Bus 116 0901SP
1. Sugarland granted Carlos the right to sell Sugarland's candy products and to use its trademark
and trade name in connection with his business. One day, Sue bought a piece of Sugarland candy
from Carlos. The candy made Sue ill because it was made with a toxic substance, giving rise to a
claim for product liability. Also, the next day Tom slipped while walking in Carlos' store. Tom
slipped because Carlos had negligently left a spilled drink on the floor.
What is the business relationship between Sugarland and Carlos?
I would have to say that the relationship is that of Carlos being a Sole Proprietor and
Sugarland a vendor to his store. Sugarland does not receive and of the proceeds from the
store and has no capital in the store.
Is Sugarland liable to Tom and/or Sue? Why or why not?
The product liability would lie with Sugarland because they are knowingly using a toxic
substance in their candy and they are liable to Sue because she was made ill but not to Tom
because he was not injured from the product but from a spill that has nothing to do with the
Is Carlos liable to Tom?
Carlos was negligent and is liable to Tom for not cleaning up the spill. Tom can seek
damages for his injuries and only Carlos is liable.
2. Andy wants to start his own business. He has decided to rent space in a "strip" mall and open a
pet shop. Additionally, he will provide dog grooming services. He figures he can do almost
everything himself, though he will need to hire a part-time employee on an "as needed" basis.
His friend, Lacy, has agreed to work when needed.
Andy is considering operating his business as a sole proprietorship. What are the primary legal
advantages and disadvantages to this form of business ownership for Andy's pet shop?
Andy will have the advantage of running his business how he sees fit and manage his
employees how he wants. It will also be easy to create is business because he will not need
a lawyer nor will he need to register with the government, and filing taxes will be simple.
Andy will be at a disadvantage when it comes to financing his business since there are not
many options. He will also be personally liable for anything that may happen in his store.
3. Aretha wishes to purchase some real property owned by Tropical Gardens. She learns that
Tropical Gardens is a partnership owned by Waldheim, Berry and Lamont. She also learns that
the partnership needs capital and that the need for capital is one of the major reasons the partners
are selling their real property. Because Tropical Gardens is a partnership, Aretha has the
following concerns -- discuss each concern thoroughly
(a) Can the partnership convey the land in the name of Tropical Gardens?
(b) If there is a breach of contract, against whom must Aretha sue?