Delivery in day(s): 5
Unit 26 Business Law Sample Assignment
In the present report we are going to discuss different types of laws which are related to the sale of goods, transfer of property, consumer credits. We will also discuss the agency law and different type of agents. In this report we will also discuss the Business law related to monopolies, mergers and anti-competitive practices. In the end of this report we will discuss the laws related to intellectual property rights and different types of intellectual property, patents, copyrights and trademarks.
P1 apply the main principles affecting the legal relationship between business organisations and their consumers
P1.1 Analyse and advice Mr Adam on the legal rules on implied terms relating to the sale of goods and supply of services
TheSaleandSupplyofgoodsAct1994introduced changes to the areas formerly covered by the sale of goods act 1979.
The terms implied are present in section 12-15 of the sale of Goods Act 1979:
Section 12 sale of Goods act 1979says that there is an implied condition which says that the seller has the right to sell the goods.
Section13descriptionThe goods must be as the way they have been described,
Section 14(2) Quality:The goods need to be of a satisfactory quality
The goods that are found to be faulty within six months of the purchase would be considered as being faulty from the day of the purchase and the trader would be considered to have breached the contract with the consumer (SOGA HUB, 2014).
Section 14(3) fitness for purposeThe goods must be fit for the purpose for which it is made and bought.
In the present case the Television set stopped working within three weeks of its purchase so it will be implied according to the sale of goods act that the television set was faulty from the day of the purchase and the sellers are required to repair or replace the television set.
P1.2 Analyse and advice Mr Adam on the statutory provisions on the transfer of property and possession
The statutory provisions related to the transfer of property and possession under the Sale of Goods Act 1979 is given under 5. Title and Passing of property
5.1 The seller’s Title
(a) Section 12 sale of Goods act 1979says that there is an implied condition which says that the seller has the right to sell the goods.
5.2 Transfer of property as between seller and buyer
According to Atiyahthere are many consequences of which come from the passing of property, they are:
1. If the property in the goods has passed to the buyer he would have a good title to them in case the seller has become insolvent when the goods are in the still in the seller’s possession.
2. If the goods are delivered subject to any reservation of title or property clause of the seller then the seller might have a good title to the goods if the buyer becomes insolvent.
3. The right to sue a third party for damages to, or loss of the goods may depend on who has the property at the relevant time.
4. The risk will prima facia pass when the property passes (INSITE LAW MAGAZINE, 2014).
S.16 goods must be ascertained: when in the contract for the sale of unascertained goods is made then no property in the goods is transferred to the buyer unless the goods are ascertained.
S.17 (1) property passes when the parties intend it to pass: when in the contract for sale of specific or ascertained goods then the property in them is transferred to the buyer.
S.18 rules for ascertaining intention: unless any different intention appears the rules says that at the time of the sale of goods the seller wanted the property to pass to the buyer.
Section 19 reservation of right of disposal
Where there is a contract for the sale of goods, the seller may by the terms of the contract reserves the right of disposal of the goods until certain conditions are being fulfilled (ATIYAH, Patrick S. and Adams, John N., 2005).
S. 20(1) transfer of risk: unless it is otherwise agreed the goods remain at the seller’s risk until the property has been transferred to the buyer, and when the goods have been transferred to the buyer then the risk is also transferred to the buyer (ATIYAH, Patrick S. and Adams, John N., 2005).
So in the present case Mr. Adam can take help of the sale of goods act section 20 which says that the risk related to the goods are with the seller and the product was faulty even when it was in the possession of the TV.
P1.3 evaluate the statutory provisions on buyer’s and seller’s remedies in sale of goods contracts
The statutory provisions on the buyer’s and seller’s remedies in the sale of goods act are given in the sale of goods act 1979and they are as following:
Remedies of the Seller
The unpaid seller
Section 38 of the SOGA 1979says that a seller is an unpaid seller when the whole price of the goods is not paid or when payment through cheque has been dishonoured.
Rights of unpaid seller
Section 39 SOGA 1979,this section provides that the unpaid seller has a lien on the goods or he has the right to retain the goods for the price when he still has the goods in his possession.
If the buyer has become insolvent then the seller has the right to stop the goods in transit when he has parted with possession of the goods.
