Unit 26 Business Law Assignment

Introduction

Each and every country in the world has its own set of laws. These laws are designed to curb the evil from the society and to protect the citizens from wrongs. There are numerous laws designed in each and every country and so is the case with the United Kingdom. The business law assignment deals with the Sales of Goods Act 1979 in which the seller and buyer rights and duties had been discussed. Apart from this, the assignment also deals with the monopoly policies, competition Act 1987, law of agency, intellectual property law and anti restrictive policies etc.

Task 1

1.1 Apply the legal rules on implied terms relating to the sale of goods and supply of services

Emmanuel’s car was purchased by John on a pre condition that he repairs the engine of the car. Emmanuel agreed and 20% of the price was deposited by John. The repairs were carried out by Emmanuel but prior informing the John regarding the repairs the car was destroyed in fire. Now, John is demanding his deposit for the car since he was not insured.

The main issue is whether John is entitled to receive his deposit back?

Under section 12 of the Sales of Goods Act 1979, a seller has the right to sell those goods in which he has a title and can pass such title to the buyer and is held in Niblett Ltd v Confectioners Materials Co (1921) & Microbeads AC v Vinhurst Road Markings (1975). Section 12-15 of the Sales of Goods Act 1979 lays down few implied terms that must be followed by the parties. (The Law Teacher, 2014)

However, there are few provisions in the Act 1979 which lay down when then property in goods is passed to the buyer and when it is retained to the seller. Section 18 (1) submits that the ownership in the goods passes immediately  as soon as the goods are sold by the seller to the buyer and is held in Dennant V Skinner and Collom (1948). Sub section 2 submits that the ownership in the goods passes when the seller has an obligation to do something which is done by the seller and the buyer has knowledge of the same. If the buyer has no knowledge then the ownership in the goods will not pass and is held in Underwood Ltd v Burgh Castle Brick and Cement Syndicate (1922). Sub section 4 submits that if buyer’s approval is required which is the pre condition of sale then ownership will pass upon the approval of the buyer and is held in Poole V Smith’s Car Sales (Balham) (1962). (Abbott et al, 2007) Now, it is submitted that since Emmanuel has to do repairs and must notify the same to John in order to pass the ownership to John. Since the same is not done thus rule 4 of section 18 will apply and the ownership is still with Emmanuel and thus John has right to claim his deposit back.

1.2 Apply the statutory provisions on the transfer of property and possession

A computer manufacturer, Joe had in his stock around 500 computers. He was facing economic hurdles and thus he sold 200, 200 & 600 computers to Joe, James and David respectively. The buyers were not aware regarding the financial position of Joe and thus paid in full. However, prior any delivery to the buyers the business of Joe was destroyed. Now all the buyers are seeking their computers from the receiver. As per section 16 of the Sales planning of Goods Act 1979 in a contract is made of uncertain goods then the property in the goods only passes when the same are ascertained. But, as per the amended section 20A of SOGA in 1995 the goods when sold out of the bulk then the buyer has the ownership right in the bulk of goods with the seller and the buyer is the owner of the same. (Reforms of the Sale of Goods, 2014) Thus, since the computers sold by Joe are not ascertained in respect as which lot of computer is allotted to which buyer thus every buyer may seek their respective share in proportion from the receiver.

1.3 Evaluate the statutory provisions on buyer’s and seller’s remedies

Rachel and James went for a dinner. During dinner Rachel found a foreign particle in the drink she was consuming. She become ill and rushed to hospital. She was suffering since then. The identification of the manufacturer was not marked on the bottle.

• Since there is no identification regarding the manufacturer of the drink, thus Rachel can seek remedy under the Consumer protection Act 1986, section 45 and is liable to claim damages for her loss. As per section 2 of the Act she can sue the importer. But importer is not identified then she can claim the damages from the supplier that is the restaurant.(Cotter BP, 2000)
• Since George is the manufacturer of the drink, thus, sub section 2 of section1 of 1986 Act will apply and damages can be claimed from him. (Cotter BP, 2000)
• The main remedies for the buyer are to examine the goods within 6 months; has right to reject the goods; to claim damages; repair of goods, rescinds the goods; reduction in prices. Whereas the seller can seek remedy by way of defences available under section 5 of the Act. (Insite Law, 2014)

1.4 Apply product liability statutory provisions

Rebecca took a hotel based on description in the brochure of David. She tripped and fell through plate-glass balcony doors and faces injuries.

