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Business Law
Business Law
Business law is enclosed with forming and operating business including rules and regulations. It
is comprised of various laws that a business should follow in order to successfully manage
business transactions. Law of business is surrounded with various laws such as laws regarding
tax, laws regarding employment, laws regarding intellectual property, laws regarding
bankruptcy, laws regarding licensing ETC. These laws have great impact on managing business
operations and taking effective decisions. Growth and success of an organization is impossible
without following these laws. To operate an organization in legal ways importance of these laws
know no bounds. Therefore, it is obvious that business laws ensure security and safety of an
organization. Violation of these laws must be prevented in each and every organization in order
to achieve desired goals.
Task 1:
1.1 Applying the legal rules on implied terms relating to the sale of goods and supply of
services:
There are certain laws regarding sale of goods and supply of services to ensure safety and
security to the buyers. Provisions regarding sale of goods and supply of services come from Sale
of Goods Act 1979 and the Supply of Goods and Services Act 1982.
In a contract of sale of goods, certain terms are related. These terms are classified as implied or
express. Express terms refer to those terms which are specific and which the contractual parties
mutually determine. Implied terms are basically the opposite of express terms and terms are not
certain. Implied terms (conditions and warranties) relating to sale of goods are following:
Title: This term deals with indicating the rights of a seller whether the goods can be sold
by the seller. This can be referred as a condition.
Sale of goods by description: This term deals with consistency of goods according to its
description. Goods can be described in terms of simplifying features of goods, uttering
trademark, brand or label. This can be referred as condition.
Sale of goods by sample: According to Sec 17, goods are sold should be consistent with
sample and goods should be flawless. This term is also referred as condition.
Sale of goods by sample as well as description: Sec 15 implies sale of goods by sample
and by description. According to this term, goods that are sold using sample and
description should be compatible with that sample and description. It is referred as
implied condition.
Ensuring Fitness: This term is related to ensuring quality of the goods and if the quality
of the goods meets expectations, then considering features of the goods, price and other
necessary requirements.
Apart from the above conditions there are also some implied warranties in contract of
sale of goods. They are the following:
Possession of goods must be enjoyed by the buyer.
The goods must be burden free.
According to Sec 16(3), ‘ A warranty as to fitness for a particular purpose may be
annexed to a contract of sale by a custom or usage of trade’.
Delivering goods and services are enacted by Supply of Goods and Services Act 1982 (SGSA).
SGSA is comprised of two parts. Supply of goods is embedded with part one and supply of
services is embedded with part 2. Implied terms relating to supply of services are discussed
below:
Task 2
2.1 Difference between types of credit agreements:
Before apply for new credit, the most important thing is choosing the right credit and
understanding its types. Credit agreements are classified into following: secured credit and
unsecured credit. The differences between secured credit agreement and unsecured credit
agreement are the following:
There is security in the secured credit agreement. In this type of agreement, if borrower
fails to pay the borrowed credit lender may repossess his/her assets. There are various
types of secured credit such as secured credit cards, line of credit, bond over home, loan
on car, loan on home equity ETC.
Whereas, there is no security in the unsecured credit agreement. In this type of
agreement, if borrower fails to pay the credit lender may demand for payment of credit.
He/she may also try to collect debt with the help of debt collectors. There are various
types of unsecured credit such as bank loans, Master Cards, Visa Cards, Petrol Cards,
Retail Store Cars.
2.2 Applying rules, termination rights and default notices in a given scenario:
Provisions regarding termination rights, rules, and default notices can be derived from various
acts. For example, if we recently obtained a motor vehicle under hire purchase agreement it may
be regulated by Consumer Credit Act 1974. If creditor wants to terminate the agreement, he
should notify it to the buyer and give a default notice. All the necessary information regarding
description of agreement, address of buyer and creditor, details of breach must be contained in
default notice. Payment of unpaid portion is another important thing. According to Sec 87(1),
default notice is sent by the creditor to the debtor before 14 days to pay the arrears.
2.3 Differentiating between different types of agents:
Broker: A broker acts as an intermediary between buyers and sellers. When the parties
start a contract, the responsibility of broker comes to end.
Factor: A factor retains goods for selling them in future. He is a commercial agent and
he is capable of making contracts with third parties.
Commission Agent: Commission agent charges commission on sale of goods. He may
have authority over the goods. His status is alike than that of a broker.
Auctioneer: An auctioneer can sell the goods by auction. He can sell the goods without
any obstacles. If he does not conform to the rules associated with sales, it will be binding
on the owner.
A Del Credere Agent: A Del credere agent ensures the execution of contract with the
help of other party. If there is anything wrong regarding the contract done by other party,
the Del credere agent must compensate.
