International Business Law

GMDGBS206 International Business Law

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Introduction

In this report, these scenarios pose legal and strategic questions based on contract law, intellectual property, and corporate disclosure. The report’s Part 1 analyses the conflict of interest between Ellie and Memoona regarding the contested ownership of an unappreciated painting. This segment takes a look at elements of offer and acceptance, capacity, consideration as well as the effect of unilateral mistakes in contract enforceability. We also look at Memoona’s decision not to pay for the services of Eric Suppliers Ltd for substandard work that was produced in their account of the loss they incurred when an art show they were to exhibit was cancelled. In Part 2, specific information and solutions about how Hiades Ltd’s innovative software should be protected will be presented: the only kinds of protection, such as copyright and patents, which could be applied to software; and the best ways to receive protection against unlawful use from various countries. Lastly, Part 3 assesses the legal perspectives of the Death Star Group, Ltd concerning climate change issues and their effects including providing the financial impact of changes that have been insisted upon by shareholders. This section attempts to analyse the legal and reputational implications of increased transparency especially given the fact that such disclosures are not common in the sector. The report contains detailed information regarding the legal aspects and recommendations regarding the legal issues that apply to the particular cases in question.

Part 1: Legal Issues and Advice

1.a. Legal Issues Between Memoona and Ellie

1. Offer

An offer refers to a definite communication of intention by one person (the offeror) to another (the offeree), to be legally responsible for the proposed contract upon the recipients’ acceptance. It has to be communicated clearly and the statement has to be made to give rise to a legal right.

Case: Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256

The English contract law case of Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 is a landmark decision that established the notion of an advertisement as an offer to the world. In this regard, advertising published by the Carbolic Smoke Ball Company stated that it would pay £100 to anyone who used its product as directed but still contracted influenza. The firm said it had deposited £1,000 in a bank to show their intent. Details: After using the smoke ball as directed by its manufacturers, Mrs. Carlill came down with influenza and subsequently claimed compensation for the reward (Kuhnel-Fitchen and Hough, 2017).

Scenario Analysis:

It can be said that Memoona indeed creates a valid offer with the price of £5,000 for the painting as the proposition can be easily understood by a reasonable person due to its definiteness. The problem here is whether Ellie’s acceptance is enforceable or not especially concerning the change in the value of the painting (Crawford and Bogatin, 2022).

2. Acceptance

In regards to offer acceptance, acceptance is defined as the complete agreement to the terms provided about the offer. It must be communicated to the offeror and in return must not be dissimilar from the offer made.

Case: Adams vs Lindsell [1818] 1 B & Ald 681

This case set out what is popularly referred to as the ‘postal rule’ which means that acceptance is constituted when the offer was posted not when it was received (Sage, 2020).

Scenario Analysis:

Memoona’s offer can be accepted through a reply to a text message from Ellie is valid acceptance. The postal rule does not apply because the acceptance was made through an electronic means, not through the post. That is why the formation of the contract took place when Ellie sent the text message.

3. Capacity

On many occasions, the wording of the capacity is used to explain the potential of an organisation or an individual to be bound by a contract. It also aims at the parties to a contract to be of legal capacity, of sound mind, and if not, not disqualified.

Case: Coutts v Street [1833] 10 Bing 372

Concerns of this case touched on mental capacity while it affirmed that contracts entered by parties with mental capacity are voidable (Barker, 2020).

Scenario Analysis:

Simultaneously, it seems that both the parties, Ellie and Memoona, can contract. From the given scenario no evidence demonstrates that any of the parties involved in the contract is mentally incapacitated or does not have legal capacity to enter into the contract.

4. Consideration

The parties to the contract offer, pass, or receive in exchange for something of like value, is considered as consideration. It has to be sufficient to perform the required operations but it doesn’t need to be adequate to create profound, scientific theories.

Case: Thomas v Thomas [1842] 2 QB 851

In this case, it confirmed that consideration must be adequate but does not bear to be equal (Hoekstra, 2021).

Scenario Analysis:

Memoona offered £5,000 to Ellie which Ellie accepted and thus, it is a good consideration. However, the question which arouses arises here is whether the consideration is worthy of the painting or not once the painting’s real identity a Rembrandt is worth it (Borenius, 2022).

5. Intention to Create Legal Relations

The intention to create legal relations means that parties must intend for their agreement to be legally binding. In commercial agreements, this intention is usually presumed.

Case: Edwards v Skyways Ltd [1964] 1 WLR 349

This case said that business transactions imply assumed legal relationships as the basic rule (Khan, 2019).

Scenario Analysis:

Memoona and Ellie’s communications are businesslike as the aim of the process is a possible exchange of a valuable painting for money. Thus, the legal requirement known as ‘intention to create legal relations’ is met.

6. No Vitiating Factors

Contracting under duress, undue influence, False representations, and mistakes also have a presumption of resulting in a contract’s invalidity (Verstappen, 2023).

Case: Raffles v Wichelhaus [1864] 2 H & C 906

This case was about a mistake shared by the parties over the object of the contract hence making it a void contract.

