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Unit 7 Assignment on Business Law
Diploma in Business
Unit Number and Title
Unit 7 Business Law
Question 1 Effectiveness of partnership or registered company
According to given scenario, Ian and Nick have decided to go into the business of supplying Office Apps as they have analyzed the significant demand and high rate of profits. The main concern of both is on to the establishment of organization either partnership firm or registered company. Now to analyze the effectiveness of the partnership or registered company, both need to consider the following differences and advantages to make the appropriate decision to start the business. I will recommend them to use partnership business as it will help in the mutual growth of both. For more understanding about partnership firm, Ian and Nick can consider the following information:
Advantages and disadvantages of partnership over LTD:
- Capital: In order to start the business there is a requirement of the capital as the numbers of partner’s increases the more fund can be raised. Due to nature of business, the partners like Ian and Nick will fund the business with startup capital to develop the infrastructure and establish the communication with customers and suppliers. The partnership allows the better flexibility and more potential to growth as well as profits which can be equally shared by the partners of the business.
- Shared responsibility: The active partners of organization can share the responsibilities of the organization to run the business more appropriate manners (Hall, 2014). This kind of business approach will allow them to make the most of their ability and manage the operations. The equal sharing of tasks and responsibility will help to maintain the standard by monitoring of the activities. For example, Ian is good in closing the deal with and clients and on the other side Nick is good enough to monitor the approach of staff members will help to maintain the flow of business to the desired standard. So partnership organization will help to share the responsibility and meet the objectives with proper monitoring.
- Decision making: For new start-up organization, it is essential to have a good understanding of the decision making and planning of the approach to meet the business objectives. In partnership working, both Ian and Nick will share decision making and help each other to evaluate the conditions and market trends to develop the legal and ethical approach for the organization. Hence, partnership working will be beneficial for both to establish the business of supplying Office Apps. The decision making is the important part of organizational perspective to meet objectives.
- Profit sharing: Partnership working will help both Nick and Ian to share the equal amount of profit or according to the investment of capital for a start-up business. This is a key benefit of partnership business that gives the equal opportunities for sharing the profits with a fair amount of work as well management of resources to maintain the growth of the business. The partnership allows the better flexibility and more potential to growth as well as profits which can be equally shared by the partners of the business.
Question 4: Contract terms
According to given scenario, David purchased a coffee machine from Kitch Ltd to use in his café and David has specified that he will use for catering purpose. After the purchase, the coffee maker machine was not working properly and affecting the work of café as it consuming time to prepare desired product and services for customers. However, David has a complaint about the issues to the manufacturing organization but according to the contract between David and Kitch Ltd the organization cannot be liable for any defect in the products after the sales (Davidson and Davidson William 2012). In this particular scenario, Exclusion clause will be used to maintain the effectiveness of the contract between organization and David. According to this clause, contract terms involve the restriction of rights of the parties in the contract. There are majorly three types of the exclusion clause is been used for different condition and situation. In the given scenario, the contract between David and Kitch will involve limitation clause in which the organization is not liable to fulfil all the issues of another party as one party is not totally excluded from the certain liabilities.
In the given scenario, if David has duly signed any contract in which organization has included the clause as they were not liable for any issue after sales of the product than David cannot be able to take action or bound organization to provide support (Creedon, 2015). In this situation, I would like to advise David to stop purchasing the products or services from Kitch Ltd as he might get suffer in future too and will not have any option to claim against the organization. On the other hand, if Kicth Ltd is not taking the action for the complaint of David than according to the law of contract he could not force organization. Furthermore, Courts are more suspicious of total exclusion clauses, and they are often overturned if written incorrectly. Exclusion clauses must be clear and reasonable, or else the court will not accept them (Ashley.et.al. 2014). David has to read the contract carefully before signing it to avoid such condition where he could not able to claim about the issues.
