Unit 7 Business law Assignment Solution

Unit 7 Business law Assignment Solution

Introduction

Business law provides guidelines for conducting of operational activities to existing and new organization for assurance of fairness. These provisions provide protection to the weaker party and to prevent unfair practices. Present unit 7 business law assignment solution is focused on provision of business law to provide appropriate recommendations for given case scenarios. It will include description of Sales of Goods Act, Transfer of Property Act, 1882, Law of property Act, 1925, Consumer Protection Act 1987 and anti-competitive Act to support recommendation in given scenarios. Description will be supported by previous case law. In addition to this, rights and infringement will be described according to the Intellectual property  valid Act.

Task 1

1.1

Implied terms in the Sales of Goods Act 1979 are described in following sections-

• Section 12-Title: Seller of the good should have appropriate right or ownership for the sale (Nystén-Haarala, Lee, and Lehto, 2010). Individual should be eligible to provide good title to another person. In the given scenario Miss Bianca is owner of the showroom thus she is entitled for the transfer to goods to the Adam.
• Section 13- Description: Goods provided by seller to buyer should be appropriate to the description given at the time of formation of agreement. Moreover, it should be free from defects. In this case, TV purchase by Adam should be appropriate as per the description given by Miss Bianca at the time of formation of agreement.
• Section 14- quality: This section was introduced in the Sale and Supply of Goods Act 1994. As per this section,qualitative goods should be provided by seller to the buyer (Akintoye, Renukappa, and Lal, 2012). However this section is applied only to the sellers, who are acting in course of business. In order to satisfy this test, TV provided by Miss Bianca should have following qualitative factors-
  • Appropriate appearance and finish.
  • Durability.
  • It should be appropriate for all the purposes for which goods or services are commonly supplied.
  • Free from minor flaws and faults.
  • Safety (Sale of Goods Act 1979.2014).

Exceptions- In the following situation remedy will not be provided to Adam

• If it is decided by Adam that he does not want the item
• Accidental damage or misuse
• Fair wear and tear

Section 15- Sale by sample: Goods provided in the sale should be according to the representative sample shown at the time of formation of agreement (Rush, and Ottley, 2006). It should be free from defects. TV should be as per the sample in the showroom. 

1.2

As per the legislation of UK transfer of property is governed by the Law of property Act, 1925 and Transfer of Property Act, 1882. According to these act, transfer of property can be defined as action whereby a living person conveys their property or possession to another living person in present or future (Middlemiss, 2012). As per the provision of this Act, corporate body and associations are covered in definition of living person. Provisions of transfer of property is as follow-

• Under Section 16 of the Sale of Goods Act 1979, it was determined that only the goods that have been ascertained shall pass for possession of the goods according to the case of Healey v Howlett& Sons
• Accordingly, section 18 of the Sale of Goods Act, 1979 deals with the transfer of property for possession, for the delivery of goods when the contract has been entered into. If the goods are to measured or weighed in order to be ascertained then the same shall apply to the goods for the transfer to take place. If the goods are not rejected within reasonable time they will be considered to have been transferred. If the goods are not ascertained the same shall pass with the unconditional appropriation of the goods.
• The transfer may only take place if the seller holds the title of the goods. If the sale is made by a person not having the title for it then it will be considered invalid.
• Accordingly the goods so exchanged shall match the description or the sample provided for the goods in order for it to transfer the possession.
• Whereby the transfer of possession and the title takes place the risk associated with the goods is also transferred to the buyer. If the buyer has in turn authorized the possession to someone else then the goods shall be transferred in the name of the beneficiary of the goods.

In the present situation it may be determined that Adam had purchased the TV for  personal and professional  use and hence the title and possession of the goods shall be in his name. Thereby, Adam will be regarded as the true owner of the TV.

1.3

Remedies of the seller (Miss Bianca)

• Special performance- Seller can demand specific performance described in the agreement from the buyer.
• Right to payment of contract price- Sellers are entitled to claim price of the good transferred through sale.
• Exclusion clause- If there is any exclusion in the agreement of sale or supply of good, then they is not entitled to provide damages for non-satisfactory performance but such clauses should be fair and appropriate to law and public policy.