Scenario Analysis:

Ellie’s failure to return the painting after learning about its higher value might also be an unjustified mistake regarding the painting’s value. However, if Ellie did not make the mistake because of any misrepresentation by Memoona then that does not necessarily mean that the contract is void. Li discusses that the contract stays valid and binding as long as there is no mutual mistake.

Conclusion for 1. a:

It can however be seen from the argument that Memoona has enough ground to establish a breach of contract. Ellie was correct in accepting Memoona’s offer which meant that the formation of the contract had been made. Finding that the painting is worth more than she calculated does not free Ellie from the duties provided under the contract unless there was a vitiating factor involved.

1. b. Legal Advice for Memoona and Eric

i. Advice to Eric Regarding Payment Dispute

Discharge of Contract

Discharge of a contract is defined as the release or release of the contractual duties of both parties that entered into the contract. There are four ways through which it can happen, being through performance, agreement, frustration, and breach (Carter, Courtney, and Tolhurst, 2018).

Types of Discharge:

• Performance: They convey the message that all the anticipated project requirements will be met and all the agreed-upon terms implemented to the letter.

• Agreement: Consent of both the parties involved to dissolve the contract.

• Frustration: An event occurs that saves performance.

• Breach: It is having a tendency not to fulfil contractual obligations.

Scenario Analysis:

Mr. Eric successfully and on time, installed the heating system necessary for the house while he did not paint the house as agreed by purchasing the wrong type of paint to paint the whole house in one week. Memoona is entitled not to pay back since the painting work is faulty.

Legal Principles:

• Substantial Performance: Where a party has significantly complied with his or her responsibilities, they can claim their payment which can be reduced for any lack of quality with the good (Coviello et al., 2018).

• Rectification: It is stated that the work which has been disputed can be corrected and the contract as envisaged, can be fulfilled.

Advice:

Eric should apportion that he did a considerable performance of the contract broken down into offering to solve the defective paint problem. The problem can be resolved either by a decrease in payment or a partial reimbursement, which can be proposed by Eric. This is so because if substantial performance can be established and the defect is capable of remedy, Memoona has not been completely justified in refusing to pay the full amount of the contract price.

ii. Memoona’s Guidance about Loss of Income Application

Legal Issues:

Memoona’s claim for £ 500, 000 as a loss of income involves proving that the said breach put her at the loss.

Damages for Breach of Contract:

• Remoteness of Damage: These losses have to be predictable and directly consequent to a breach.

• Quantum of Damages: It should state to actual loss suffered and be realistic in its valuation of the damages claimed (Kull, 2020).

Scenario Analysis:

Memoona will have to prove that the loss of income was a reasonable consequence of Eric’s default and that she made reasonable efforts to mitigate her damages, such as looking for another place or trying to use the basement after all.

Advice:

Since it was not a financial breach, Memoona has to prove that she lost money and that the breach was at least partly responsible for the exhibition being cancelled. She also needs to show that the loss should have been reasonably expected and that she took steps to lessen the harm. The case will then move on to the High Court which has a financial list that looks at whether the loss is caused by breach also if the pleaded figure is too much (Green, 2017).

Conclusion for 1. b:

Eric should offer to rectify the defect or negotiate a partial refund, arguing substantial performance. Memoona should focus on proving that the breach caused the financial loss and that the claimed amount is reasonable and directly linked to the breach.

Part 2: Software Protection for Hiades Ltd

Specifically, Hiades Ltd, after having designed an original technological device, is going to find out that the protection of its IP is not a plain path, more in international markets such as the USA. Unlike typical software which may be limited to regional use this software provided to the European Port Authorities may qualify for unauthorised usage owing to the globalisation of the digital front (Sergi and Reid, 2021). In Europe, copyright covers all the source codes, the designs, and the structure of the software, and the moment one creates this, it is protected automatically. However, it may turn out that in some countries, for instance, the USA, the mentioned protection shall not be sufficient due to the differences in the IP laws. In the USA, while there is the protection of copyright, Hiades may have to even go the extra step of registering the software by law to enhance the enforcement aspects that are available like statutory remedies in the event of an infringement. The company may also experience a challenge in seeking patent protection since one cannot patent software in the USA unless the software possesses technological advancement (Lefstin, Menell, and Taylor, 2018).

a) Kinds of Software Protection

There are several methods Hiades can use to protect its software worldwide:

• Copyright: Software in Europe is normally governed by the copyright law. It is over the source code, the design, and the structure of the program that protection under copyright law is given. It affords an instant shield as soon as the software is developed without the necessity of registration in many countries. However, in the USA, both the copyrights have to be adhered to, while Hiades may wish to have a formal copyright registration to expand on enforcement measures as well as to seek statutory remedies in case of infringements (Rosenmeier, Szkalej, and Wolk, 2019).

