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Unit 26 Assignment on Business Law
In this Unit 26 Assignment Business Law business is essential that a person must comply with the law of the land. In absence of compilation, the activities undertaken are considered to be unenforceable and void resulting in great hardship to parties. Thus, through this assignment various laws are understood so as to bring basic legislation to the knowledge of the readers. The legislation that are covered under the assignment help are the Sales of Goods Act 1979, The competition Act 1987, European Union law, anti-restrictive policies, monopoly policies, unfair terms, aw of agency, intellectual property law etc. Several practical analysis are undertaken to have a clear understanding of the laws.
1.1 Apply the legal rules on implied terms relating to the sale of goods and supply of services
In United Kingdom, Section 20 of the Sales of Goods Act 1979 (ACT) submits that the goods are assumed to be at the risk of the seller unless the same are transferred or delivered to the buyer. The general presumption is that the risk of the goods remains on the person who is in the possession of the goods. However Section 18, Rule 2 & 3 submits that the buyer is not at the risk of the goods until the goods are in deliverable state or the price is paid and he has knowledge of the same unless contrary is established by the parties (section 17 and 19 of the Act). (Insite law, 2014)
As per facts, John agreed to buy the car of Emmanuel provided John himself carries out repairs on the car engine. John and Emmanuel agreed and gave 20% of the price as deposit money. However, Emmanuel carried out repairs and prior informing the same to John, the car was destroyed in Fire in the garage of Emmanuel’s. John was not insured and demanded money from Emmanuel for non-delivery.
Since the car was in possession of the Emmanuel and he Emmanuel does not inform John that the car is in deliverable state after conducting repairs, thus, the risk remains at the seller though amount is paid by John. Presuming that the ownership transferred only when the goods are in deliverable state and the buyer gets notice of the same, it is submitted that John has right to claim his money back and terminate the agreement.
1.2 Apply the statutory and possession
Joe had 500 computers in his stock. He sold 200 computers to James, 200 to David and 600 to Paul. All the buyers paid Joe in cash (advance prior to delivery) and none of the buyer was aware that the stock was limited with Joe. But prior to any delivery the business of Joe collapsed and a receiver was appointed.
Now, James, David, and Paul are claiming the computers they had bought from the receiver.
Initially as per section 16 of the Act submits that when a contract for unascertained goods is made than no property in the goods are passed unless the goods are ascertained. Then an amendment is made in 1995and section 20A was inserted and submits that when goods are transferred in an undivided bulk to the buyer than the buyer becomes the owner in such undivided bulk. (Sales of Goods and agency, n.d)
Thus, receiver must after settlement must proportionately distribute the goods to James, David, and Paul.
1.3 Evaluate remedies
Rachel and James went for dinner at “Fox on the Hill”. James bought drink for Rachel. Rachel consumed half of the drink and discovered some foreign particles in the drink. She became ill and is under continuous treatment. The bottle of the drink has no identification marks on it to determine who the manufacturer is.
- Rachel can seek Remedy under the Consumer protection Act 1987 for the damages seek as per section 45 (1) of the Act. She can claim damages for the loss suffered to her. Since no identification marks is mentioned on the bottle so, she can claim against the first importer who has imported the goods with the country under section 2 of the Act. She can also claim against the supplier of the product (that is restaurant) if the supplier fails to identify the importer within reasonable time. (McConnell A, 2004)
- If George is the manufacturer of the drink, than, Rachel will sue the manufacturer of the goods directly as per section 1 (2) of the Act.
