Knarles and his son Barkley, who is seventeen years old, operate a facility maintenance company based in Maryland that regularly does business in the District of Columbia, Maryland, and Virginia. They have several contracts with building owners where they have agreed to provide building maintenance to both residential and commercial buildings within the three jurisdictions already mentioned. Often, Knarles and Barkley will replace outdated and broken equipment such as water heaters and boilers that are part of a buildings heating system. Additionally, as part of maintenance, they regularly wash windows, remove snow and do touch-up painting as required. They receive a monthly payment of $2,000 and $4,000 depending on the size of the building. Because of Knarles long-term associations with building owners, the contracts that were once in writing are renewed without a new written agreement.
Knarles and Barkley have four full-time employees. One of the employees is a licensed plumber in the District of Columbia. His yearly license renewal is paid by the firm as part of an employment agreement that was negotiated four years ago, which was in writing for two years. It was the second such agreement entered into between the plumber and the company. The license, through inadvertence on the part of Barkley, was not renewed this year despite his father assigning him the duty so he might gain experience in what was involved in the license renewal process. While Knarles is away in Hawaii for a maintenance trade show, Ian Chetum, a building owner in northern Virginia approached Barkley. Barkley sends Chetum a standard agreement he has signed. Chetum signs it and returns it to Barkley with a check for the first month.
Chetum has an immediate need for Knarles and Barkleys services as it is the middle of February and his building is without heat. Bartley sends the plumber and another worker to Chetums building. While inspecting the non-operating boiler at Chetums building, the plumber notices that it is one that has been recalled by the manufacturer, Housewarm, because of a defect that does not allow all the carbon monoxide produced by the boiler to vent properly. Apparently, Chetum bought the boiler at a salvage yard and replaced another non-operating boiler. Further, according to the plumber, the boiler was installed improperly. The plumber notifies Barkley about the problems with the boiler and Barkley immediately tells Chetum. Chetum tells Bartley that he does not want to buy a new boiler and he asks if the existing boiler can be fixed to get through the winter months. Barkley asks the plumber about a quick fix for the winter, but the plumber tells Barkley that he would not recommend the quick fix as the boiler is defective and has been recalled. Nevertheless, they go ahead and repair the boiler.
However, according to an article in the Washington Post that Knarles reads after his return, some residents in a building in northern Virginia had become sickened and admitted to the hospital for observation. It appeared they were suffering from the effects of exposure to carbon monoxide. All these people lived in the Chetum building. Knarles later learns from Barkley of the agreement he entered into with Chetum on behalf of the company. Knarles calls Chetum, informs him he wants no part of the deal, and tells him he will message a check over to his office less the charge of the work already completed by the plumber. Chetum sues for breach of contract.
Legal and Ethical Issues raised by the Case
The case study above raises several legal and moral issues. The company that Knarles and Barkley operate is based in Maryland, but it does business in the District of Columbia, Maryland, and Virginia. In other words, the company operates within three jurisdictions. According to Cheeseman (2013), jurisdiction refers to power or right of a legal agency to exercise its authority over an individual, subject matter, or territory. Jurisdiction over a person relates to the power to try him or her as a defendant while jurisdiction over subject matter refers to power derived from the countrys or states constitution or laws to consider a particular case. Jurisdiction over a territory relates to the geographical area over which a court has the authority to decide cases. Therefore, legally, Knarles and Barkley fall under the leadership of the three jurisdictions in which the maintenance company operates, namely, Maryland, District of Columbia and Virginia. In particular, for any legal case that arises against them, their jurisdiction is based on the three states. For example, for the lawsuit raised by Ian Chetum, courts headquartered in Virginia have the competence to hear the case since the company operates there.
According to the case, Knarles and Barkley have several contracts with building owners where they have agreed to avail building maintenance to both residential and commercial buildings. However, because of Knarless long-term relationships with the building owners, the contracts that were once in writing are mainly renewed without a new written agreement. Cheeseman (2013) defines a contract as an agreement between two parties, which is enforceable legally when executed by specific requirements. Contract formation is a crucial process for any business and, therefore, it is essential that parties involved understand the terms included in the contract and their rights and responsibilities. The six aspects of a valid contract as described by Cheeseman (2013) include "an offer, acceptance, consideration, mutuality of obligation, competency and capacity, and a written instrument." Therefore, is illegal that Knarles renews contracts with building owners without new written agreements. Similarly, a legal issue relating to contract formation arises when Barkley sends Chetum a standard agreement, which he has already signed. He fails to follow the required process of forming a valid contract. Moreover, the contract does not include the circumstances under which the parties can terminate the contract, including the procedure for giving notice of the termination. In this case, the contract between Bartley and Chetum is not legally enforceable.