The main issues can Rebecca claim damages from David. The concept of product liability emerged in Donoghue v Stevenson (1932) and later made part of Supply of Goods and Services Act, 1982. Section 14 of the Act submits that whenever goods or services supplied then they must fulfil the purpose for which it is served. If any description regarding the goods and services are mentioned in any public statement then as per section 14 the services supplied must fit the description mentioned in such public statement. Any contravention is breach of such service and the consumer is liable to seek damages and is held in BSS Group Plc v Makers (UK) Ltd (t/a Allied Services) (2011). (Walters C, 2011) Now, the action of Rebecca to choose the hotel was as per the description provided in the brochure of David and thus the description must correspond with the services of hotel. However, since there is deviation in the same resulting in loss to Rebecca, thus Rebecca can sue David for losses.

Task 2  

2.1 Differentiate between types of credit agreements

NatWest Bank granted a loan of £10,000 for 5 years to John to purchase car. The repayment is @ £200.00 per month instalment. Instead of buying car, John used the money for holiday with his girlfriend. The Bank on getting aware of Johns actions wants to cancel the agreement.

The main issue is      

• to advice the Bank upon their legal position; and

• What is the legal position of the Bank if the money is used to purchase Honda Accord, 2.2i?

The issues are resolved after understanding the relevant law.

The main forms of credit agreements are:

• when the debtor has no power upon the use of loan for which it is put to then such credits are restricted use credits agreements but where the debtor has power to control the use of the loan then such agreements are unrestricted credit agreements;
• An agreement in which there is an association amid the supplier and the creditors are debtor-creditor-supplier agreement but where there is no connection between the creditor and the supplier are debtor creditor agreement.

Further, The Consumer Credit Act 1974 is applicable to regulated consumer credit agreements which are established amid a creditor and the debtor. Further as per section 8 of the Act the amount of credit must not exceed £15,000. Further, the consumer Credit (Agreements) regulations 1983 are also applicable upon regulated agreements. The regulations submit that of the rules which guide a regulated agreement is not followed by the parties then the creditor has the right to cancel the agreement. The rules include: (Keenan & Riches, 2007)

• that the agreement must be in writing and must be legal;
• the price of the goods for which credit is taken must be mentioned along with its description;
• the mode and price of instalments made at regular interval must be mentioned;
• The agreement must specify that the termination clause;

Thus, since John has taken a regulated credit agreement from bank and there is application of regulations 1983, thus, if Ali deviates from the use for which credit is undertaken then Bank has the power to cancel the agreement. However, if John purchases a Honda Accord, 2.2i then Bank cannot terminate the agreement and Ali upon payment of all instalments has the right to purchase the car.

2.2 Apply rules, termination rights and default notices in a

A car was brought by Ali @ £20,000 on Hire purchase from Brit college. The monthly instalments are @£300.00 per month for 5 years and there after he may buy the car. 20% of the deposit was already done. Regular instalments were made till 3 years by Ali but then failed to pay as he become unemployed.  Now, the college wasn’t to repose the car from Ali. In order to advice Ali of his termination rights and default notice it is important to understand the legal provisions behind the same. If Ali wants to cancel the agreement then he has termination right and the same are prescribed under the Credit consumer Act 1974. Section 94 to section 101 of the grants right to the debtor to terminate the agreement by providing a 7 day notice to the creditor. (Lilleholt et al, 2007)

But, if Ali fails to pay his instalments then the college has power to cancel the agreement provided the provisions of default notices must be complied with as per section 88 of the Act. The creditor by virtue of section 87 of the Act must provide the debtor with a default notice. The creditor permits the debtor to pay the due within 14 days failure of which grants right to the creditor to terminate the agreement and repossession of the goods. However extra time may be seek by the debtor by the interference of the court (Southern District Finance V Barnes (1995)). (CCA 1974, 2010) But, mere delivery of default notice is not appropriate when the debtor has already paid 1/3^rd of the total credit amount. As per section 90-91 of the Act, in such situation the creditor must take court orders against the debtor and thus is capable to cancel the agreement and reposes the goods. (Lilleholt et al, 2007) Thus, since Ali has paid 20% of the credit amount as advance and has already paid instalments of three years thus he has already paid 1/3 of the credit amount and thus the college must seek court order prior cancelling and repossessing the goods from Ali.

2.3 Differentiate between the different types of agent

As per the statement of Lord Denning MR an actual authority can be segregated into two types. That is express and implied. Express authority is such which is given expressly by word and implied authority is such which is inferred from the conduct of the parties and the circumstances. 

The concept of express actual authority and implied actual authority can be distinguished with particular to “Agency creation and Agency Authority. 