- Buyer can seek remedy under section 45 (1), section 5 (1) of the Act and Seller can seek remedy under section 4 of the Act by relying on defences available. (McConnell A, 2004)
1.4 Apply product liability statutory provisions
In United Kingdom, Product liability is defined in Supply of Goods and Services Act, 1982 and signifies the imposition of civil liabilities on the suppliers, manufactures etc. for the personal injury that is cased because of the faulty goods supplied. The Sales of Goods Act 1979 have incorporated some of the implied terms in sale contract. Section 14 submits that if the goods are sold than it must fit the purpose of the buyer and must be of adequate quality. The concept was expanded to the Sale and Supply of Goods to Consumers Regulations 2002. The Act submits that in order to analyse whether the goods are of quality accepted by the consumer, it is necessary that relevance must be provided to any public statements that are made which includes brochures and leaflets. If the goods supplied are in contravention to the statements made in public statement then the aggrieved party has the right to cease the contract and claim damages. (McConnell A, 2004)
Thus, Rebecca was staying in a hotel in Greece which is described in the brochure of David. She fell through plate-glass balcony doors and sustained serious injuries. She claims damages against David.
It is submitted that as per the provisions of Sale and Supply of Goods to Consumers Regulations 2002 Rebecca is entitled to damages as the quality does not correspond to the submission made in the brochure.
2.1 Differentiate between types of credit agreements
The Consumer Credit Act 1974 the main kinds of credit agreements are. These are: (CCA, 2009)
First, Debtor –creditor agreement – section 13 of the 1974 Act defines the concept of debtor creditor’s agreement. These are those agreement which complies with section 11 (1) (c) of 1974 Act (restricted use) and are regulated agreements. These agreements are also captured within the scope of section 11 (1) (b) of the 1974 Act but there is no pre existing relationship amid creditor and supplier; Second, Debtor-creditor-supplier agreement - section 12 of the 1974 Act defines the concept of debtor creditor supplier agreement. These are those agreement which complies with section 11 (1) (a) of 1974 Act (restricted use) and are regulated agreements. These agreements are also captured within the scope of section 11 (1) (b) of the 1974 Act but there is a pre existing relationship amid creditor and supplier;
Now, John was granted a loan of £10,000 from a Bank to buy a car. The loan was for 5 years, with equal monthly instalments of £200.00 per month. John met a girlfriend and decided to use the money for holiday. Bank became aware and decided to terminate the agreement.
In such circumstances, bank has the option to terminate the agreement however; he has to comply with the provision of Section 87-89 of the Consumer Credit Act 1974. (SLJ, 2007)
If the £10,000 is used for the purchase of a Honda Accord, 2.2i and John made fault in making of payment than Bank can also seek possession of the car provided John has paid less than one third of the debt due but a proper court order as per section 90 of the Act is required if the instalment paid is more than one third of the debt. (SLJ, 2007)
2.2 Apply rules, termination rights and default notices
In United Kingdom’s, one of the form of credit agreement is Hire purchase agreement. In such agreements, it is the creditors who are considered the owner of the goods provided all the money is paid by the debtor to the creditor. When the agreement expires the debtor has the option to return the goods or purchase them. (Stephensons, n.d)
Whenever the creditors wants to cancel the agreement or wants to reposes the goods than he is obligated to comply with the requirements of demand notice as specified under section 87 - 89 of the Act. (SLJ, 2007)
However, as per the Section 90 of the Act, if the debtor has paid more than third of the entire debt than the creditor has an obligation to get a court order so as to reposes the goods from the debtor. If the creditor does not fulfil the requirement than severe consequences may be faced by him as per section 91 of the Act, such as the agreement stands discharged and there are no liabilities that can be imposed on the debtor and is also becomes entitled to recover all money that is paid by him to the creditor. The debtor may also seek compensation from the creditor.
But, if the instalments paid are not more than third of the money due, than the creditor only needs the order when the goods are o possession of the debtor and wants to remove from the debtors’ possession. But of the goods are at public place than no court order is required. (SLJ, 2007) Thus, it is submitted that Ali has paid 20% of the agreement along with 3 years of instalments. Thus he has already paid more than third of the hire purchase money. Hence, Brit College has to comply with the requirements of default notice and seek court order prior recovery of the car. If the court order is not sought and the car is reposes by the college than the agreement stand terminates and Ali is no longer liable to pay any instilments and can seek compensation as well.