Section 41-43-rights against the goods is lien
Section 44-46-stoppage of the goods in Transit
Section-48- retention and re-sale of the goods as limited by the sales act
Rights against the buyer
Section 49is action for the price of the goods
Section 50action in damages for the non-acceptance of the goods (ATIYAH, Patrick S. and Adams, John N., 2005)
Remedies of the Buyer
Theconsumers are given additional rights under the part 5A SGA 1979 where the goods do not oblige with the sale contract at the time of delivery or for a period of six months when the goods were bought.
Section 48B (1) of SOGA act 1979 repair or replacement
This section provides that the buyer may require the seller of the goods to repair or replace a good at the seller’s expense.
Section 48C (1) reduction of price
The seller may have to reduce the price of the goods if he is not able to repair or replace the goods because it is disproportionate to do that.
Section 48C (2) Rescission of the contract
This means putting the parties to the sale contract on a pre-contractualposition where the buyer returns back the goods and the seller gives back the purchase price. (E LAW RESOURCES, (n.d.))
P1.4 apply product liability statutory provisions for faulty goods
The product liability is discussed in the lawoftort and the Consumer Protection Act 1987the famous case on product liability is the case ofDonoghue v Stevenson  AC 562in this case Lord Atkin gave the judgement that the manufacturer of good owes a duty of care towards the consumer to take reasonable care so that any injury is not being suffered by the consumer (INSITE LAW MAGAZINE, 2014).
When a product is considered defective?
The product is considered to be defective in two cases firstly when the product does not live up to the conditions of the product as in the aspects of contract law and secondly when the product is dangerous to the person or his property as given under the tort law and also undersection 3(1) of the Consumer Protection Act 1987(INSITE LAW MAGAZINE, 2014).
Now coming in the present case the seller of the TV want to escape their liability for the defective goods on the basis of the exclusion clause but that exclusion clause is unfair under the Unfair Terms in Consumer Contracts Regulation 1999,because the clause excludes all liability of the goods and this clause was not brought in the notice of Mr. Adamalso the goods is found to be defective within six months of its purchase so according to sale of goods act the seller is bound to repair or replace the faulty goods by his own expense.
P2 apply the legal rules on consumer credit agreements and agency
P2.1 Differentiate between types of credit agreements which Claire could use to obtain the new car.
There are many different types of credit agreements whichClaire could use to obtain a new car and they are given in the Consumer Credit Act 1974and they have been discussed below:
Restricted use of credit:the credit provided under this agreement is a restricted credit use but the credit provided under this agreement can be used by the debtor in any way that he likes although some uses may contravene that or other agreement.
Unrestricted use of credit:it is an agreementwhich does not come under the definition given in section 11(1) of consumer credit act 1974 and the credit provided under this agreement isunrestricted in nature (CANS ORG, 2014)
Debtor-creditor supplier agreements: anagreement made under section 12 of the consumer credit agreement where this agreement is made by the creditor under some pre-existing arrangements between him and the supplier (CANS ORG, 2014).
Debtor-creditor agreements:it is an agreement that falls under section 13 of the consumer credit agreement 1974it is an agreement which is not made under the any pre-existing arrangements between the creditor and the supplier only the debtor has the knowledge that the credit will be used to finance a transaction between the debtor and the supplier (CANS ORG, 2014).
P2.2 Analyse the rules on termination rights and default notices for Claire to be informed in case she subsequently has trouble paying the debts as required in the contract.
Claire can terminate her credit agreement and termination rights are given to the consumer in the Consumer Protection Act 1974 and according to this act the consumer can terminate the credit agreement any time before signing the agreement or also within 14 days of signing the agreement (ADVICE GUIDE, 2014).
Claire needs to tell the lender that she is cancelling the agreement and this is known as givingnotice and the notice should be given in writing.
If Claire has trouble in paying back her dues:
The lender must send her ArrearsNoticeand also a Financial Conduct Authority (FCA) information sheet.But this is not required if there is aGreen deal plan.
The lender is also required to send Claire aDefaultNoticeand that should also include the FCA information sheet, Claire can get the FCA information sheets from the FCA website which is www.fca.org.uk. The default notice will inform Claire what she needs to do the right things and what will be the consequences if she does not pay what is owned to her.
The lender will also send Clairenotice if he wants to add any charges on Claire due to some reason. If the lender gives incorrect information to Claire then they cannot sue her or add any extra charge or interest on her.Claire can also get help regarding her credit agreement at a CitizensAdviceBureau(ADVICE GUIDE, 2014).
P2.3 analyse the general features of Agency and differentiate between the different types of agent.
