Different Objectives of Business Law
Business law is developed by the British parliament to regulate commercial transactions and to promote fairness in the business activities. Through these provisions, standard guidelines are introduced, which are required to be followed by all the business entities operating in the UK. Present report will include a description of various Acts covered in business law of the UK. Sections of these Acts will be linked to given scenarios in order to provide justified recommendations.
Legal provisions related to the implied term of sales of goods and supply of services are covered in Section 12-15 of the Sales of Goods Act, 1979. These terms are assumed to be present in the agreements of the parties. Description of these sections is enumerated as below: -
Section 12 of the Act deals with the provisions of good title allotted by the seller. According to this provision, the seller of the good should be entitled to the transfer of property. For completion of this norm, either they should have ownership or permission for selling. In the given case situation, Miss Bianca is a store manager, thus she is entitled to the sale of goods.
This aspect is described in Section 13 of the Sales of Goods Act, 1979. In accordance with this provision, provided goods should be similar to the description given by the seller at the time of sale. Miss Bianca is obliged to provide a television set as per the description given by her in the store.
This provision is covered in Section 14 of the Act. According to this Section, the seller is obliged to provide satisfactory product and services to the customers by which their needs can be fulfilled. Henceforth, Miss Bianca is liable to deliver durable product to Adam, through which his purpose of purchase can be satisfied.
This provision is applicable on sale transaction which is accomplished on the basis of the sample. According to the Section 15 of the Act, Miss Bianca should deliver a television set similar to the sample shown in the store.
In accordance with the Sales of Goods Act, the products can be bifurcated into two categories, i.e. specific goods and unascertained goods. In the given case situation, television is a unascertained goods because sale agreement was done on the basis of the sample. For the transfer of property, following five rules are required to be satisfied-
Section 18 sets out five rules for ascertaining the intention of parties for the assessment of validity of transfer of property by one party to another. These rules are applicable in case of both specific and unascertained goods. In accordance with this rule, in situation where there is a contract of sale of unascertained or future goods by description, then goods of that description must be in the deliverable state and it should be unconditionally appropriated to the contract. In addition to this, the property in goods passes to the buyer either by the seller or by assent of the buyer. Further, the assent may either be expressed or implied or may be given before or after the appropriation is made. By considering this section, transfer of goods is not valid because these are not similar to the description. Further, in the present case situation, an exclusion clause inserted by the store is not valid because it is contradictory to the rights provided by Consumer Protection Act. Thus, it will not be considered to be fair and Adam is entitled to make a claim of damages in a situation of non-satisfactory performance of the store.
Buyers are entitled to apply for following remedies in situation where seller had not satisfied their duties:
Claim for damages: The buyer is in a position to make a claim for damages if the seller had not fulfilled the contractual terms in an appropriate manner.
Special performance: They can demand for special performance if loss cannot be compensated by the claim of damages. The buyer can also demand addition damages along with the damages for loss. In the given situation, provided television set was not appropriate. Due to this aspect, Adam can either claim for the damages or replacement of television set.
Suit for interest: Buyer is also entitled to demand additional losses that occurred to them due to non-satisfactory performance by seller. These damages are provided to compensate the injury in a justifiable manner.
Following remedies are available with the seller:
Claim for consideration: The seller is entitled to make claims for the price of provided products.
Right to forfeit or retain: They can retain goods with a justified reason. For example, if contractual terms are not satisfied by the buyer, then seller is in position to retain the goods that are in transit.
Exclusion clause: They are also eligible to insert an exclusion clause in order to reduce their liability. However, such terms should be inserted in a proper manner and it should be according to the legal provisions.
In accordance with the provisions of product liability, customers are eligible to make claims, damages, if the seller had provided them a faulty product. In the given case situation, Adam is required to satisfy following conditions for the claim of defective television set: -
Obligations of Miss Bianca as per following laws: -
Provisions of negligence law states that individuals are required to take standard care of their actions in order to reduce the risk of injury to another innocent party. In order to make successful claim of negligence, claimant is required to satisfy the basic principles i.e. duty of care, breach of duty, causation and foreseeable. Miss Bianca has a duty to provide proper television in accordance with the requirements of Adam. However, the television set provided by her was defective which represents the act of breach of duty. Thus, she is liable to pay damages to Adam for her negligence action.