Similarly, this case raises a legal issue regarding sales contract. According to Cheeseman (2013), a sales contract is a legal agreement covering the exchange of goods, services or personal property between a seller and a purchaser. Sales contracts must be in writing to be enforceable by law. Similarly, they should specify the parties involved, the subject matter being sold, and any special terms or conditions. However, the Uniform Commercial Code that governs domestic sale contracts in the United States does not need a formal sales contract for compliance. Instead, a memorandum or collection of papers is adequate agreements. Regarding this, the courts have held that a written check can be considered a written summary of a sales agreement (Cheeseman, 2013). Apparently, when the plumber was inspecting the faulty boiler at Chetums building, he noticed that it is one that had been recalled by the manufacturer, Housewarm. However, Chetum could not return the faulty boiler to Housewarm or seek any legal redress against the company because he did not have a sales contract with them. Moreover, Chetum had purchased the boiler at a salvage yard.
Likewise, the concept of agency arises in the case when Knarles assigned the duty to renew the plumbers license to Barkley so he might gain experience in what was involved in the license renewal process. In business, an agency relationship arises when a principal gives an agent the legal authority to act on behalf of the principal when conducting business with a third party (Cheeseman, 2013). The agency relationship can arise by express agreement, the operation of law, ratification or implied authority. In this case, Knarles creates the agency relationship orally. The principal is Knarles; the agent is Barkley while the third party is the plumber. Therefore, in the event of any repercussion from the failure of Barkley to renew the plumbers license, Knarles would bear the legal liability. Similarly, in the agency relationship, the principal agrees that the actions of the agent bind the principal to later contracts made by the agent as if the principal has himself made the following agreements personally (Cheeseman, 2013). Evidently, this arises when Barkley enters into a standard agreement with Chetum, a building owner from northern Virginia, while Knarles is away in Hawaii at a green facilities maintenance trade show. During this time, Barkley gives directives to the employees concerning the maintenance on a non-operating boiler at Chetums building on behalf of his father.
The primary tort that arises from this case relates to the negligence of both Barkley and Chetum that leads to sickening and admission of tenants in Chetums building. According to Cheeseman (2013), a tort is a civil wrong that may cause harm or injury to another person. Three types of torts can happen in business, namely, intentional, negligence, and strict liability torts. Cheeseman (2013) adds that, regardless of the tort action, three aspects must be present. The accused had a duty to behave in a given way; the plaintiff must prove that the behavior demonstrated by the defendant or tortfeasor did not uphold the duty owed to the plaintiff, and the failure led to an injury or harm to the plaintiff. Once the plumber identified that the faulty boiler in Chetums building was one that had been recalled by the manufacturer because of a defect that does not allow all the carbon monoxide produced to vent properly, and that it was installed improperly, he notified Barkley.
Barkley also notified Chetum, but Chetum chose to have the boiler fixed. Consequently, several residents in the building became sickened and admitted to hospital and it appeared that they were suffering from the effects of exposure to carbon monoxide. The fact that both Brakley and Chetum were aware of the problem; they are both tortfeasors against the residents of Chetums building. A strict liability tort is also evident from the case where responsibility for the harm on the residents can be imposed on Housewarm, the manufacturer of the faulty boiler, without proof of negligence. As Cheeseman (2013) records, in lawsuits related to strict liability tort, the injured parties only have to establish that the product in question directly caused their harm. Based on this, it would be difficult for the parties to proof because the plumber identified the non-operational boiler as one that had been recalled by the manufacturer because of a defect that does not allow all the carbon monoxide produced to vent properly. Another tort of theft arises when Joe Stucko claims that Chetum stole his plans for converting old HVAC systems to new ones.
Regarding crime, corporate liability arises when the maintenance company is responsible for the actions of its employees, in particular, Knarles and Barkley. According to Cheeseman (2013), a corporate can be liable criminally in two ways, namely, strict liability and vicarious liability. The failure of Knarles to avail written agreements to the building owners is a strict liability on the part of the company, and a tort against the customers. According to the case study, the contracts were once in writing, but Knarles renews them without a written agreement simply because of the long-term relationships he has with the building owners. Similarly, strict corporate liability is evident in the failure of Barkley to renew the plumbers license, which poses a possible harm to loss of job by the plumber in the absence of criminal intent. Barkley did not intend o do anything illegal, if the plumber were to lose his license, the company would be liable for...
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