In an agency one person works and acts on the behalf of another person where the person who works on the behalf is known as an agent and the person on whose behalf the work is known as the principal.
The agency can be created by two ways:
Agency created by agreement:
Majorityofagencyrelationshipsarecreatedbycontracts but they can also be created through agreements. But there should be the presence of the three main principles of the contract which are consideration, written terms and lastly the contractual capacity.
Agency created by operation of law:
In general the contracts are created by contract but there can be agency relationships impliedly.
In areas where there are social needs the courts can declare an existence of an agency if there is no agreement present between the parties and this agency relationship is known as implied by “the operation of law”.
Where the end of the agency relationship is not communicated to the concerned authorities, then the authorities can assume the agency to be apparent and the principal would have to bear the consequences of the agent’s actions (MAYER, Don et al., 2014).
An agent is a person who does some acts on the behalf of or in the name of another person where he has been given some kind of an authority to do so. Almost all the organised human activity is done through agency (MAYER, Don et al., 2014). The different types of agents are as following:
General Agent:the general agent has a lot authority and he can do a huge range of transaction in the name of or on the behalf of his principal.
Special agent:the special agent has limited power as he is assigned to do some specific work only and nothing more.
Agency coupled with an interest:inthis agency the agent’s compensation is depended upon his continuous association and authority to act as an agent (MAYER, Don et al., 2014).
Subagent:it is an agent that works under the main agent and these agents may be or may not be authorized by the principal himself.
Servant:the servant is an agent who is employed by a master to perform acts that are controlled by the master (MAYER, Don et al., 2014).
P2.4 Evaluate the rights and duties of an agent to assist Claire understand her position once she becomes an Estate Agent.
As an agent
The duties of an agent
Duty of Obedience:the agent has the duty to follow all the legal instructions given by the principal and this is the most important duty.
Duty of care and skill:the agent has the duty of care and skill to do all work that is assigned to him.
Repair and despair:when an agent has the responsibility of managing a property then it is his duty to get necessary repair done of the property.
Duty of loyalty:the agent has the duty to be loyal to the principal and he cannot bring his interest or the interest of the third party in the way of the principal’s interest.
The rights of an agent
Remuneration:this means that the agent has the right to get remuneration in the form of wages or salary or a commission if he is an independent professional.
Reimbursement and indemnity:the agent has the right to be indemnified by the principal against any loss or liability and expenses.
Lien: agent can use his right of lien where he can retain the principal’s goods till the time his debts are not paid by the principal.
Third parties:if there is any dispute between the third party and the agent who enters a contract on the principal’s behalf then the agent can come out of it and the principal and the third party can sue each other directly (LET LINK, 2014).
P 3 the legal rules relating to monopolies, mergers and anticompetitive practices
P3.1 outline monopolies and anti-competitive practice legislation in the UK
There are many acts made in the United Kingdom to prevent the anti-competition practice. These laws have been discussed below:
The Competition Act 1998:this act regulates the illegal ways in which the firms try to make the market monopolised and there are many prohibitions for the firms they are as following:
- Not to form or operate cartels
- Not to abuse the dominant position which a holds on local or national levels.
- Not to fix prices or terms of the market research to damage the competitors business.
The Enterprise Act 2002:this act keeps a check on the following:
- To assess the mergers and see that they are more independent instead of being influenced by politicians
- The cartels have been made a criminal offence and the rules are tougher than that of the European Union.
- To disqualify the directors of firm if they breach the completion rules.
- The consumer groups can also complain about the uncompetitive practices.
Enterprise and Regulatory Act 2013:this act did the establishment of the new Competition and Markets intelligence and Authority and this was launched on 1st April 2014. The CMA will be a combination of the competition and consumer protection functions performed by the Office of Fair Trading (OFT), example of monopolies practise in UK like in the case of the Cathode ray tubes, seven companies were caught to have entered a cartel which is prohibited in the EU and UK laws and a fine of 1.5 billion Euros was imposed on the seven companies including LG, Samsung, Panasonic, Philips (WATERFIELD, Bruno, 2012).
