Level 5 Assignment Guide 2024-2025 - International Business Law

Level 5 Assignment Guide

2024-2025

INTERNATIONAL BUSINESS LAW

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Part 1: Contractual Issues

1.a. Ellie and Memoona's Transaction

Legal Issue:

The crack of the legal issue to be addressed is whether Ellie had to sell the painting to Memoona after she realized the actual value of the art piece. The discussion will center on the aspects of creating a legal relation through a contract, including offer and acceptance, consideration and likelihood of mistake in contract law, and the common remedies for Memoona if Ellie does not sell the painting.

Contract Formation: Offer and Acceptance

Also, legal consideration is a legal requirement for a contract but it must meet the requirements of an offer, acceptance, and an intention to be bound. In this instance, Memoona bid £5,000 for the piece and Ellie sold the painting via text message on the same. A contract by text message is legally enforceable under UK law since section 2 of the Statute of Frauds 1677.

For example, Ellie’s acceptance of the painting by text: means creating a binding contract, and the subsequent realization of the painting’s growth in value does not cancel this acceptance. Referring to a case known as Gibson v Manchester City Council [1979] 1 WLR 294, there are three essentials for concluding a contract, firstly, the acceptance must be valid; secondly, the terms of the contract should be clear; thirdly, it should be clear that the parties intended to create legal relations (IPSA LOQUITUR, 2020).

Consideration
In other words, consideration is the inducement given or the reward offered by one party received by the other in the contract. At the time of the contract, Memoona had offered £5,000 as a valid consideration. Ellie’ll learn that it was worth far more later but that does not erase the contents of the original contract. The rule of consideration cogently states that the courts do not consider whether the consideration is equivalent in value to the object of the contract, so long as it has some value (Chappell & Co Ltd v Nestle Co Ltd [1960] AC 87) (All Answers Ltd, 2023).

Mistake in Contract Law

However, a contract is void or voidable if made under a misconception of fact relating to the substance of the contract. More to the point, in this case, Ellie had no idea that the painting in question was worth millions. As provided by UK law, a mistake must be mutual or common to render the contract void (Bell v Lever Bros Ltd [1932] AC 161) (?Harris, 2020). That is because the error was unilateral with only Ellie giving a wrong impression of the value, the contract shall therefore be given. In Smith v Hughes (1871) LR 6 QB 597 it was ruled that where one party made a mistake as to the value of the thing with which he was dealing, the contract was not usually void unless the other party to the bargain knew that the former was mistaken and intended to take advantage of him (Dempster, 2022).

Remedies for Memoona

Memoona who may be expecting to enjoy the fruits of the sale from Ellie may opt to sue her for breach of contract in the event she refuses to sell, Memoona could sue for the total amount that was agreed to be paid for the painting less the market value of the painting at the time of the breach (Robinson v Harman [1848] 1 Ex 850) (Team, 2020). Or she may seek an order of specific performance, an order that will compel Ellie to discharge her contractual obligations, since paintings are unique goods the remedy of damages will not suffice (Sky Petroleum Ltd v VIP Petroleum Ltd [1974] 1 WLR 576) (?Griffin, 2022).

1. b. Memoona and Eric Suppliers Ltd

Legal Issue 1(i): Breach of Contract - Defective and Delayed Work

Memoona engaged Eric Suppliers Ltd for the painting work but Eric effected delivery of the work in an untimely and substandard manner. This is a violation of contract under UK law because where one performs differently from the agreed specifications there is a breach. Late completion and defective work are two main types of breach in this case.

Breach of Contract

It might be suggested that according to Memoona, Eric has breached the contract through his late and defective performance (DiMatteo et al., 2021). Better known as ‘the merchantability of goods,’ the Supply of Goods and Services Act was amended in 1982 and requires service providers to do the job right (Littlechild, 2021). Next, failure of these obligations permits Memoona to seek damages as a result of the breach in line with the case legislation of Bolton v Mahadeva [1972] 1 WLR 1009 (Jstor.org, 2024). If time had been of the essence in the contract, Memoona was in the position to cancel the contract due to late completion. As held in Charles Rickards Ltd v Oppenheim [1950] 1 KB 616, when the time fixed by the parties has not been obeyed, the aggrieved party may wrongfully terminate the contract (Legalmax.info, 2024).

1. c. Contractual advice for Memoona

Memoona can pursue several remedies in response to Eric's breach, including:

• Damages: Memoona can claim damages to recover the costs of the defective work and the costs for properly correcting it (Ruxley Electronics and Construction Ltd v Forsyth [1996] AC 344) (Zlatev, 2020).

• Repudiation: In the case Memoona deems the breach to be a material one the contract may then be terminated and Memoona is entitled to refuse performance. As for the actual losses Memoona would be entitled to recover any losses incurred by the termination of the contract (Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26) (Pak, 2021).