2.3 Differentiate between the different types of agent
The statement made by Lord Denning MR in Hely-Hutchinson v Brayhead Ltd and Another (1968) has made an attempt to define two types of authorities. That is Actual express authority and actual implied authority. These authorities can be evaluated with reference to agency creation and Agency Authority. (SAFLII, n.d)
Mainly, express authority implies that the authority that is furnished upon the agent is expressly allocated by the principal, whereas implied authority submits that the agent has acquired the authority not expressly but by implication from the principal. (Birds J, 2010)
When the actual authority is evaluated with reference to agency, it is submitted that the in the law of agency actual authority is established by the principle and the agent with the help of an agreement to which they are parties. Through the agreement two types of authorities can be generated, these are agency creation and agency authority. (The Law Teacher, n.d)
Agency Creation is a kind of express authority which is created expressly by the principles, such as, when the board of director pass a company resolution in which they authorizes a company director to provide work for architects. Whereas Agency Authority is a form of implied authority when the agent assumes the authority by the conduct of the principal such as when the company board employ one of the director as MD which implies that he has authorizes of an MD and thus agency is created by authority. (C. Shum, 1989)
2.4 Evaluate the rights and duties of an agent
In United Kingdom, there are several rights and duties that are allocated upon the agent. The same are: (Letlink, 2006)
- An agent has a duty to comply with the directions of the principal and if he does not follow the instructions then he has violated his duty of obedience and any loss that generated from such disobedience will fall upon the shoulders of the agent. The agent may at times uses discretion provided the same is reasonable (Boden v French (1851)
- An agent must carry out his duties in careful and skill full manner. If breach is caused and loss is sustained than agent can be made liable for the same. The duty is regarded as a term and not a s condition as per section 13 of the Supply of Goods and Services Act 1982m(Hellings v Parker Breslin Estates (1994);
- When agent is authorized to manage the property then he has the duty to maintain repairs of the same.
- The agent has a fiduciary duty imposed under law;
- The agent has a duty not to delegate his responsibilities;
- An agent has a duty to account ;
- An agent has a right to receive remuneration for authorized transaction. If any unauthorized transaction is carried out than the agent can only claim remuneration if the same is approved by the principal;
- Any expenses incurred by the agent must be reimbursed by the principal;
- An agent has a right that he must be indemnified by the principal provided the loss is not sustained by agent own fault, that is, disobey of instructions, defaults etc.;
Thus, these are the general rights and duties that are imposed upon an agent.
- Paul (principal) asked Joseph (Agent) to find a Second hand car free from accidents.
Joseph found a car and noticed that part of the car had been repaired, but he failed to find out if the car has been involved in an accident and recommended to Paul.
It is submitted that Joseph has a duty to follow the express instructions of Paul and since the same is not carried out, Joseph has violated his duties of care and skill and obedience and thus must face consequences for the same.
- Joe (Principal) expressly agreed to employ Jude (agent) for 10 Years. After 4 years, Joe’s factory was destroyed by storm which marked the end of his operation.
In such situations, Jude is authorized and has right to seek indemnity from Hoe and seek adequate compensation for the same as the agency is terminated by no fault of Jude. Thus, he is entitled to seek compensation of such termination.
