The Questions

The questions I formulated for this project had to due mainly with the issues of contracts and the process of hiring people. This is because I might decide to go into business for myself after I graduate from school, so I wanted to make sure I am remaining on the ethical side of the law. According to our book, Introduction to Business Law by Jeffrey F. Beatty, Susan S. Samuelson, and Dean A. Bredeson, “Profitability is generally not what motivates managers to care about ethics. Managers want to feel good about themselves and the decisions they have made; they want to sleep at night. Their decisions—whether to lay off employees, install safety devices in cars, burn a cleaner fuel—affect peoples' lives. When two researchers asked businesspeople why they cared about ethics, the answers had little to do with profitability:

‘The businesspeople we interviewed set great store on the regard of their family, friends, and the community at large. They valued their reputations, not for some nebulous financial gain but because they took pride in their good names.’” (Pg. 20).

Here are the questions and answers from Mr. Winter:

 

1.      When a executor bilateral contract is made verbally, will it hold up in court? Or must you have something in writing? What makes it voidable?

It depends what it is about. Real estate, for example, is all about having it in writing. Certain things don’t have to be in writing to technically be considered a contract.

2.      Often times a job will require new hires to sign a waiver form releasing any and all rights to sue the company in court, instead having to go to mitigation. Are you required by law to sign that form, and if you chose not to, can they legally refuse to hire you?

The place hiring you is allowed to deny you employment. They set the terms, because Nevada is an “at will” state. It is not unreasonable. But, if the case is more serious, like a wage dispute, then it is allowed to be taken to court.

3.      What is the best way to formulate or draw up a contract?

Write it down! Have both parties sign it. It does not need to be notarized. Make sure you show it to someone who is knowledgeable and can help you, like a lawyer. If possible, include an exit/dissolution plan, for when things go wrong. Make sure someone is able to be bought out.

4.      If I own a business and a shipment of merchandise arrives late more than once, can I sue for missed profits?

Maybe. If the contract says so, expectation damages can be collected. But the one who is late delivering is not liable unless it has been written into a contract you both have.

5.      During a job interview, if the employer tells the person being interviewed that they will not be hired based on appearance (hair color, weight, etc.) or body modifications (piercings or tattoos), is it technically discrimination?

Yes, technically it is. But certain types of discrimination have protection in the US under various laws. A place of employment can discriminate based on looks, and it is not illegal. It is not legal to discriminate based on things like skin color or religion.

6.      When is it better to have partners in your business, rather than having a sole proprietorship? What about a partnership?

A partnership can be good in a business, because the reason you form one in the first place is because each party has some skill the other one doesn’t, and they need each other. So if it is advantageous for you to have this person, then yes. Otherwise, you don’t want to do into business with someone else.

7.      When hiring potential employees, how far can you go when choosing to look up personal information, and when can you ask for drug testing?

You can look up someone’s personal information, but only run a person’s credit report if they sign off to it. Drug testing is not illegal, per say. But that does not mean you are overstepping boundaries by doing it. Much of the companies doing drug testing are being forced to do so by insurance. Insurance companies control much of how a business can run.

8.      Is it illegal to hire unauthorized workers, yet it seems to happen all the time. Are laws becoming more lax due to increasing numbers of illegals residing in this country?

With the increase in illegal residents, yes, it is often ignored. But it is not because of lax laws, it is about money. Employers are able to pay illegal people under the table, and can avoid paying taxes, workman’s compensation, and other fees.

9.      When opening your own business with outside investor capital, is it best to go with an LLC or an S corporation (assuming you are not using any “angel investors”)?

It depends on the organizational structure, because there are no tax differences. In general, with an S corporation, you have to worry about control. Each entity is taxed on equal ownership. There is more flexibility in an LLC. You have the ability to say, “I own 1% of the business, but I get 99% profit.”

10.  In the instance of libel, how far can you take a defamation case? Is it even worth perusing legal action against someone who is defaming you say, on a popular internet website?

It depends. How many hundreds or thousands of dollars are you willing to put out verses what you can recover? It may not be worth it to pay a lawyer to take someone to court over a libel case, especially since you more likely than not, won’t win much. Some people don’t care, and will lose money to sue, because they want to teach the other person a lesson.  If it is online, there are 3^rd party laws that protect them from most lawsuits.

After reading the answers to the questions, I thought of this quote from the book, “Businesspeople are optimists—they believe that they have negotiated a great deal and everything is going to go well—sales will boom, the company will prosper. Lawyers have a different perspective—their primary goal is to protect their clients by avoiding litigation, now and in the future. For this reason, lawyers are trained to be pessimists—they try to foresee and protect against everything that can possibly go wrong. Businesspeople sometimes view this lawyering as a waste of time and a potential deal-killer, but it may just save them from some dire failure.” (Beatty, J.F. & Samuelson, pg. 208). Not that it is a bad thing, it is just that lawyers are making sure that you are not being overly optimistic, and missing the important things.