• Specific Performance: In rare circumstanced, Memoona may seek a court order for Eric to perform the work in terms of the contract but such is rare for defective service contracts.

Legal Issue 1(ii): Memoona’s Claim for Consequential Loss

Memoona wants to claim £500,000 for lost income from the canceled exhibition because of the faulty work done by Eric.

Consequential Loss

Consequential losses are recoverable under contract law provided the party suffering the loss fails to mitigate their losses and such loss was reasonably foreseeable at the time of entering into the contract. In Hadley v Baxendale [1854] EWHC Exch J70 the following legal principles were developed; losses that are present must be demonstrable as reasonably foreseeable that is, as likely to arise naturally as a result if the breach or deemed to be within the reasonable contemplation of both parties at the time the contract was entered into (Justia Law, 2024).

For Memoona to receive £500,000 lost in exhibition income the party has to prove that this loss was reasonably foreseeable when the contract was being formed. If Memoona had told Eric that the completion of the painting was important for the exhibition then he could not be absolved of an anticipated loss (Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528) (Deanslawdictionary.com, 2024).

Mitigation of Loss

Memoona has a responsibility to advance and protect her interests to limit the consequences arising from Eric’s failure to perform. According to British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673 Memoona should prove to the court that she did everything within her power to minimize her loss such as looking for other venues or could have used her basement to display her articles (Austlii.edu.au, 2014). Of course, if Memoona was unable to try to avoid her losses, she may be restricted to the amount of damages that can be recovered.

Part 2: Intellectual Property

Hiades Ltd’s Software Protection

Legal Issue:

Hiades Ltd seeks legal advice concerning their software, protection outside their jurisdiction and the issue of piracy. This includes copyrights, patents, trademarks, and trade secrets to mention but a few in addition to the enforcement options in place.

Copyright Protection

The major form of protection for software is copyright law which, gives the creator of the work the exclusive right over the original work. In Europe, the Copyright directive (2001/29/EC) regulates the protection of copyright, including computer programs as most original literary works. This protection is acquired upon generation and does not call for registration, according to the provisions of the Computer Programs Directive (2009/24/EC) (Ferri, 2020). Therefore, Hiades Ltd has copyrights in their software from the time it was created to ensure they regulate the duplicate, circulation, and modification rights.

In the world’s arena copyright protection is enhanced by treaties such as the Berne Convention and trade-related aspects of intellectual property rights-Trips. According to TRIPS, members have to guarantee a basic level of protection that will allow Hiades to seek protection across borders (Trimble, 2021).

Alternative Protections

In addition to copyright, other forms of IP protection exist, including patents, trademarks, and trade secrets:

1. Patents: This means that certain parameters of software can be patented provided these software have to meet some requirements such as novelty, nonobviousness, and having some utility. The Alice Corp. v. CLS Bank International [2014] made a cognitive thought that abstract ideas, including some of the software methods, cannot claimed for patentability (Whalen and Zingg, 2022). Nevertheless, in European countries, the European Patent Convention (EPC) permits the registration of inventions, emanating from computers, software, or the internet provided they have a technical outcome and impact. Consequently, Hiades Ltd must determine whether the implementation of their software contains such innovations which could warrant a patent (Rudzite-Celmina, 2023).

2. Trademarks: It covers every mark, symbol, logo, or brand name connected with the software. This protection can increase brand awareness and also ensure that no others use similar signs that may confuse. To protect these rights, trademarks can only be registered and enforced after they have been so registered (Tsaroucha, 2023).

3. Trade Secrets: It refers to confidential information that gives the business enterprise an edge over its competitors. This encompasses routines, programming codes, or techniques used in business as well as on websites (Rudzite, 2022). Unlike patents, trade secrets do not require legal protection, however, they have to be protected using legal disposition and security. The Trade Secrets Directive (2016/943), as it is stated above has provisions on legal redress for misappropriation.

Comparison of Copyright Protection: Europe vs. The U.S.

Even though Europe and the U.S. afford protection of copyright in software, some variance exists in the coverage and period of this protection. When it comes to the protection term, in the United States, and other countries following the same regime, authors’ rights expire 70 years after the death of the author, while in Europe it is 70 years too, however, additional rights may be given to producers or employers. Moreover, persuasively, the U.S. offers more leeway on the fair use act thus may hamper Hiades Ltd from implementing its copyright law when users advocate that they are in the fair use category when using the software. On the other hand, the European approach protects the moral rights of authors, which protects the authors’ relation toward the work (Sganga, 2021).

Enforcement Options

To address unauthorized use, Hiades Ltd has several enforcement options:

1. Cease-and-Desist Letters: This is the preliminary measure that has to be taken when attempting to safeguard IP rights. A good letter may include information relating to the admitted violation and politely demand the undesirable actions be stopped. This approach may successfully be used to solve some of the contentious issues without recourse to the courts (Graham, 2023).

