Jack Wannabee is a smart man with many good ideas.He is a hard worker in his own way.However, he is a bit of a dreamer, and has never been in business for himself.He believes lawyers are expensive, and that a man's word and a "hand shake" are as good as any written contract.He has spent years as a full time Engineer with a Los Angeles firm, but has always dreamed of being his own boss.

In 2015, Jack designed some souvenirs related to the entertainment industry, and formed a corporation called Hollywood Gifts, Inc. ("HGI").HGI signed license agreements authorizing it to use several entertainers' autographed photos on the products.The license agreements state that HGI will pay the entertainer $1 for each licensed product sold, and prohibit HGI from allowing any other party to sell or distribute the images.Jack is the sole officer, director and shareholder of HGI; in fact, according to its corporate books, he is HGI's only employee.To keep his Engineer job while building HGI's business, Jack uses sales representatives who market and sell the products to hotel gift shops and small retail stores around the United States.Each sales person solicits customers in their state, and issues a standard HGI quotation-form that identifies the products offered, the prices and delivery date, and states the order is accepted upon receipt by HGI.The sales person then receives the orders and forwards them to HGI.Jack then simply forwards the orders to ABC Products, Inc., a Los Angeles firm owned by his brother-in-law, and ABC produces the products for $5 each.The sales representatives know that Jack has another job, so they frequently also notify ABC directly of the orders to ensure the orders receive prompt attention.When the goods are ready for delivery, ABC places HGI labels on the product packages and ships them directly to the HGI customers.

There are no written agreements between HGI and ABC or between HGI and its sales representatives.Jack has informed each sales person that they are "on their own" and responsible for their own expenses, and will be paid a 50 commission on each item sold in their state.However, as an incentive to keep them motivated, HGI advances their sales-related expenses, gives them HGI business cards identifying them as an HGI "Sales Representative", and requires that they submit monthly reports concerning their sales schedule and activities.Jack has told them that so long as they are working diligently to sell HGI products, the relationship will not be terminated.

The arrangements described above worked well for several years, without any problems.

Bob Jones is the sales representative for Nevada.In 2018, he secured an order from the Casino Royale Hotel in Las Vegas for 10,000 souvenirs which were to have the words "Casino Royale" stamped on them; the price specified was $10 each.Mr. Jones forwarded the order to HGI, and also sent an email (without prices) to ABC; but the email contained a typographical error stating the words to be stamped on the goods were "Casino Royal".Jack was on vacation and did not see the order or forward it to ABC.Jack's brother-in-law was familiar with the Casino Royale Hotel in Las Vegas, and knew HGI was trying to sell souvenirs to that hotel.He sent an email to the hotel asking if they were sure they wanted the products stamped "Casino Royal".The hotel never responded, so ABC acted on Mr. Jones' email, and produced and shipped the goods to the hotel.When the items were delivered, the hotel rejected them as non-conforming, and threatened to sue HGI for breach of contract and breach of warranty.When Jack complained to ABC, his brother-in-law insisted the goods conformed to the email received from Mr. Jones, and demanded payment.Jack denied HGI had entered into any contract with the hotel, denied HGI had ordered the goods from ABC, and denied HGI was responsible for Mr. Jones' email, claiming Jones had no authority to obligate HGI.Jones demanded HGI pay his commission on his sale of 10,000 souvenirs.Jack denied HGI owed Jones any commissions, and he terminated Jones.Jones threatened to sue HGI for his commissions and for wrongful termination.Two weeks later, Jack learned that his brother in law at ABC had been giving copies of the entertainers' signed photographs to his teen-age daughter, who was selling them to her friends.

(a)Identify each contract you believe was entered into according to the story above.Be sure to identify the parties to the contract, the specific facts and the law that explain how each contract was entered into.

(b)Identify each contract you believe was breached, explain the nature of the alleged breach, and explain any defenses you believe may be available to the defendant.

(c)Do you believe Jones was an HGI employee or an independent contractor?Discuss the facts and the law that support your answer.