Remedies of the buyer (Adam)

• Suit of damages- Buyer can claim damages occurred through the product provided by buyer.
  Suit for special performance- They are eligible to demand specific performance described in the agreement from the seller.
• Suit for interest- With the primary damages they can also claim damages for related injury or loss. For example amount of potential profit or physical damage etc (Schaffer, Agusti, and Dhooge, 2014).

In the present case Adam is eligible to avail above described right as TV is not working well after three days. He can either claim for replacement or refund of amount.

1.4

Provisions of product liability are introduced by the Consumer Protection Act 1987. As per the description in the Act, claimant should satisfy following points for recovery of damages-

• Product provided by seller is defective
• Due to defect injury was occurred
• Injury was occurred due to seller

In the present case, faulty product was provided by Miss Bianca as it was not working properly after 3 days. Exclusion clause in the agreement will not be considered for relief as it unfair to the aggrieved party. 

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Task 2

2.1

In UK credit agreements are governed by Consumer Credit Act, 1974. As per the Act, following agreements can be used by Claire for the purchase of new car of credit-

• Conditional sales- Conditional sale is similar to the provision of hire purchase agreements; however in these agreements buyer is required to satisfy some additional conditions to achieve ownership and good title. 
• Credit sale- Generally these agreements are used for the purchase of luxury item such as property, vehicle etc. It is a kind of loan taken for the payment of purchase price. Amount of loan is repaid through monthly installments along with the interest.
• Hire contracts- In the right of use is transferred for particular period in against of payment. In these agreements, ownership and good title are never transferred. In this buyer and seller act as bailer and bailee.
• Hire purchase- In this kind of agreement buyer is required to pay particular amount in regular time intervals. Possession is transferred with first installment but ownership is transferred with the payment of last installment.

As per the above description, agreement of credit sale will be suitable for the Claire as in this she is required to pay monthly installments along with the interest (Kidner, and Richard. 2007). Moreover, possession will be transferred with the first monthly installment.

2.2

Rules of termination rights and default notices are governed by Section 77-79 of CCA 1974. According to these section debtor or hirer are entitled to avail a copy of original agreement along with the statement of payment. Creditor has right to terminate the agreement prior to the expiry date, however this should be supported by appropriate reason (Rush, and Ottley, 2006). If financial institution wants to terminate the agreement of Claire they should serve her proper default notice. Along with this, period of 14 days should be provided so can avail remedy for breach of agreement. Default notice is mandatory to provide in following scenarios-

• Demand of prior payment of payables as per the deed 
• Enforceability of security provide for the credit agreement
• Recouping of goods
• Termination or breach of agreement
• When privileges of hirer are considered to be terminated, restricted or deferred

As per the regulation of the Consumer Credit Act, 1983, default notice should cover all material information. In the present situation, if financial institution wants to terminate the agreement of Claire they should serve her proper default notice in which proper reasons, information of payable and other significant facts should be mentioned.

2.3

Agency can be defined as connection of two parties where one party impliedly or expressly provides their consent to other party to act on their behalf. Description of types of agent is as follow-

• Co-agent- Co-agents is an agent who operates simultaneously with other agents for the similar principal. In these kind of agency agreement Claire is liable only for her performance and acts. She cannot be obliged on the basis of joint act in which she is not involved.
• Dual-agent- Dual-agent is an agent who provides their services to more than one principal for similar kind of activities. In the given scenario Claire will work as Dual-agent as she is operating as an estate agent (Boldrin, and Levine,2002).
• Sub-agents- Sub-agent is agent of primary agent. In these agreements, authority is provided by principal to appoint sub-agent for commercial activities. Sub-agents are obliged to both primary agent and principle.
• General Agent- Agents that are authorized to carry out responsibilities on behalf of the principal are known as general agents. These agents are in relationship with other agents as well. The agents of general nature are broker, factors and delcredere agents.

