste, Kyle decided to kick off the upcoming Thanksgiving holiday season by introducing a variety pack of his hot sauce, salsa, and condiments, spicy enough to take the chill out of the air, calling it the KFC Holiday Pack. The variety packs are now stocked in all of UNA’s grocery stores and prove to be so successful that the stores quickly sell out and UNA wants more of Kyle’s variety packs. UNA’s chief financial officer (CFO), Candace B. Ritenoff, calls Kyle promising to buy all of the KFC Holiday Packs that Alabama Sunshine can produce within the next 30 days and promises to mail a deposit of $10,000 immediately to seal the deal. Unfortunately, Kyle was out-of-town, having decided to celebrate the forthcoming holiday season early by touring the Gulf Shores area to relax and look for new business opportunities. The CFO left the offer on Kyle’s voice mail and Kyle did not get the message until a week later when he returned to Weston. He immediately called Scooter, his production manager, telling him to crank up production of the variety packs by running the plant 24 hours a day, seven days a week, and promising Scooter a hefty bonus if UNA’s needs are met. The sudden activity, promise of the bonus, and associated pressures caused Scooter to relapse back to his old habit of substance abuse, requiring that he be admitted to a residential detox facility in Savannah, TN, but not before he had gotten the revised production schedule operational at the plant.

Kyle is concerned about the letter from the restaurant company, doesn’t want to get in a protracted and costly legal battle, and comes to you, his faithful college friend, for counsel. Kyle mentions that, after telling his farm field production workers about restaurant’s letter, some of them threw overripe tomatoes and cabbage at passing KFC trucks, causing one of the drivers to run off the highway, striking several utility poles. Kyle is also concerned that, since he has contracts with AubumAdvertising Signs for the billboards and WLEO radio station for “on-air” commercials, he could wind up losing a lot of money. As a passing comment, Kyle mentions that he also has a contract with Crimson Computer Services for the maintenance of the Alabama Sunshine/Kyle’s Fine Condiments website and asks your counsel about the offer from UNA’s CFO and whether he may have to pay Scooter the bonus as promised.

To help you organize your thoughts, I suggest that you read the fact set; decide which facts are relevant and which are merely verbiage; based on the information in Unit 2 (note that WA2 may also include information found in Unit 1), decide which legal information is relevant to the issues; then state the relevant legal issues, state the relevant law, and apply the law to the facts.

Written Assignment #3: Kyle took your advice and decided not to spend the money to fight for his claim to “KFC.com” as the domain name for his new product line, Kyle’s Fine Condiments. Kyle, however, does want to continue the move of his business, Alabama Sunshine, to the next level of operations. His produce marketing efforts in Hamilton and surrounding areas in Alabama and into Mississippi and Tennessee have proven to be very successful. He now wants to expand to other choice locations in areas that he likes to visit, namely the beach and resort areas along the Gulf Coast of Alabama and Florida near San Destin and Panama City. Kyle has found a possible location to construct a new store in Florala, AL. The property is owned by Sam. Since Kyle’s business is successful and people throughout Alabama and abutting States know of him and of Alabama Sunshine, Kyle hires Angie to contact Sam, negotiate a price, and, if possible, buy Sam’s property. Concerned that, if Sam knows that he (Kyle) wants the location, the price will increase, Kyle instructs Angie to not tell Angie that she is working for Kyle. During negotiations with Sam, Angie realizes that Sam’s property is a good deal, an exceptionally good deal, and buys the property for herself, not Kyle as agreed. Kyle is angry, very angry, and wants to know what he can do.

Respecting your knowledge of business law, Kyle comes to you for advice. What are the issues and how would you advise Kyle? During the conversation, Kyle mentions that Alabama Sunshine is operated as an informal partnership between himself and his father, who has pretty much retired from the management of the business. He asks you about the advantages and disadvantages of a partnership and whether he should change the business to some other business structure. If so, which one would be the most advantageous? In passing he notes that the farm worker that he hire back during the peak season (remember WA1) has now filed an employment discrimination (national origin) charge against him personally and against Alabama Sunshine and Kyle wonders what the procedure is for such charges.

To help you organize your thoughts, I suggest that you read the fact set; decide which facts are relevant and which are merely verbiage; based on the information in Unit 3; decide which legal information is relevant to the facts; then state the legal issue (relevant facts), state the general rule of law that applies, apply the law to the facts and then go to the next legal issue.

Written Assignment #4:

As noted in WA3, Kyle took your advice and decided not to spend the money to fight for his claim to “KFC.com” as the domain name for his new product line, Alabama’s Best Foods and reorganized the company as a LLC (limited liability company). Kyle, however, does want to continue the move of his business, Alabama Sunshine, to the next level of operations and he wants to complete the expansion by construct of a new store in Florala, AL. Recall that the property was owned by Sam; however, since Kyle’s business was so successful and people throughout Alabama and abutting States knew him and Alabama Sunshine, Kyle hired Angie to contact Sam, negotiate a price, and, if possible, buy Sam’s property, Kyle instructed Angie to not tell Sam that she was working for Kyle. Unfortunately, Angie realized that Sam’s property was an exceptionally good deal and bought the property for herself, not Kyle as agreed. Kyle has gotten over his anger and wants to move on with the construction of the new building on Greenacre (the Angie/Sam parcel of land).

Angie had acquired Greenacre in fee simple absolute and proposes to convey Greenacre to Kyle with a right of reverter (reversionary interest) as the location for Kyle’s new store. The proposed conveyance would be a defeasible fee (fee simple defeasible) with the condition that, should Kyle fail to construct and open his store on Greenacre within 24 months or should Kyle cease to use Greenacre as a site for his store in the future, then Greenacre would revert back to Angie or her heirs. Angie also mentions that she does not want to transfer mineral rights to Kyle.

All this sounds pretty complicated to Kyle and he is growing nervous about this deal. His knowledge is in growing, processing, and marketing produce, not real estate transactions and land transfers. Knowing that you are (successfully) completing BL 240 and have studied land-use control and real property, Kyle turns to you for counsel. He is also concerned about any other problems that he should consider in this transaction or relating to the construction of the new business location. What are the legal issues and how would you advise Kyle? Kyle also mentions that a customer of United Nutrition Associates (UNA—recall WA2) is complaining that his holiday pack did not provide the health benefits that she would expect from organically grown produce. The family has filed a complaint with the federal government and is now threatening a lawsuit. Kyle wants to know what the legal issues are and how he should respond.

To help you organize your thoughts, I suggest that you read the fact set; decide which facts are relevant and which are merely verbiage; based on the information in Unit 4; decide which legal information is relevant to the facts; then state the legal issue, state the general rule of law that applies to that legal issue, apply the law to the facts, and go to the next legal issue.

 

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