3.1 Outline monopolies legislation in the UK
In United Kingdom’s, monopoly is defined as a business strategy which has a market share more than 25 percentage. Since the market share is immense thus they abuse such power to their own benefit. One of the forms in which abuse is incurred is by way of anti-competitive practices. In order to curb these practices there are legislations that are granted. These are: (Tutor2A, n.d)
- Restrictive Trade Practices Act 1956 (goods);
- Monopolies & Restrictive Practices (Inquiry and control) Act 1948;
- Restrictive Practices Act 1976 (services);
- Monopolies & Mergers Act 1965;
- Competition Act 1980;
- Fair Trading Act 1973;
- Competition Act 1998;
- Telecommunications Act 1984;
3.2 Explain the role of the Competition Commission within the context of monopolies and anti-competitive practices and the UK Office of Fair Trading
In United Kingdom, laws are framed so that all such practices are barred which restricts completion and which are not favourable to the consumers. In order to do so an independent authority is framed by the legislation of the United Kingdom as the Competition & markets Authority (CMA) and was established after the merger of the Competition Commission (CC) and the Office of Fair Trading (OFT) and took office from 1st April 2014. (Seely A, 2014)
It is thus important to understand the role of the Competition Commission within the context of monopolies and anti-competitive practices and the UK Office of Fair Trading
The main role of the commission is to conduct enquiry and project report matters which comprises of anti-competitive practices, monopolies, performance of public sector units and mergers. The commission is not authorize to conduct any of its enquiries and governs under the order of the Secretary of state for trade and industry & Director General of Fair Trading. It is authorized to seek evidence prior making any decision. (Grant &Vidler, 2004)
Office of Fair Trading
The OFT was formed under the Fair Trading Act, 1973 and seeks to protect the competition of consumers. There are three main roles: (InBrief, n.d)
- The Office has the responsibility to enforce laws dealing with competition formulated by the UK or EU;
- The office has the power to regulate in such a manner so that unfair traders can be mitigated.
- It acts as a police to ensure that all the safeguards provided for the consumers are properly enforced;
- It must analyse the market so that proper regulations can be framed which curb the practices that are against the interest of the consumers;
3.3 Define dominant positions within the EU common market
As per the facts, British gas is the only industry that supplies gas in the United Kingdom. Consumers have been complaining over the past 5 years of exploitation by this single provider. Investigation by the office of Trade Fair reveals that prices charged by this company are above the true marginal cost of supply leading to excess profit being made by the company.
The functioning of the European union is governed by Article 102 of the treaty and submits that if any one or more undertaking who is at dominant position is abusing with the common market or its major part then such undertaking is not allowed and considered as unsuited for the internal market as far it has an impact on the member states. But the definition only considers abuse and does not barred the dominant position results in many difficulties. It was submitted by the court that: (Keystone 5, 2011)
- Considering the market share cannot be the basis of dominant position of an undertaking;
- Regard must be made to the influence that the undertaking persists on the market share and its function.
In United Brands v Commission (1978) it was submitted that a position is considered as dominant when the position of an undertaking holds economic power and which is used by it to avoid healthy competition and acts independently against its customers, competitors and consumers.
It is established that if any undertaking is found to be abuse of dominant position then financial penalty can be imposed upon such undertaking which may be up to 10% of the turnover that is produced by the undertaking worldwide. Guidelines under OFT 423 must also be followed.
Actions may also be initiated to cease the infringement. (Office of Fair Trading, 2004)
3.4 Consider the application of EU exemptions to potentially anti-competitive practices
Article 101 (1) of the treaty lays down restrictions and cartels and grants power to the European Union to inflict fines @ 10% upon such undertaking if such restrictions are violated. Any agreement that does not comply with Article 101 is void. (Reuters T, 2014)
Article 101 and Anti-competitive practices
Thus, can it be said that anti-competitive agreements are restricted as per Article 101 (1) of the Treaty on the Functioning of the European Union. The law submits that any agreement can be exempted from the application of Article 101 (1) of the Treaty on the Functioning of the European Union if the said agreement make additions to the distribution and production of goods OR endorse economic systems or technical development along with permitting consumers a good share of the gain achieved but which does not: (Reuters T, 2014)
- Inflict any limits which are not vital to the procurement of the objectives stated above and;
- Provide an undertaking to act in a manner which results in inflicting competition to major market products.