• Patents: Comparatively, the process of claiming protection through a patent may be a little more intricate when it comes to software but it affords an even more substantial degree of protection to that which is peculiar in the operations of the software offering a certain distinct algorithm. Software patents are possible in the USA as long as the software meets certain stringent requirements which have to do with the fact that the particular technology is new, non-obvious, and useful. Nonetheless, software patents are relatively difficult to secure in Europe compared to other regions because of Europe’s patentability criteria, especially under the EPC (Pressman and Blau, 2020).

• Trade Secrets: It must also be noted that trade secrets can be claimed on aspects of the software that might not be easily voiced out; for instance, in areas of proprietary algorithms or other technical expertise held by Hiades. But for the company to sustain trade secret protection, the company has to make sure that there are strong confidentiality measures and security features to avoid leakage (Wexler, 2018).

• Licensing Agreements: Hiades should ensure that comprehensive licensing policies that outline the usage of the software are put in place. This can afford legal solutions to make it impossible to restrain its use and to give mend in instances of violation (Brier Jr, 2017).

b) The Legal Strategies on Hiades

To protect their software globally, Hiades should:

• Register Copyright Internationally: Therefore, via the Berne Convention, Hiades’ copyrights are protected in more than one hundred and seventy countries. However, for better protection, it is recommended to Register of Copyright in the USA which will allow the company to seek damages and initiate legal proceedings (Ricketson and Aplin, 2020).

• Patent Key Features in the USA: If in Hiades’ software, there are unique characteristics that can be patented, then it is recommended that the company file patents in The United States of these inventions. This would retain the unique technical features and prevent other players in the market from adopting similar technology (Terlizzi, 2020).

• License Enforcement: Hiades should consider implementing licensing agreements against firms that are utilising the firm’s software without consent. This could involve sending threatening letters, writing to the site’s maintainers to force the takedown of specific content, or, when no other action works; instituting a lawsuit (Curtis and Avi-Yonah, 2023).

• Monitor Global IP Infringement: Hiades should be able to employ legal advisors globally to ensure the organisation conducts a constant check of any violations of IP and to conduct immediate enforcement measures where necessary. It will assist them in dealing with infringements in those markets, particularly the USA, upon engaging in international legal networks (Bagley, 2017).

Putting into use international copyrights, applications for patents, use of trade secrets, and powerful licenses, Hiades can attain optimum levels of protection for their software across the hemispheres.

Part 3: Legal Issues and Advice for Death Star Group, Ltd

In this case, the legal matters concerning Death Star Group, Ltd include corporate reporting, environmental reporting requirements, and investor relations. This pressure from the shareholders about the need for more extensive climate risk information affects the compliance issues of corporate governance laws and the developing international standards in environmental, social, and governance reporting (ESG) (Gadinis and Miazad, 2020). For instance, rules like the UK Companies Act 2006 focus on the corporates’ practices of disclosures, and the TCFD (Task Force on Climate-related Financial Disclosures) imposes disclosure of material risks, including risks like climate that could undermine the endurance of businesses. The key focus for Death Star Group, Ltd is whether or not they are mandated by the law to report some climate risk if the information is still under construction. The company’s reporting team for instance has pointed out the failure of adequate climate risk assessment, meaning that the company may present inconclusive or inaccurate disclosures hence making them liable to litigation or fines.

Advice on Disclosing Climate Risk Information

Frank disclosure of climate risks and their financial implication would be legal for Death Star Group, Ltd as well as would help enhance the organisation’s reputation (Scanlan, 2021). While other aerospace firms may not be reporting this information, there is an increasing trend around the globe where firms are required to reveal the ESG factors. Through the evaluation of climate change and ensuring realistic disclosures, Death Star Group, Ltd would be fully compliant with the investor's expectations and thus reduce possible legal actions in the future. Besides, by engaging in proactive disclosure, companies can build a good reputation of sustainability and corporate responsibility in contrast to their counterparts. Such non-disclosure may lead to the loss of investor confidence and permanently damage the company’s image. Therefore, the information that the subject requested should be provided while simultaneously presenting the high quality and accuracy of the data.

Conclusion

From dealing with the legal and business issues raised the importance of transparency, compliance, and sound corporate governance hold centre stage in companies especially those operating in the current global business environment. For Hiades Ltd the challenge now lies in ensuring that its intellectual property is defended internationally, especially in markets such as the USA where access to software without prior permission reduces the company’s market muscle. Having been supposed through legal measures such as copyright law, patent, and licensing agreement, Hiades can ensure the protection of its innovation and at the same time enter the international market. In the same way, the strategic management and planning of Death Star Group, Ltd has to consider the pressures from the shareholders while at the same time ensuring they meet legal requirements and manage their reputation. Although the act may pose the company to external insurgents’ perceptions of it as susceptible to climate risks, the same process will serve as an assurance to internal insurgents who will view the same strategy as a way of embracing global ESG standards thereby building investor confidence. Inaction may result in legal implications as well as harm to the reputation of the company. In the long run, both cases underline the significance of the correct legal approach, risk evaluation, and successful corporate governance in a world that is evolving into a more stringent and focused market.

References

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