In accordance with the contract law, parties are required to fulfill the terms of contract to discharge their obligation by performance. In situation where contractual terms are not satisfied through the performance of contracting party then aggrieved party can make the claim of damages. Provided television set by Adam was not in accordance with the sample, thus, contractual terms are not satisfied. Further, condition of the contract is not satisfied due to which she is liable to provide damages for non-satisfactory performance.
According to this legislation, the seller should provide satisfactory products to customers that are free from material defects. Provisions of Consumer protection Act were not satisfied with the agreement of Adam and Miss Bianca, thus she is liable to provide damages.
Different types of credit agreement that can be used by Claire for the purchase of a car-
In hire purchase agreement she will be required to pay the installments in regular time period. With the payment of last installment, she will become the owner of the car.
In this agreement, she is purchasing a car on credit from the car manufacturing company. In this agreement conditions will vary as per the terms of contract. With the signing of an agreement she will be the owner of the car.
Clair can arrange a bank loan from financial or banking institution as she had good credibility in the market. Arranged funds will be paid to the car company and she will attain the ownership. For this agreement, she will be obliged for payment of interest and principal amount.
This is short term credit agreement. In these agreements, Claire had two to three months for the payment of the due amount to the bank. Further, interest charges will be higher in comparison to bank loan.
In accordance with the above description, Clair is recommended to take a bank loan from financial or banking institution as she has good credibility in the market. After her employment she can request for change in terms and conditions of the contract.
Rules regarding termination rights and default notices are covered in Section 77, 87 and 88 of the Consumer Credit Act, 1974. In accordance with this section she is entitled to demand copies of credit agreements in which entire contractual terms are stated. In a situation where she is not able to pay the due amount then the creditor can terminate the contract. However, they are required to serve notice 14 days before such act. For justified reason this period can be enhanced by 5 days.
In the present case situation, due to her unemployment she is not able to pay installment then the bank can use their right of termination contract. For this purpose, they are required to serve notice of default. Meanwhile, Claire can arrange funds for payment of due amount or can request for change in contract terms. After completion of notice period bank can forfeit the security for recovery of the loan amount.
Claire is entitled to demand remuneration for her work. She can deduct her due amount from the amount payable to the client. She is in a position to retain the property of her principal for justified reasons. She can make decisions on behalf of principal in order to increase profitability and reduce possibility of loss.
Along with the availability of rights she is required to fulfill her duties in an appropriate manner. It is her duty to arrange meetings for her principals regarding selling or purchasing of property. She is obliged to disclose material facts to the customers. She should not make a profit on the name of the principal. Further, she is required to manage information of her clients in a proper manner. She should not disclose this information for unjust benefits.
In accordance with the legislative provisions of UK, an organization has monopoly power if they have market share of more than 25%. Example of firm with monopoly power in UK is Tesco with 30% market share and Google with 90% of search engine traffic. Generally, monopoly is not supported by government because firm with this power can make misuse of their position. Further, they are able to control economic factors and operations of other entity by selling their products at inappropriate prices. Along with this, commercial entities will not make improvement in their products or services because customers do not have option for the substitute of their products and services. Due to the above described negative aspect, anti-competitive practices were developed by parliament of UK. Main objective of these legislations was to protect the interest of small and medium businesses.
Monopolies & Restrictive Practices Act 1948- In accordance with the provision of this Act, restriction in imposed on commercial transactions which create situation of monopoly in UK market.
Monopolies & Mergers Act 1965- According to this Act, business transactions such as merger and monopoly will be blocked which can make significant increase in market share of the firms. However, there are certain exceptions in this Act by which merger and acquisitions are accepted by regulatory authorities even there is increase in market share.
Enterprise Act 2002- Provisions of this Act is related to the assessment of business transaction in order to ensure that objective of businesses is not to create monopoly in the market. Anti-competitive practices are promoted by this Act in following manner-
Competition Act 1998- This Act was developed to control actions of dominant companies in UK market in order to impose restriction on their unfair practices. Provisions of this Act increase rights and duties of regulatory authority for checking and analyzing commercial strategies. Further, they had developed standard guidelines to promote competition in market which is required to be followed by all the firms.
Competition Commission is regulatory authority for managing and promoting anti-competitive practices in commercial environment of UK. They are responsible to assure that no firm is making misuse of their dominant position and there are not any unfair practices by them. Office of Fair Trading (OFT) provides them issues which are analyzed by them in order to reach valid conclusion on business practices.
In accordance with the recent changes in British legislatory provisions, previsous provisions of competition law are abolished. Provisions of Financial Conduct Authority (FCA) and Market Authority (CMA) had replaced that law. With the new provisions, Competition Commission will be able to resolve cross-border issues in a standard way. In addition to this, they are in position to block commercial transaction which is against the interest of public.
