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Legal Environment Of Business Essay

2390 words - 10 pages

Introduction
XYZ Construction Inc. is concerned about the economic and legal factors that could affect the organization, particularly as the company transitions during these upcoming months from a private company to public ownership, or, initial public offering (IPO). XYZ must be concerned with the legal environment of our business, which is the basic set of rules, and laws that surround the atmosphere of business in general, and the industry that frames XYZ Construction Inc.
This document will first describe the business environment for XYZ Construction Inc. Next, this paper will analyze the legal factors XYZ will face during this transition, and the activities our employees will need to become familiar with in order for XYZ to remain competitive. Remaining within the constraints of rules and regulations regarding new contracts that our organization will face prior to; during; and after this significant shift to becoming a publicly owned entity.
Business Environment for XYZ Construction Inc.
The horizontal construction industry, in contrast, is primarily made up of local and State agencies that are charged with efficiently serving the public and spending public funds. Contract awards are typically to the lowest bidder and risk is often avoided because of the potential liability associated with possible failures resulting from the use of new materials, technologies, and approaches." (United States Department of Transportation - Federal Highway Administration, 2005) Although XYZ Construction Inc. is currently a horizontal company, with the rapidly approaching IPO, and imminent transition to becoming a publicly owned corporation, it will be necessary to prepare our employees with the skills to remain competitive in today’s dynamic, technology filled markets. These skills include having a vast comprehension of laws that will be surrounding the economic and financial aspects of our company, and industry as a publicly owned corporation.
Legal Factors
“Without enforceable contracts, commerce would collapse” (pg.853) Contracts are an agreement between at least two individuals that ensure good faith that each entity keeps his or her promise according to the written agreement. If for some reason one of these parties does not keep the promise made by this written or verbal agreement is enforceable by a court of law. “A contract is an agreement that is enforceable by a court of law or equity. A simple and widely recognized definition of contract is provided by the Restatement (Second) of Contracts: “A contract is a promise or a set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty.” (Pearson Learning Solutions, 2012, pg.854)
This gives each party protection for business dealings. A contract must have the following to be enforceable by law.
According to Pearson Learning Solutions, 2012:
1. Agreement. To have an enforceable contract, there must be an agreement...

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