Factors: the agents that have the right to make offer, purchase goods or raise cash on behalf of the principal are called factors and are regulated by the Factors Act, 1889.
Brokers: Brokers are known for utilizing their position in order to provide the best deal for the transfer of the property for a certain remuneration. The process is called brokerage. Unlike factors brokers don’t have the ownership of the goods so being transferred.
Del Credere Agents: Such agents are variables taken help of under the worldwide exchange.
Special Agent-Agents that undertake the role for a specific purpose are referred to as the special agents. Such agents are estate agents, auctioneers and bankers.
Estate Agents: The agents act on behalf of the owner of the property. They follow up with the interested buyers and promote the property for the purpose of sale.
Bankers: Bankers act as the operators for the client facilitating the encashment of the checks so drawn by the clients. The clients instruct the bankers for the pay protection premium or portions of advances that are to be followed by the bankers.
Auctioneers: Agents that carry out the auction of the possession of the client are known as acutioneers. They are dealer’s operators and specialist so consulted at the time of formation of the contract.

2.4

Following are the rights of the Claire as an estate agent-

• Right to retain- Claire has right to deduct the payable amount which is due to her by principal from the amount payable to principal.
• Right to claim remuneration- Claire has right to claim remuneration in against of services provided by her.
• Right of stoppage in transit- If Claire is personally liable, then she has right to restrict transfer of goods in transit. Stoppage in transit should be supported by appropriate reason (Bridge, 2007).
• Right of lien- Claire can exercise right of lien. However this right is supported by their contractual agreement, on the basis of deed Claire can avail right of general lien or particular lien.

Following are the duties of the Claire as an estate agent-

• Claire should act on the basis of instructions given by her clients.
• She should not make any secret profits by making unethical use of name or image of principal.
• She should operate in limits of provided rights
• In the critical and emergency situation she should consult issues with her clients
• She is required to maintain proper financial records for enrollment of all commercial transactions. She is obliged to remit belongings of principals fairly.
• She is required to provide protection to the possession of principal in situation of solvency, death or insanity.

Task 3

3.1

Monopoly in UK is created in a situation when an organization have more than or equal to 25% of market share. It provides significant power to the commercial entity which can be misused for personal benefits (Cornish, Llewelyn, and Aplin, 2013). For prevention of such unfair practices, following legislation of anti-competitive practice is developed by parliament of UK-

• Restrictive Trade Practices Act 1956 for goods and Restrictive Trade Practices Act 1976 for services- Provisions of these Acts was introduced to provide guidelines to restrict practices of unfair trade.
• Monopolies & Restrictive Practices (inquiry & Control) Act 1948 & Monopolies & Mergers Act 1965- Through the enforceability of this Act, commercial deals for expansion such as merger or acquisition were blocked for interest of public.
• Competition Act 1994- This Act was introduced by the parliament of UK for controlling anti-competitive practices by business organizations.
• Competition Act 1980- This Act was established to provide rights and powers to the minister in charge for the investigation of monopoly practices that they are in public interest or not (Fleming, 2005). 

3.2

Competition Commission is a statutory body established by parliament of UK to prevent creation of anti-competitive practices. They work as per the guidelines of Office of Fair Trading (OFT). They provide suggestion and solutions to the issues referred by OFT. If these suggestions and solutions are appropriate for public then it is implemented by OFT and government authorities. In addition to this, they have crucial responsibility to identify whether Acquisition and Merger is in public interest or not (Schaffer, Agusti, and Dhooge, 2014). For example merger of Tesco and Safeway was restricted by Competition Commission because deal was eligible to create excessive monopoly power. They regularly investigate and analyze commercial deals and operations to create restriction on abuse of monopoly rights to prevent anti-competitive practices. The Office of Fair Trading was focused on laying down the rules and regulations for the state of affairs to be fair. It promoted  health and safety  open competition. The OFT concentrated on making the market place a fair place to trade and have positive effect on the economy. The competition commission regulated the mergers or monopolies present in the market. The commission focused on the resolving the matters that were referred through the OFT. The Competition Authority now regulates the functions of both OFT as well as the Competition Commission collectively.

3.3

As per the legal definition, dominant position in commercial context can be defined as influencing position due to substantial rights with the organization undertaking regarding specific product or service market. This definition is comprise of following two elements-

• Eligibility to prevent competition in market place
• Capacity to operate without getting affected by activities or trend in industry

Enforceability and misuse of dominant position: Description of misuse of dominant position is provided in Chapter II/ Article 102 prohibition of Competition Act (Schwenzer, 2005). As per this Article if any firm is engaged in anti-competitive practices then they will be obliged to pay statutory penalties up to the amount equal to 10% of their global turnover. Along with this, culprit can get disqualified from being a member of board of director.

