You have given your brother excellent legal advice regarding contracts and legal structure, and his lemonade stand business has become so successful that Peter’s lemon tree is not nearly adequate enough to supply lemons for all of the lemonade stands. This is good news, but also brings up a variety of legal issues now that additional labor and funds may be necessary to secure a wider supply of lemons.
While the lemonade stand business is highly successful, your brother still cannot afford an attorney. And because of the excellent legal advice you have been giving him, he has come back for more advice on the legal challenges involved in securing a new supply of lemons and expanding the business.
write a two- to three-page paper discussing the following legal issues involved in the efforts to increase the supply of lemons for your brother’s business.
- As Chief Operating Officer, Peter has been running many of the day-to-day operations, such as supervising employees and overseeing production of lemonade. However, he is also engaged in other actions not listed in his job description, such as negotiating the purchase of lemon sales from other kids in the neighborhood with lemon trees in their yards. Your brother has so far allowed Peter to engage in these actions but is becoming concerned. What kind of agency relationship does Peter currently have with your brother? What kind of agency relationship would you recommend?
- Peter’s idea for securing more lemons is to utilize the skills of his employees, who have become quite expert in climbing trees and using ladders in order to pick the largest and freshest lemons from the top of the trees. He wishes to hire more lemon pickers and find neighbors with lemon trees who want to make some extra money in exchange for allowing their employees to pick some fresh lemons. Your brother sees some wisdom in this approach, but also wants to consider purchasing lemons directly from a local farmer, even though these lemons will be a little more expensive and not as fresh. From an employment law perspective, which approach would be preferable?
- Your brother wants to get a small loan to finance the purchase of a large batch of lemons and hire some new employees. He visits several banks, but the loan officers all laugh and say there is no way a bank will give a loan to an 18-year-old with a lemonade stand. Your brother presents detailed financial statements showing that his company has very good financial prospects, but still no bank will loan to him. You personally do not want to lend him your own money, because you want him to learn to survive in business on his own. What other measures could you or your brother use to convince the bank to lend the money?