Case Study Assignment Newman was negligent in his actions on the road when he swerved into oncoming traffic. Julie Mycology is simply looking for compensation for her injuries. The fact that Newman is not a full time employee and only works when he sees fit makes him an independent contractor that you pay for his services. Because he is an independent contractor, you could argue that independent contractors have liability, and this could possibly help you defend your company against the lawsuit.
Elaine starting her own business and the use of the old, used tock is an issue because you cannot get out of or reconstruct your contract at this time. Due to the fact that you both are merchants and abide to the USC, you are not allowed to change the terms of your agreement. This was Just a bad decision on your part. George not knowing the arrangement between the company and Elaine is not an issue. You two are not at fault for not informing George because he does not hold a position in the corporate office, therefore has no say in what business decisions are made.
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He will possibly try to sue for this arrangement arguing that he is the majority hardheaded because of this, George can sue under Shareholders Derivative Suit, which means, that since he is a shareholder, he has the right to sue if the company Is doing something unethical. In this case, George will lose the case because although this arrangement with Elaine wasn’t smart, it wasn’t unethical either. If Elaine sells her shares to George, there is a possibility of him voting you out of your position as President. In the Articles of Incorporation, it states that there are preemptive purchasing rights on any stocks being sold by any shareholder.