3.4

Agreement which create restriction on competition is not always considered to be restricted. Exemptions of anti-competitive practices are described in Chapter I or article 101 which are as follow-

• As per this article, agreements are assumed to be harmless if parties involved in it have comparatively lower market share.
• If deal does not have significant impact on competition or trade between member states then it is not considered to be restricted.

However agreements will deem to be restrictive through the object if it is infringed by competition rules (Abuse of a dominant position.2014). The factors that are not considered anti-competitive but fair may the rejection to supply the goods to a company for possessing an unfavorable credit rating. It would in accordance with the Article 102 be fair to deny the supply as it may affect the goodwill of the company in a given market. If the purpose of the article is misused only then it will be regarded as an anti-competitive practice. The new block exemption regulation sets the bar for the production permits allowed to the businesses under a competitive environment. Article 101of the European Union allows the vertical agreements for the regulation of the economy that lessens the business rate.

Task 4

4.1

The law of intellectual property safeguards the rights of the owner related to his/her intellectual capability and creativity. The main purpose for which this law was formed is to stop the unauthorized usage of someone else’s work. The myriad forms of intellectual property have been outlined below –

• Patents– Patents are given by submitting an application to the UK Patent Office. This right helps in securing inventions from being copied, imitated, reproduced or sold without taking the permission of the person who invented them. The normal length of a patent in UK is 20 years.
• Trademark – It is defined as a mark, sign or symbol that differentiates products from another. It is possible to register a trademark if it is suitable for graphical representation i.e. either in pictures of words.
• Copyright– The Copyright law mandates the just usage and reproduction of new creations. This law safeguards the following works –
  • Photographs
  • Sound and video recordings
  • Feature films
  • Computer programs
  • Journal and magazine articles

4.2

 Patent refers to intellectual property right which is vested in the inventor of a new thing by the government of UK as a territorial right that normally extends to 20 years. The main principles related to protection of inventions by means of patent rights and their breach, are mentioned underneath:

• The confidentiality of the invention should be maintained to  make it patentable
• It must be qualified for industrial application
• The procedure of applying for a patent can take many years
• It is possible to renew it for a maximum of 20 years.

Inventions related to  computer development  programs can also be patented only on the condition that it consists of something more than merely running software in a very straightforward way. Violation of patent is a punishable offence for which the offender is liable to pay gross penalty.

4.3

Copyright safeguards original sound recordings, musical and artistic works, feature films, literary work, video recordings etc. A copyright stays in effect for 70 years post the death of the creator. Nonetheless, the length for sound recordings is 50 years and it is 25 years for typological arrangements. The Copyright, Designs and Patent Act 1988 regulates the rights of the copyright holder wherein the same cannot be misused unless licensed by the copyright holder. If the copyright holder decides to ban the use or authorize the procedures of use then he has the right to do the same.  The same may be restricted for use or imitation. The copyright will be determined to be breached if the same are made or sold, displayed in public, exhibited in the public way of trade, or importing the infringed copies without the permission of the copyright holder. Violation of Copyright is normally not a criminal offence. Breaching copyright will be seen as a criminal offence if it is purposely done on a substantial level of during the course of the business. The violation may result in penalizing the infringer to the extent of 5000 Pounds or imprisonment for six months. The copyright holder may summon the legal actions for restriction or claiming the damages.

4.4

Part I of the Trademark Act, 1994, relates to the registration process of the trademarks. It undertakes the circumstances such as licensing, infringement, and registration. Part II of the Act includes the international and national aspects of the trademarks. Part III of the Act, provides for the administrative asepcts and Part IV illustrates the general and miscellaneous provisions.

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Conclusion

From the present project report it can be concluded that sales agreement should satisfy all implied terms for the fair transfer of possession. If these terms are not fulfilled by buyer or seller then aggrieved party can avail rights for the remedy. To prevent unfair practices through monopoly, anti-competitive legislation is developed by parliament of UK. To protect rights of new invention law of Intellectual property is established to prevent infringement and its unethical use.

References

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