Sam Smith has invented and patented a new solar panel. His panels are cheaper to

Question

Sam Smith has invented and patented a new solar panel. His panels are cheaper to produce and more efficient than most solar panels currently on the market. He would like to manufacture and sell his solar panels to residential contractors for professional installation on commercial and residential buildings. There is a small chance that his solar panels might cause fires, if they are not installed correctly. To limit his liability, he plans to offer training videos of panel installation for all contractors who purchase his panels. Manufacturing these panels will require that he acquire several existing businesses that manufacture and package similar products. He has calculated that he will need to raise an additional $10 million in capital to start the business. He would also like to keep his personal taxes and personal liability as low as possible. Using the IRAC method explain what type of business entity would be the best choice for Sam’s solar panel business. Discuss the various factors relevant to this decision and explain why these factors support your choice of legal entity.  Identify the legal issue, state the controlling rule of law, and apply the law to the facts to reach your decision.

Explanation / Answer

IRAC method which is considering four aspects before deciding about the type of business entity one should adopt have four determinants.I-Issue, R-Rule, A-Analysis and C-Conclusion.

Issue- In this case Sam's produce solar panel so issues in the business are solar panels may catch fire so how Sam want to deal with the damage due to this fault,and how the buisiness will be liable for catching fire and second issue is he wants to lower personal taxes and personal liability.

Rule- Rule of laws for liability in solar panel may be  negligence and strict liability of the company for such situation.There are various elements of negligence as stated in tort laws of USA like Duty of / standard of care,Proximate cause,Res ipsa loquitur,Calculus of negligence,Rescue doctrine,Duty to rescue.Strict liability in US tort law defined as Product liability,Quasi-tort and Ultrahazardous activity.

Analysis- In this business case analysis include how the business will respond when such thing happened.How it will deal with negligence and strict liability? Who is responsible for these things and James solar panel have adopted which measures to deal with these situation.James solar panel have plans to offer training videos of panel installation for all contractors who purchase his panels because solar panels might cause fires, if they are not installed correctly.

Conclusion-By analysing the facts we can conclude that James solar panel should not be held for negligence and strict liability because it has adopted a proper system.Another issue is lowering personal taxes and personal liability so LLC(Limited liability corporation) should be best for the solar panel.

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