| Course | DBA-8070 Seminar in Law, Ethics, and Global Society |
|---|---|
| Module | Module 2 |
| Paper type | Module 2 written assignment: business formation and contracts |
| Length | About 622 words, 5 pages |
| Format | APA 7 student paper |
| School | Thomas Edison State University |
| Program | Doctor of Business Administration |
| Updated | October 2026 |
Free sample paper for DBA 8070 Module 2
Forming the Installer and Reading the Fine Print: An LLC Decision and a Hospital Subcontract
Student Name
Doctor of Business Administration, Thomas Edison State University
DBA-8070: Seminar in Law, Ethics, and Global Society
Mentor Name
Month Day, Year
Forming the Installer and Reading the Fine Print: An LLC Decision and a Hospital Subcontract
Introduction
Our company has always hired outside crews to install the cabinetry and paneling we build. Installation errors now cause most of our warranty claims, and two of our largest customers want a single firm responsible for supply and installation. The owners have decided to bring installation in house. Two legal questions follow: what form the new business should take, and what its first major contract, a subcontract for a hospital expansion in Monmouth County, actually commits it to.
Choosing a Form of Business
Mayer et al. (2012) compare forms of organization on liability, taxation, management and ease of formation. Three forms are realistic for us.
Installation carries risks the shop does not: falls, damage to finished buildings and claims from other trades. A separate entity keeps those claims away from the manufacturing assets. New Jersey's revised LLC statute lets the members set management and economic rights in an operating agreement and protects members from the company's debts (N.J. Stat. Ann. § 42:2C-1 et seq.). I recommend an LLC owned by the same family members, with an operating agreement that names a manager, sets capital contributions and requires adequate insurance. Liability protection holds only if the LLC is run as a real business with its own accounts, contracts and capital, so it must not become a shell.
| Form | Liability | Taxation | Fit for installation |
|---|---|---|---|
| Division of the existing company | Installation claims reach all company assets | Within current return | Simple, but exposes the shop to field risk |
| Corporation | Limited to the corporation | Entity tax unless S election | Formal; more governance than needed |
| Limited liability company | Limited to the LLC | Pass-through by default | Flexible management and taxes |
Reviewing the Hospital Subcontract
The general contractor's form subcontract runs 31 pages. Three clauses carry most of the risk.
The payment clause says we will be paid "if and only if" the owner pays the contractor. A pay-if-paid clause shifts the risk of the owner's nonpayment to us, and courts in a number of states read such clauses narrowly or refuse to enforce them. New Jersey's prompt payment law requires a prime contractor to pay subcontractors within ten days of receiving payment for their work (N.J. Stat. Ann. § 2A:30A-2), but it does not by itself guarantee payment if the owner never pays. We should ask for pay-when-paid language with a fixed outside date, such as 60 days after our invoice.
The indemnity clause requires us to defend and indemnify the contractor for any claim "arising out of" our work, even if the contractor is partly at fault. We should limit indemnity to claims caused by our negligence, in proportion to our fault.
The delay clause charges us the owner's liquidated damages for any delay in the project, with no cap. Since our work is a small share of the contract value, we should cap our exposure at the value of our subcontract and limit it to delays we cause.
Contracts and Relationships
Williamson (1979) explained that the governance of a contract should match the transaction: repeated, specialized relationships justify more careful structures than one-time sales. Our relationship with this contractor is likely to repeat. Malhotra and Lumineau (2011) found that contract provisions aimed at controlling a partner tended to weaken goodwill trust after a dispute, while provisions that coordinated the work supported continued collaboration. Our revisions therefore add coordination terms, such as schedules and a process for change orders, alongside the risk limits.
Conclusion
An LLC separates installation risk from the shop while keeping management and taxes simple. The subcontract should be signed only with payment timing, proportional indemnity and capped delay damages, framed as coordination terms that serve a long relationship.
References
Malhotra, D., & Lumineau, F. (2011). Trust and collaboration in the aftermath of conflict: The effects of contract structure. Academy of Management Journal, 54(5), 981-998. https://doi.org/10.5465/amj.2009.0683
Mayer, D., Warner, D., Siedel, G., & Lieberman, J. K. (2012). Foundations of business law and the legal environment. Saylor Academy.
