Jason Knapp, doing business as Knapp Associates, hired Barbara Meade as an independent contractor in March 2009.

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Jason Knapp, doing business as Knapp Associates, hired Barbara Meade as an independent contractor in March 2009. The parties orally agreed on the terms of employment, including payment to Meade of a share of the company’s income, but they did not put anything in writing. In March 2011, Meade quit. Knapp then told Meade that she was entitled to $9,602.17—25 percent of the difference between the accounts receivable and the accounts payable as of Meade’s last day. Meade disagreed and demanded more than $63,500—25 percent of the revenue from all invoices, less the cost of materials and outside processing, for each of the years that she worked for Knapp. Knapp refused. Meade filed a lawsuit in a state court against Knapp, alleging breach of contract. In Knapp’s response and at the trial, he testified that the parties had an oral contract under which Meade was entitled to 25 percent of the difference between accounts receivable and payable as of the date of Meade’s termination. Did the parties have an enforceable contract? How should the court rule, and why

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Business Law Text and Cases

ISBN: 978-1111929954

12th Edition

Authors: Kenneth W. Clarkson, Roger LeRoy Miller, Frank B. Cross

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