Dominant position can be defined as a situation in which an individual have right to control other by using their substantial control power. In an economy, domination position is attained by firm when they have capture significant share in market. Generally, organization makes unfair use of this position in order to make increase in their profitability. By these practices, market environment is adversely affected. It is because, there is not fair competition in market between rivalry firm.
In EU common market, dominant position is not assessed solely on basis of market share. For this aspect other qualitative factors such as influence of firm on market, production capability and composition of board of directors. In accordance with the definition provided by UK legislation two main elements are considered to assess dominant position in EU Common market.
According to the Chapter II/ Article 101 and 102 prohibition of Competition Act, restriction is imposed on business practices to prevent unfair operations in market. For this aspect guidelines are provided in this article. If act of company will be contradictory to these guidelines then management will be obliged to pay penalty. In addition to this, guilty party will be disqualified or terminated from company.
Intellectual property law is developed by parliament of UK to provide protection to the creativity and hard work of individuals. For this purpose, they had introduced different forms of intellectual property. List of different forms of intellectual property is as follows-
It provides protection from the infringement of business symbol to the commercial organizations. An individual can get protection only in situations where there trademark has an appropriate graphical presentation. Example of trademark is logo of apple. No individual or business organization is in position to infringe the symbol else they will be liable to pay severe damages.
Protection through this intellectual property is provided for creative art works of individuals.
This form of intellectual property is used to protect new meaningful inventions of the individual.
Unique design can also be protected through provisions of intellectual law. However, protection will be provided only if design can create value addition for business. Example of design comprises decorative or floral patterns or graphic symbols developed by an individual or business. Design rights complement the protection provided by trademark.
It can be defined as a government authority or license conferring title or authority for the standard time period. In provides sole right to the users to prevent others from using, making or selling their invention. Example of patent is protection provided to the production formula of Pepsi.
Provisions of this Act protection to the intellectual property is covered in context of copyright, design and patent. These provisions create restriction in act of infringement in order to reduce the risk of loss.
Protection through patent can be availed by an individual only if it is eligible for commercial application. Information regarding intellectual property should not be disclosed to other parties. Procedure of patent application is time consuming and renewal is necessary after the expiry of protection period.
Infringement of patent is considered as a criminal offense. For this action, faulty party will be required to pay penalty charges. Protected individual can make a claim for the damages from faulty party.
Protected party is entitled to avail the amount of loss occurred due to act of infringement. In addition to this, they can also demand for special damages by considering their injury.
It is an exclusive and assignable right provided to the individual for their original work to publish, perform, film or record literary, print artistic or musical material. Example of copyright is protection of music work of artists from the act of piracy. Protection provided through provisions of copyright is valid up to 70 years.
Business entities and individuals are entitled to apply for the copyright work formed by them is original and exhibits a degree of skill and judgment.
For protection of innovative and artistic work, provisions of copyright can be used by an individual. This protection is provided only in situations where work of an individual is original and it consists of degree of labor and skills. Infringement of copyright has a significant impact on the economy. Due to increasing infringement, there is a reduction in economy profits.
For the act of infringement, following claim can be made by an individual-
Trademarks and business names, both are used to provide protection to the commercial entities from the act of infringement. The trademark provides protection to the particular symbol of business while protection availed through business names is applicable for the entire organization. It is because; business name is used for the identification of organizations while the trademark is used for identification of products. By making use of this protection, business organizations are in the position to make a unique and separate image for their business which makes them different from their competitors.
Despite of these similarities, there are certain differences between trademark and business name. With the intellectual property of trademark, owner can sue other businesses who are using similar or resembling symbol to confuse the customers. For this, provided protection is only to the mark of business. For this act, protection is also provided in Company’s Act along with the Intellectual Property Act. In contrary to this, protection through intellectual property is covered on entire business. Further, direct claim for the damages due to infringement cannot be made. It is because; on the case of infringement of business name, all requirements are noted and in some situations, warning letter is issued to prevent such kind of acts.
From the present project report, conclusion can be drawn that objectives of business law are to promote fairness in society. Due to this aspect, they had introduced standard guidelines which are mandatory to be followed by businesses. Sellers are required to consider various Acts developed for customer protection. To provide protection to intangible assets of individual and business, provisions of intellectual property have been introduced. By the provisions of this Act, restriction is imposed on an act of infringement.
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