In Watteau –V Fenwick (1893) it was held that agate has the usual authority to undertake contracts with the third party on behalf of the principal and thus there was agency created which is an express actual authority. (Rogers M, n.d)

In Freeman & Lockyer –V Buckhurst Park (Mangal) Properties Ltd (1964), Lord Justice Diplok submitted that in implied actual authority can be established in number of ways of which the most common way is to represent a person by way of conduct. In this form the agent when undertakes some act with the third party then the principal represent the agent to be capable of undertaking such transaction and thus implied to the third parties of such agency relationship. In the said case, the directors were not authorised to undertake the action but are considered as ‘agent authority’ by the company.  The concept is also established in In Hely-Hutchinson –V Brayhead Ltd (1968). (Company Law Club, n.d)

2.4 Evaluate the rights and duties of an agent

• Paul (the Principal) asked his agent Joseph to look for a second hand car provided the car never had an accident. Joseph found a car and noticed that the same was repaired. He did not investigate whether the car had met with an accident or not but recommended to Paul. But later it was discovered that the car was an insurance written off and valueless.
• Joe (the Principal) appointed Jude (the agent)for 10 Years.But after 4 years the business of Joe comes to a sudden end thereby marked the end of Jude term.The main issue is to analyze the legal position of Jude.

Both part a and b deals with the positions of agents and thus it is necessary to understand the position of both Joseph and Jude in the light of the “Rights” and “Duties” of an agent.

In law of agency, when one person (principal) appoints another (agent) to act on the behalf of principal then such relationship is called the relationship of agency.

When an agent is appointed then there are several duties that are imposed these are duty to undertake actions skill fully, carefully, to follow instructions, perform personally, to gave due information to the principal, to act in fiduciary manner, to account for profits and money etc.

Along with duties there are many rights that are also possesses by an agent. Such as right to seek information, to seek payment, commission, to ask for remuneration and commission, to reimburse for expense incurred and right of lien and indemnity. Further whenever a principal, wants to terminate an agency agreement which is for more than 3 years then it is necessary that a notice period of 3 months must be provided failure of which results in granting right to the agent to seek indemnity and compensation. (Keenan & Riches, 2007)

Thus,

Joseph has the obligation and duty to follow the instructions of his principal. But Joseph failed to follow his instruction and he found a car which met an accident and is insurance written off and valueless. Thus, the principal has right to terminate the agency contract with him.

Since the agency of Jude was terminated without giving a tree month notice (agency is for more than 3 years) thus he has right to seek indemnity and compensation.

Task 3

3.1 outline monopolies and anti-competitive practice legislation in the UK

Monopoly is a market situation where there is a single seller or the producer in an industry. In a monopolistic market situation a company by charging high prices which are above the true marginal costs may result in profit and exploitation of consumers.  It is necessary that legislations must be framed for a monopolistic market as it results in restricting the choices of the consumers. The provisions are also implemented by the government in order to control the anti competitive practices against the public.

 The main legislations are: (Shingwekar R, 2013)

• The Enterprise Act 2002 - Chapter 11 of the Act forbid anti competitive activities negatively impacting the trade in United Kingdom’s;
• The competition Act 1998 - Chapter 1 of the Act forbid anti competitive activities negatively 9impacting the trade in United Kingdom’s;

Further there are two European Union (EU) laws which are applicable to all states of EU, these are: (Shingwekar R, 2013)

• The Treaty on the functioning of the European Union (TFEU) - Article 101 and 102 of the treaty forbid anti competitive practices within the European States.
• The treaty of Rome - Article 81 does not allow any activity that restricts competition in the market and 82 avoids abuse of dominant position.

3.2 explain the role of the Competition Commission within the context of monopolies and anti-competitive practices and the UK Office of Fair Trading

Competition Commission role under monopolies and anti competitive practices: The Competition Commission is the outcome of the Competitive Act 1998 and was previously known as Monopolies and Merger Commission. The main role that is granted to the competition commission includes Reporting when the Director General of the office of the far trading refers so to the commission and when any violations are conducted with the Competition Act 1998 then t hear appeals from the same. (Tutor2u, n.d)

UK Office of Fair Trading Role: The main role that has been attributed to the UK office of Fair Trading is to enforce the provision of Chapter 1nand 11 of the Competition Act 1998. If there is any compliant made or if the office of fair trading thinks fit may investigate on the complaint made under the power enshrined under Article 101 and Article 102 of TFEU. There are several actions that can be undertaken by the officer which includes request to seek information, power to search the premises with or without warrant. If the office believes that the provisions has been violated then investigations can be carried out. (Gov, n.d)

Further, Both the Competition Commission and the Office of fair trading has been merged on 1^st April 2014 into The Competition and Market Authority” (CMA).  The new body has powers to investigate on the anti competitive activities and impose fines, criminal sanctions and damages.

3.3 Define dominant positions within the EU common market

As per the facts, British gas is the only industry that supplies gas in the UK. Consumers have been complaining for over the past 5 years of exploitation by this single provider. Investigation by the Office of Fair Trading reveals that prices charged by this company are above the true marginal cost of supply leading to excess profit being made by the company.

In order to understand the position of British Gas , it is necessary to understand the concept of Dominant Position.