Question 5 Method of resolving disputes through courts and disadvantage of arbitration
Arbitration refers to a form of dispute resolution in both private and judicial determination of a dispute by an independent third party. According to traditional arbitration, it is being used for obtaining the fair resolution of disputes by and impartial third party without unnecessary expenses or delay (Stipanowich, 2012). In this process, the court should not interfere in the disputes of the parties. In the business process both the parties are free to agree to resolve the contemporary issues in their own ways using the own policies and safeguarding tools that have been proposed using the public interest. This is major reasons for the organization to use the traditional method of resolving issues using the arbitration. There are following types of arbitrations have been used for managing the disputes:
- Commercial arbitration: This most common of disputes that are being used for resolving the issues between the two enterprises.
- Consumer arbitration: This is been used for resolving the disputes among customers and supplier of goods and services (Rainey, 2013). In that, organization favours the own rule and regulations that are being proposed before selling the products and services and duly signed by the customer to resolve the issues.
- Labour arbitration: This kind of arbitration involves the settlement of employment related to the dispute within the organization. The organization can use the arbitration according to rights and interested arbitration to resolve the issues.
This provides all power and authority of decision making to top management of the organization that is the main reason the organization gives the preference to traditional arbitration to resolve the issues.
Following are the disadvantages of arbitration that needs to be considering while using this process in business functions:
- According to arbitration, the parties pay the cost of the hiring the venue as the other party goes court against the case.
- It empowers the organization than the court which is influence the effectiveness of court.
- The procedure is very similar to court but it consumes the lot of time and cost which will not in favour of customers or other parties (Ogg, 2014).
- If someone is not agreeing with the Arbitrator decision than he/she will have limited chances to appeal.
Question 6: Consideration
The scenario suggests that Gavin has informed the staff members to produce the t-shirts according to demand and he would offer them a bonus. By considering the statement of Gavin the staff members have accepted the challenges and produced a number of t-shirts but at the end, Gavin has refused to pay bonus by saying that it was the duty of the workforce to produce the shirt on time. Now, the workers are looking to claim against Gavin. In that case, the verbal contract has been done between Gavin and workers which are legally affective as per the law of UK. The worker can claim for that particular act as there is the offer, acceptance, consideration and intention to create the legal terms. In addition to this, an offer is a pledge by one party to another, promising to enter into a contract on set terms. Gavin has promised the workforce to offer the bonus for the extra efforts to manufacturing the football t-shirts for fans of England (Barth, 2016). The contract has to be specific, complete and capable of being accepted. Acceptance of the offer must be made unequivocally for a contract to be made. In the given case, Gavin has offered the bonus and workers have accepted the challenge of producing the extra amount of t-shirts but at the completion of the task, Gavin has refused to offer the benefits.
In that condition, workers have the rights to take the legal action against the owner according to the contract law . This will help to get their benefits and maintain the effectiveness of their working as it was the verbal contract between owner and workers. However, there is not any written contract but the verbal agreement was intent to meet the objectives and benefits of workers.
Books and journals
Ashley, P.S., Palmer, B. and Aldersey-Williams, J., 2014. An International Issue:'Loss of Profits' and'Consequential Loss'. Business Law International,15(3), p.261.
Barth, B.W., 2016. An investigation into the suitability of arbitration as a dispute settling mechanism in the construction industry (Doctoral dissertation).
Creedon, S., 2015.Exclusion Clause and the Intersection of International Criminal Law and the Refugee Convention, The. Trinity CL Rev., 18, p.84.
Davidson, W.A., Davidson William A, 2012. System and method for creating, managing, evaluating, optimizing creating business partnership standards and creating reuseable knowledge and business intelligence for business partnerships and alliances. U.S. Patent 8,260,627.
Hall, W.T., 2014. Partnership business items. AGENDA, 13.
Ogg, K., 2014. Separating the persecutors from the persecuted: a feminist and comparative examination of exclusion from the refugee regime.International Journal of Refugee Law, 26(1), pp.82-111.
Rainey, S., 2013. The Law of Tug and Tow and Offshore Contracts.CRC Press.
Stipanowich, T., 2012. The Third Arbitration Trilogy: Stolt-Nielsen, Rent-A-Center, Concepcion and the Future of American Arbitration. American Review Of International Arbitration.