No formal approval or exemption is generally taken in order to impose legality on any agreement rather it is the undertaking themselves establish whether the agreement is in compliance with the requirements are not Also, if the agreements establish the BLOCK exemptions regulations than also such agreements are not construe to be in violation of Article 101. The restrict trade and anti-competitive agreements are mainly fits in the exemption requirements in order to considered as valid.
4.1 Identify differing forms of intellectual property
Intellectual property is the rights that are granted to safeguard the creativity done in many forms and to provide remedies when breached. The law is based on the principle submitted by Philosopher John Locke that every person has the right to enjoy the fruit that is earned through his labour. Intellectual properties can be classified into various forms: (Bath, 2014)
- Soft Rights – These are the rights that do not need any kind of registration, formalities and fees and they generate automatically. These rights includes Copy right, Database rights, Unregistered Trade Marks, Confidential Information’s, Trade Secret, and Unregistered Design Rights.
- Hard rights- These rights includes Registered Design, Patent & Registered Trade Marks
4.2 Outline the principles relating to the protection of inventions through patent rights in a given business scenario
In United Kingdom a patent is a monopoly or a controlling right which are granted for the safeguard of the inventions and is mainly granted for 20 years. There are marketing principles relating to the protection of inventions through patent rights. These are: (Wessing T, 2014)
- If an application for patent is made outside United Kingdom’s, than an application for the grant of patent must be made in United Kingdom within 12 months of the filing of application in any other country;
- The patent grants protection to invention which are:
- New or novel and are not a pre-existing art;
- Is able to an industrial application;
- Not barred from patentability;
- Once patent is granted an exclusive right is granted to the owner of the patent to exploit his right for 20 years and then renewed after every 4 years;
Further, in United Kingdom, a patent is deemed to be infringed when few acts are done without the consent of patentee. A person aggrieved can make an application for the infringement and the proceedings are generally held in London. The aggrieved may seek permanent or temporary injunction as a remedy or damages or damage of goods or costs etc. (Wessing T, 2014)
4.3 Describe the principles relating to copyright protection and their infringement in a given business scenario
In United Kingdom, Copyright, Design and Patents Act 1988 was established to grant protection to copyright. Copyright means a legal right which is granted to several works which originates from the intellect of a person. There are several principles relating to the protection of copyright. These are: (Tailor R, 2014)
- Copyright includes and protects original musical/dramatic/literary/artistic work OR films/cable programmes/sound recording/broadcasts OR published editions (typographical arrangements)
- There is no particular process that is established in United Kingdom’s for the grant of copyright to any person and the rights generate automatically upon the creation of the work provided such work is in writing or recorded in any other form, the work is original, the work is originated by a qualified personnel and is primarily published in United Kingdom;
- There is no copyright that can be granted to the ideas and only the material form is protected;
- The author of the copyright has the authority to give away or sold the copyrighted work;
Further, if the copyright work is infringed than the aggrieved party may claim damages for the infringement. The work of copyright is deemed to be infringed when the work is copied by some other person or the exclusive rights that are granted to the originator is used or exploited by some other person.
4.4 Compare and contrast the protection of trademarks and Business names.
Both Trade Mark and Business names are compared in order to understand the protection that is granted to them:
- The Intellectual Property Office is the main authority where the registration of the Trade mark is seek, whereas, Companies House is the authority where the registration of Business names is seek by the applicant; (Companies House, n.d)
- It is compulsory to register the business name where as there is no obligation to register the trade mark and can be used even without registration; (IPO, n.d)
- The rule regarding what constitute a trade mark is distinct from what constitutes a business name; (IPO, n.d)
- When the trade mark is registered than it is normally renewable after 10 years which is not in the case of business names.
Thus, there is a great difference that is established amid the protection that is granted to a trade mark with that of a business name.
Unit 26 Assignment Business Law is established that all laws have their respective utility and must be complied with as and when the need arises. Non application will result in great loss to all the parties of the transactions. Thus, in order to achieve benefits, the laws must be properly adhered to.
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