THE Department for Business, innovation and Skills (BIS):
- The main objectives of the BIS are as following:
- Promotion of free markets and fair competition
- To promote the increase in productivity and also to improve the skills
- Promotion of innovation and scientific research and also to encourage the commercial exploitation of knowledge (ECONOMICS ONLINE, 2014)
P3.2 explain the role of the Competition Commission within the context of monopolies and anti-competitive practices and the UK Office of Fair Trading
The Office of Fair Trading (OFT):the main purpose of the office of fair trading is to check the unfair and uncompetitive trading.The main roles of the office of fair trading are following:
- To do the regulation provisions of the consumer credits
- Investigation of anti-competitive practices like restrictive practises where the manufactures try to force the retailers to fix a minimum price of goods
- Promoting the market structure where more competitive behaviour is seen
- Also it imposes fines of up to 10% of turnover whenever it finds it necessary and also in the year 2004 it was given more powers to use the covert surveillance so that it can investigate the anti-competitive practices (ECONOMICS ONLINE, 2014)
The Competition Commission:the competition commission main role is to assess whether a merger will reduce competition and after the investigation the commission may recommend that:
- The merger can go ahead
- The merger is prohibited
- The merger can go ahead but it is required that there should be some modifications
To decide the suggestions the commission will look into whether with the merger the competition in the market is maintained or not.
The competition and Markets Authority (CMA):this is the latest competition regulator which has the combining elements of the Office of Fair Trading and the Competition commission.Its main role and functions are:
Policy towards mergers:
Substantial Lessening of Competition (SLC):
This means that the mergers will be assessed on the basis that whether there will be a substantial lessening of the competition which means that whether there will be a potential loss of competition in the market due to the merger. There three categorises when a merger can result in lessening of the competition, they are as following:
Unilateral effects: when a single combined firm raises the prices in a profitable way which lessens the competition and removes the rivals from the market.
Co-ordinated effect: when many firms jointly increase their prices like TacitCollusion.
Vertical effect: when vertical integration gives arise to a merger where the merged firm can impose its power on the markets (ECONOMICS ONLINE, 2014).
P3.3 define dominant positions within the EU common market
The dominant position is defined in the European Union Treaty in Article 82which says that “any abuse which is done by one or more undertakings of a dominant position within the common market or in the substantial part of it shall be prohibited as incompatible with the common market in so far as it may affect trade between member states of the European Union” (VATIERO, Massimiliano, 2005)
For the article 82 European Union to be applicable four requirements must be fulfilled, they are firstly one or more undertakings should be in adominant position, secondly that posotion should be held within the common market, thirdly there must be an abuse of that position and lastly that abuse must have affected the inter-state trade (KALÉN, Annika, 2007).
Like for example the European commission had imposed high fines on AKZO chemie which is a chemical division of Dutch multinational group because it exploited its dominant position in the organic peroxide market by trying to eliminate the small competitors(MOUSSIS, Nicholas, 2011).
P3.4 consider the application of EU exemptions to potentially anti-competitive practices
The competition commission does make some exceptions to certain agreements made between undertakings the exemptions are given in the Article 81(3) of the treaty of Rome,these exemptions are given if the agreements have important countervailing benefits, which is given through the application of “blockexemption” which is related to certain categories of agreements and agreements made in some specific sectors. Only the EuropeanCommissioncan issue exemptions and this need to be notified for clearance. Also if an agreement is not notified and authorised then it is subject to investigation and prosecution under the Treaty’s provisions.
Individual exemptions:two positive and two negative conditions are required for an individual exemption when it can be granted:
The positive conditions are:
- Contribution to the improvement of production or distribution of goods or to promote technical or economic progress
- That allows consumers a fair share of the benefits that have resulted
The negative conditions are:
- Will not impose restrictions on firms that are not indispensable to the attainment of the above-listed objectives
- Also would not give rise to possible elimination of competition in a substantial part of the market of the products that are in question
Block exemptions: thiscoversthe exemption for some specific types of agreements between firms like distribution and purchase agreements, R& D cooperatives, patent and know-how licensing and specialising agreements.
The Commissionhas given exemptions on transportation, insurance and agricultural sectors and even the export cartels are exempted as long as they do not restrict exports and competition in the market (KHEMANI, R. Shyam, 2002).
Like in this case to curb the anti-competitive practises, in the case of the Cathode ray tubes, seven companies were caught to have entered a cartel which is prohibited in the EU and UK laws and a fine of 1.5 billion Euros was imposed on the seven companies including LG, Samsung, Panasonic, Philips (WATERFIELD, Bruno, 2012).