General Agent and Particular Agent: General agents are associated with appointing
all tasks in an organization. Whereas particular agents are associated with
accomplishing ascertained tasks.
2.4 Evaluating the rights and duties of an agent:
An agent has certain rights and duties. The rights and duties of an agent are enumerated below:
Agent’s Rights:
Enactment of rights: The responsibilities of the principal can be enacted by the agent.
Retainer rights: An agent has the right to retain any sum regarding business on behalf of
the principal.
Agent’s Remuneration: Agent remuneration does not become due until he has completed
the act for which he was appointed agent.
Agent not entitled to remuneration for business misconduct: According to Sec. 220,
‘An agent who is guilty of misconduct in the business of the agency is not entitled to any
remuneration in respect of that part of the business which he has misconducted’.
Lien of Agent: If any property, papers or goods are lost agent can recover those goods,
paper and property.
Agent’s Duties:
It is the first and foremost duty of an agent to execute business of his principal.
Agent must be skillful and diligent to compensate his principal.
According to Sec 217, ‘An agent is bound to render proper accounts to his principal on
demand, or periodically if so provided in the agreement’.
Agent must be connected with principal.
Agent must be capable of paying all sums excluding remuneration and other costs.
If the principal is physically and mentally disable agent should do all the duties on behalf
of principal.
Task 3
3.1 Outlining monopolies and anti-competitive practice legislation in the UK:
In the UK, almost all the firm has monopoly power with a market share of more than 25%. These
businesses having so much monopoly power are often masturbated.
Cartels/Collusion
Cartels are basically a contract between businesses in the same market to join forces against on
consumers, suppliers or competitors. In the UK, firms try tacitly to escape from collusion.
Building roadblock can artificially keep the competitors out. ‘Destroyer pricing’ is a trick to cut
the price and thus it creates an outlook that the market is not so attractive.
Restrictive Practices
Restrictive practices include the example of unethical practices. For instance, shearing suppliers
not to supply to competitors, pressurizing retailers to stock competitor’s product detrimentally
are the restrictive practices.
UK Competition Legislation
1. Monopolies & Restrictive Practices (inquiry & Control) Act 1948 & Monopolies &
Mergers Act 1965:
These acts entitle the Competition Commission with the power to hurdle the business deals,
which are of in opposition to public interest.
2. Restrictive Trade Practices Act 1956 (goods) & Restrictive Practices Act 1976
(services):
According to this act, a Court basically takes decisions regarding restrictive practices. It
determines whether the practice should be admissible or not.
This act was introduced to investigate the monopoly practices. It is usually done by the
Minister if he finds it essential to do so.
To match EU law and regulate anti-competitive practices this act was constructed.
3.2 Explaining the role of Competition Commission within the context of monopolies and anti-
competitive practices and the UK office of fair-trading or other relevant authorities:
The Competition Commission basically inspects the masturbated monopoly power or professed
cases and then releases a statement to the Minister. It is done for taking further decision
regarding restricted practices.
As EU is set up on the principles of free trade competition, efficiency and economic growth, it
has got a disparagement in the UK. The EU started with the alliance of Rome. According to the
article 85 of this contract, agreements between member states are prohibited so that the business
is protected. According to article 86, monopoly power is also prohibited. The governance of
competition is thus shifting from member states to the EU.
The OFT is a self-reliant body. The major role of OFT is to ensure the effectiveness of the
market. It focuses on the reduction of unfair and unethical competitive trading.
The OFT’s prime objectives include:
Besides OTF, various authorities reinforce different facet of product safety legislation. These
authorities are-
To ensure product safety for the machineries used at work, HSE handles the matter.
Exhalation of noise and pollution from outdoor equipment is controlled by this authority.
Task 4
Patent can be used for appropriate invention. Patent is introduced by govt. in order to inspire new
discoveries. Patents prohibit usage, sell and imitation of inventor’s property. In the given
scenario, Rachel imitated my design and infringed patent. She imitated my design and used it
without my permission. She didn’t entitle to win the OSCAR as she imitated my design .In this
case, I should do the following these to avoid patent infringement lawsuit:
I should be concerned about the product that is supposed to be patented.
Ensure patented products are not violating existing patent.
I can ask for attorney.
Summary:
Therefore, we can say that business law helps in proper formation and operation of business
activities. It is impossible for an organization to maintain daily business transactions without
business laws. In this assessment, we learned about various types of business laws, statutory
provisions regarding these laws. We also learned about Different types of agents, their rights and
responsibilities, types of intellectual property. For achieving the desired objective, each and
every organization must acknowledge about business laws that we learned from the assignment.
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