#1 &2 are each worth 30 points. 5 points for the legal issue(s), 5 points for th
ID: 363994 • Letter: #
Question
#1 &2 are each worth 30 points. 5 points for the legal issue(s), 5 points for the rule(s) of law, 15 points for a complete legal analysis, and 5 points for the correct conclusion.
Problem 1
BrickMart is a corporation engaged in retai1 merchandising at hundreds of locations throughout the United States with stores in every state and is one of the largest retailers in the country. BrickMart decided that it should make money in some manner in connection with preparing individual income tax returns. BrickMart management found that the needed tax expertise did not exist in its work force, and learned that training employees to do tax preparation is very expensive.
WeDoTaxes, LLC, a completely separate corporation with offices in every state, has specialized in preparing income tax returns for individuals for over 20 years, and their employees already possess amazingly awesome income tax skills. Officers of WeDoTaxes approached corporate officers of BrickMart and proposed to rent 1,200 square feet of office space within every BrickMart store in the continental U.S. at a rental of $25,000 per year, and to use that space to prepare income tax returns.
BrickMart declined, and counter proposed to grant the requested space for an agreed price of 25% of the gross fees collected by WeDoTaxes from all tax services performed on BrickMart premises.
BrickMart is to have the continuing right to approve all advertising of services to be performed on its premises, and to designate all hours of operation of the WeDoTaxes offices located within BrickMart stores, and to cause WeDoTaxes to remove from its BrickMart locations any WeDoTaxes employee who is unruly, or unkempt or dishonest.
Tax customers may pay WeDoTaxes, in which cases WeDoTaxes will within one week remit 25 % of the gross fees to BrickMart. Alternatively, tax customers may pay BrickMart or charge the fees to their BrickMart credit card, in which cases BrickMart will within one week remit 75 % of the gross fees to WeDoTaxes.
WeDoTaxes agreed, and WeDoTaxes began operating a tax preparation service in all BrickMart stores. BrickMart had signs painted on the entrance door to each WeDoTaxes office area "BrickMart Offers Customers a New Service: Have Your Income Taxes Prepared by WeDoTaxes While You Shop at BrickMart. Use Your BrickMart Charge Card to Pay for These Services".
Employee E of WeDoTaxes was grossly negligent in preparing a tax return for Client X, causing X to suffer $1,000 damages as a direct result. Client X has sued both WeDoTaxes and BrickMart for the negligent act of the WeDoTaxes employee. You may assume that WeDoTaxes is liable, could BrickMart be jointly liable? Why or why not? You must do a COMPLETE IRAC analysis.
Explanation / Answer
Issue: The plaintiff who was a customer to one of the defendants ( brick mart) was prompted to avail tax services at its premises, offered by the other defendant ( WedoTaxes), both being partners. The plaintiff suffered a loss due to negligence on the part of the defendant WedoTaxes.
Rule: The rule of tort with joint liability applies in this case.
Application: Since both defandants are partners in sharing the revenue, both are jointly liable to the plaintiff. Since the negligence was imminent and damage was caused, both have a joint liability for breach of duty.
Conclusion: Since both defendants are jointly liable, they need to compensate the plaintiff for his loss.The proportionate liability may be mutually agreed upon.
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