RESTAURANT BUSINESS

Restaurant Business

Restaurant Business

Polly was quite successful in opening her Restaurant Business and it even started quite well. She hired a good waiter Louis who cooked terrific dishes earlier on and Polly even had a contract with him for 1 year. She also made an advertising deal with Bob for three years. Polly even promised to pay some amount to Ed on a condition that her hotel would earn a specific amount of revenues. However, after few months, the operations of the restaurant started deteriorating because of the poor performance by the workers and some other problems like water gushing that occurred outside of the restaurant. All these incidents frustrated Polly and she decided to close the restaurant. This particular step did not go well with the workers and some of her friends. She presented the defense to her stakeholders for taking this step. She told them various reasons which led her to discharge the contract with the workers and the closure of the Restaurant Business. (Coase, 1960)

Despite of all the reasoning's which had logical issues, the workers were not convinced. They had contracts with Polly which meant she was bound to pay them their salaries for a fixed period of time. Under this scenario, she can certainly not back herself from the commitments she made to various stakeholders during the opening of the restaurant. Whenever a contract is signed between two people, it is the responsibility of both the people to abide by the terms and conditions of the contract. She can simply not free herself from the terms and conditions of the contract. Although, she had reasons for discharging herself from the contract but from law's point of view, it was not correct. Therefore, she is bound to pay the amount to various stakeholders who fall under the contract like the waiter Louis. She was supposed to pay her salary for one whole year. Now that the business has finished, but she would need to pay him the salaries for remaining months due to the contract made with him. So, definitely Polly will need to fulfill the terms and conditions of the contract. (Miceli, 1997)

Polly did argue that she had a personal satisfaction contract with her workers but it was only true in the case of Ed. It was true that she promised to pay Ed a certain amount from the revenues on the condition that the restaurant will be booked 80 percent for the month. However, after the closure of the Restaurant Business, this promise had no value at all. This is the reason why Polly presented this particular argument and it can be said that it had some logical reasoning. There was no doubt that Polly had a contract with Louis, had a deal with Bob but she promised Ed to pay a certain amount which meant that there was no written agreement between them. So, the theory of Polly had lot of value to convince Law Representatives, that she was not bound to pay him any ...