P 4 Know the key provisions relating to intellectual property rights
P4.1 Identify differing forms of intellectual property
The different forms of intellectual property are as following:
Patents:a patent protects the new inventions, patents mainly protect the features and processes that make things work. This helps the inventors in getting profit from their inventions. For having an intellectual property right on an invention some criteria must be fulfilled which is as following:
- The invention must be new
- It must have an inventive step that is not obvious to someone with knowledge and experience in the same field or subject
- It must be capable of being used or made in some industry, and if all the criteria are met then the protection is given for twenty years by the United Kingdom Intellectual Property Office (IPO, (n.d.)).
Designs:the registered design is a legal right that protects the overall visual appearance of a product or only a part of a product in the country or countries in which it is registered. A design is defined as “the appearance of the whole or part of a product that results from the features of it, particularly in lines, colours, shapes, texture or materials and contours or the material of that product or ornament”. For the registration of the design it is required that the design be a new design and the design must have an individual character (IPO, (n.d.)).
Trademarks:it is a sign which can distinguish goods and services of one company from other company. A trade mark can be words, logos or even a combination of both. The trademarks need to be registered at the Intellectual Property Office.To be registered as a trademark the following criteria must be fulfilled:
- The trademark should be used as a distinctive for the goods or services.
- The trademarks are signs that are used to recognise a good and differentiate it from other company goods of the same type.
- The trademark must not describe the goods only then they can be registered. A registered trademark is registered for a period of 10 years (IPO, (n.d.)).
Copyright: the copyright protects literaryworks like novels, manuals, songs
Dramaticworks like dance
Artistic workslike paintings, photographs
Copyright applies to any medium; it does not protect ideas for a work. In United Kingdom the copyright is protected by the Copyright Designs and patents Act 1988 (as amended)(IPO, (n.d.)).
P4.2 Outline the principles relating to the protection of inventions through patent rights and their infringement in a given business scenario
There are many benefits of a patent in a business scenario, the rights are:
- The patent rights includes taking legal action so that other people can be stopped from copying, manufacturing, selling and importing a person patent without his permission.
- Patent law gives the person having the patent right to take legal action under the civil law so that the invention cannot be exploited.
- The patent gives a person the following rights:
- To sell his invention and all the intellectual property rights
- To license the invention to someone else but still retain all the IP rights
- To discuss the invention with others so that a business can be based around the invention
- The public also benefits from the patent because it is published after eighteen months (IPO, (n.d.)).
Patent infringementmeans manufacturing, using, selling or importing a patented product or process without the permission of its lawful owner.
The owner of the patent can take legal action and claim for damages in case of an infringement of the patent right.
There are two defences to the patent infringement:
- There is no infringement as what you are doing is not infringement of the patent
- The patent is invalid; one can challenge the validity of an infringement (IPO, (N.D.)).
P4.3 Describe the principles relating to copyright protection and their infringement in a given business scenario
The rights of the copyright owner are in a business scenario:
The copyright owner has both moral and economic rights. The moral rights are right to recognised as the author and economic rights include right to copy the work, right to distribute the work, to broadcast and adapt the work. The copyright rights last till the author’s life and 70 years after his death.
The infringement of the copyright:
Whena generous amount of work of a person has been copied without the permission of the copyright owner then it is known as infringement of Copyright (FIND LAW, 2014).
When the copyright has been infringed then the owner of the copyright has the below remedies:
- Injunctions, which are orders that restrain the copying, displaying or broadcasting of the work
- Accounts of profits, where the profits are given to the copyright owner
- Orders for the delivery up (CARET, 2005)
P4.4 Compare and contrast the protection of trademarks and business names.
There is difference between the protection given to a business name and the protection given to the trade mark. The Companies House is responsible for acompany’s registration in Great Britain.
The company law and trademark law are different from each other.
If a name has been registered as a business name then it does not mean that the company as has a trademark right.
A company may have different business name and different company name.
Also a company name may not be accepted as a trade mark if:
- It is not distinctive
- It is a descriptive word
- The word indicates the geographical origin of the product
- It may be already registered as a trade mark
A trademark may not be registered as a company name if:
- If it is similar to another company’s name
- It is already registered as a company name
- It is illegal in nature
- It shows a connection with the government (IPO, (n.d.)).
In the present report we have discussed different types of laws which are related to the sale of goods, transfer of property, consumer credits. We have also discussed the agency law and different type of agents. In this report we have discussed the laws related to monopolies, mergers and anti-competitive practices. In the end of this report we have discussed the laws related to intellectual property rights and different types of intellectual property, patents, copyrights and trademarks.
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