N.J. Stat. Ann. § 2A:30A-2 (West 2024). Prompt payment to contractors and subcontractors.
N.J. Stat. Ann. § 42:2C-1 et seq. (West 2024). Revised Uniform Limited Liability Company Act.
Williamson, O. E. (1979). Transaction-cost economics: The governance of contractual relations. Journal of Law and Economics, 22(2), 233-261. https://doi.org/10.1086/466942
Reading the DBA 8070 Module 2 assignment instructions
This page pairs Module 2 of DBA-8070, Business Formation and Contracts, with one of the course's four written assignments, which together count for 20 percent; the syllabus lists the assignments without assigning modules. Expect to compare forms of business organization for a real or realistic venture, choose one with reasons tied to liability, taxation and management, and analyze contract terms that matter to it. Mayer, Warner, Siedel and Lieberman's chapters on business organizations and contracts give the legal framework. Cite statutes precisely when you rely on them, and remember that the course treats law as a business tool, so show what each legal choice protects or costs the organization.
How this DBA 8070 Module 2 example is built
The paper opens with the business reason for the legal questions: warranty claims and customers who want one responsible firm. A three-row table compares a division, a corporation and an LLC on liability, taxation and fit, and the recommendation explains why field risk should sit in a separate entity, citing New Jersey's revised LLC act and warning against running it as a shell. The contract section isolates three clauses in a 31-page subcontract: pay-if-paid, broad indemnity and uncapped delay damages. Each gets its legal effect and a proposed revision, with the state's prompt payment statute cited for timing. Williamson and Malhotra and Lumineau connect contract design to a lasting relationship.
Reading the DBA 8070 Module 2 grading rubric
Mentors grade this assignment on correct legal analysis, a reasoned choice of business form, careful reading of contract terms, scholarly and legal support and clear writing in APA style. Choosing a form for reasons specific to the venture's risks earns more than listing the features of each form. Identifying the clauses that carry real risk, and explaining their legal effect, shows practical judgment. Precise citation of statutes, with no overstatement of what they guarantee, shows legal literacy. Bringing in research on contract structure and relationships answers the course's call for an academic as well as practical approach. Proposed revisions that a general contractor might accept show negotiating sense as well as legal knowledge.
Common DBA 8070 Module 2 mistakes, and how to avoid them
Students lose marks by describing every business form in turn without choosing, by recommending an LLC with no reason beyond popularity or by summarizing a contract instead of analyzing its risky terms. Some overstate statutes, for example claiming a prompt payment law guarantees payment. Pick a real venture and identify the risk that drives the choice of form. Choose two or three contract clauses that matter most, explain their effect and propose specific revisions. Support the analysis with the textbook, a statute and one research article. A free first draft of your DBA-8070 Module 2 assignment can be built on your own venture or contract. Quote the exact contract language you object to before proposing replacement wording, so the revision is clear.
Write yours, or have the desk draft it
This paper is an original model document written by our desk, not a submitted student paper and not an official Thomas Edison State University document. Read it for the moves, then write your own to the instructions in your classroom. If you want one built to your exact prompt and rubric, the first custom sample is free and arrives in 24 to 48 hours.
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DBA 8070 Module 2 questions, answered
Where can I find a free DBA 8070 Module 2 sample paper?
The paper above chooses an LLC for a millwork maker's installation business and reviews a hospital subcontract's payment, indemnity and delay clauses.
What is the difference between pay-if-paid and pay-when-paid?
Pay-if-paid makes the owner's payment a condition of the subcontractor's payment, while pay-when-paid only sets timing and usually requires payment within a reasonable period.
Why form an LLC for a risky line of business?
It separates that line's liabilities from other assets and allows pass-through taxation and flexible management, if run as a real separate business.
What should a subcontractor negotiate in an indemnity clause?
Indemnity limited to claims caused by its own negligence, in proportion to its fault, rather than any claim connected to its work.
How is DBA-8070 graded?
Twelve discussions 48 percent, four written assignments 20 percent, two synchronous events 12 percent and the final project 20 percent.