BUSINESS ORGANIZATIONS

Juan, Ahmad and Thomas decided to partner up and open up a food truck called YUMMYs. Juan invested $30,000 in the venture and Ahmad and Thomas invested $15,000 each. There was no formalized agreement entered into between the three of them - they each participate in running and managing the food truck and they take draws from the profits in proportion to their investment. 4 One day a customer ate at the food truck and later claimed that she got food poisoning from her meal. She has threatened to sue YUMMYS, Juan, Ahmad and Thomas for $200,000.

1. If she is successful, how would a court award damages and why? Explain the business structure and use that as the basis for your answer. Consider if instead of a partnership, YUMMYs was a corporation and Juan owned 50% of the shares and Ahmad and Thomas each owned 25% of the shares.

2. Based on this change in business structure, if the customer was successful in her lawsuit, how would damages be awarded in this situation? How much would Juan, Ahmad and Thomas each have to pay?