2. Litigation: It is, therefore, not out of the question for Hiades to take legal redress against the infringers in case initial plans do not work out. Review and analysis Legal lawsuits over copyright infringement are instituted in the courts to seek an injunction, damages, or statutory remedy as may be allowed by the laws of the country in question. There are strings attached to willful infringement, meaning one can be awarded lots of money in the United States as seen from Capitol Records, LLC v. In Thomas-Rasset [2009], the court awarded a lot of money for infringement of copyright by downloading (Graham, 2022).

3. International Licensing Agreements: To curb unauthorized use internationally, Hiades should embrace licensing internationally. They can set out the mode of use and even the legal relationship that will apply where breaches happen in other countries. Licensing not only safeguards the software but also brings in more cash inflows (Dratler, 2024).

Part 3: Corporate Governance

Death Star Group, Ltd’s Climate Disclosure

Legal Issue:

The current business problem of Death Star Group, Ltd. deals with shareholders’ requests regarding the provision of more detailed information on climate change risks. To this extent, the company is concerned with the negative impact that may accompany the release or non-release of such information and the difficulty in identifying accurate data for reporting.

Corporate Social Responsibility (CSR) and Legal Duties

Currently, corporations are personally liable for certain effects on the environment – and the climate, for instance. The EU Non-Financial Reporting Directive (2014/95/EU) requires large Public Interest Entities to report on non-financial information about Environmental, Social, Governance (ESG), and Climate-Related Risks (Hao et al., 2023). Although the UK has left the EU through Brexit, it remains to some extent aligned with current and previous EU legislation, for example with the Companies Act 2006 and the improvements that have been made since the breaching of the rules of the EU legislation (Sabia, 2021).

This section of the Companies Act also speaks to directors in the specific ways they need to conduct themselves responsibly, particularly in serving the interest of the company and its shareholders while taking into consideration other constituencies such as the environment. Unfortunately, investors and regulators have recently concentrated their attention on climate risks, and thus there are significant legal and ethical reasons for Death Star Group to report climate-related financial risks. This can be achieved through the provision of extra information, which conforms to the corporate governance standards due to the increased focus on risk reporting vis-à-vis the value of shareholders.

Reputational Risk

The loss of reputation that could be envisaged because of climate disclosure is indeed not negligible. If Death Star Group decides to report climate-related risks, it will attract criticism of its present activities and insufficient risk management systems. However, failure to report could cause much damage to the company’s reputation especially given that stakeholders are more concerned with sustainability. Such examples from the past include In re Walt Disney Co. Derivative Litigation [2005] which clearly shows how corporate governance and proper disclosure can become a thorn in the flesh of a company by denying shareholders their full desires and suing for it ? (Sale, 2022).

Further, as the concept of sustainable investing gains traction, then absence of the same also poses a threat to its position on the market, as some buyers might be blocked by such opaqueness of the firm. The Global Investor Coalition on Climate Change highlights in its report that investors are beginning to worth companies that offer information on risks associated with climate change, non-Nano, 69% of investors consider information on risks linked to climate change important for investment decisions (Gottardo et al., 2021).

Legal Compliance vs. Voluntary Disclosure

Although it is not mandatory to make elaborate climate reports for the company organized under the legal jurisdiction of Death Star Group, significant reasons and practices support the concept of ‘‘Extra-Official Statements’. The Task Force on Climate-related Financial Disclosures (TCFD) is a recommended format that helps companies report climate-related risks with relative ease and as like-with-like. According to the TCFD recommendations, the Death Star Group can improve its rating and meet investors’ expectations and trends in reporting companies worldwide (Cazzagon et al., 2022).

Voluntary disclosure may also reduce legal exposure to failure to observe compliance with existing revealed regulations or shareholder pressure. Those who engage themselves in the disclosure of material information that can be useful for others usually are put in a better place in the market of securities and provide trustful relations with the other participants.

Best Practices

Because of these challenges, for Death Star Group to deplore itself in the complexities, there is a need to operate within the tenets of corporate governance and sustainability reporting. The TCFD framework emphasizes four core areas: governance, strategy, risk management and KPIs and targets. Such practices can ensure that it achieves structured disclosure and also assist in the management and control of climate-related risks.

Moreover, the use of currently popular international reporting guidelines, such as the GRI or the SASB, will also improve the level and comparability of reporting and may provide relevant information to decision-makers in attributing a common set of figures (Goswami et al., 2023).

Therefore, while making its disclosures Death Star Group, Ltd. is facing legal requirements specified by existing regulations, as well as potential reputational risks of both reporting and failing to report any issues. In this way, the company can improve the corporate governance structure, using shareholders’ concerns to take timely action and conform to the best practices in climate reporting at the same time develop trust and create long-term value within the current sustainability-focused market.

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