Article 102 of TFEU and chapter 11 of the Competition Act 1998 deals with the concept of dominant position of a company. Both the EU and the United Kingdom markets do not allow any business to flourish which abuses its power and dominant the market. A company is said to be in dominant position when: (CMA 10, 2014)

• When the company is in a position to discriminate prices depending upon the kind of customer;
• When the company undertake activities of regional price discrimination;
• To reduce prices in order to curb competition;
• When the retail prices are controlled by the suppliers;
• When goods are sold in limited areas;

All the above activities are the actions of the dominant position of the company.

Thus, the British gas by charging price above the true marginal cost in order to generate profit is abuse of its dominant position.

Thus, there are several consequences that may floe from the same such as injunction, damages, fine @ 10% of turnover, disqualification.

3.4 consider the application of EU exemptions to potentially anti-competitive practices

Mainly Article 101 and Article 102 of the TFEU, Chapter 1 and 11 of the Competition Act 1998 and Article 81 of the Treaty f Rome restricts agreements, businesses, arrangements which restricts, prevents or hamper the competition in the United Kingdom or within the European Union. (CMA 10, 2014)

The law enshrined is very hard when it comes to anti competitive actives. However there are some agreements which are exempted from the preview of Article 101 of the treaty. Only those agreements are exempted which does not cause any harm such as block exemptions which for the welfare of the public. The main anti competitive agreements which are exempted are: (CMA 10, 2014)

• In order to safeguard a legal business interests;
• Intentional justification of the behaviour that is abusive;
• When the customer has a poor rating, then in such circumstances it is justified if the dominant company does not provide him with the supplies.

Task 4

4.1 Identify differing forms of intellectual property

The rights which are attained by a person because of the creation developed by him with the use of his brain power are called intellectual property rights. There are significant number of creativity that can be developed by a person such as an invention, a poem, a design etc. And for beach creativity there are separate rights that are acquired by such creator. Thus there are different forms of intellectual properties that are found and every intellectual property ahs different rights granted by the establishment of statutory enactments. (WilsonGunn, 2014)

• Patents rights and are protected under  Patents Act 1977
• Copyright and are protected under Copyright, Design and Patents Act 1988
• Designs and are protected under Copyright, Design and Patents Act 1988
• Trade Mark and are protected under  Trade Marks Act 1994

4.2 outline the principles relating to the protection of inventions through patent rights and their infringement in a given business scenario

Patent rights are the rights which are acquired by those creators who invent some novel or new creation with his power of brain. The acquirer of patent right has power over the patent for about 20 years. The main principles involving patent rights are: (Mewburn Ellis, 2012)

• The patents are only granted for those creations which are novel and new;
• The creations must be inventions;In order to seek patent right an application to the patent office must be made. There is no concept of automatic patent rights in United kingdom;
• The invention must be of such ability that has industrial usage;
• No statutory restriction applies on such invention;

But, when any person without the prior approval of the patent right owner uses such patent or exploits the same in any manner then it is nothing but infringement and the patent owner has the right to sue such infringer and may seek injunction rights or damages or compensation from the infringer.

4.3 describe the principles relating to copyright protection and their infringement in a given business scenario

Copyright are those rights which are automated in nature in the sense that as soon as the creator develops certain specified kind of work there is no requirement of any registration and the creator gains right over such creativity. The main works upon which copyright are granted are artistic works, broadcasts, sound recording, films etc. The main principles involving copyrights rights are: (CPS, n.d)

• These are automated rights and does not require registration for the same;
• No right is acquired on the idea and thus if the same idea is reproduced in some another format and differently then copyright can be acquired for the same as well;
• The copyright owner has the power tom lease, sell, his copyright;
• The author of the copyright has the right over his work for about 70 years;

But, if any person without the approval of the copyright owner exploits the work and uses the same either by copying the sane or selling in his own name etc then such person has infringed the right of the copyright owner and the owner can sue such person for infringement and can claim compensation, fines, repossession of the articles.

4.4 compare and contrast the protection of trademarks and Business names.

Trade mark and business names are two intellectual properties for which protection can be seek by its creator. The most basic protection that can be acquired to any intellectual property right is through registration. There is a specific needs that the business name must be registered but the same is not compulsory in trade marks. Thus, in case of infringement the only case that can be filed by a trademark infringer is of passing off.  Further, it is the companies House that undertakes the protection of business names but it is the Intellectual property rights that grants protection to the trade mark. Further, registration of business name does not mean that there is automatic trade mark registration for the same. (Companies House, n.d)

Thus, the protections that are granted to trade mark are different with that of business names.

Conclusion

It is submitted that whatever may be the form of colaw, it is necessary to understand the same so as to justify the legal problems that arose in conducting activities. In the present assignment several laws are studies and their applicability is understood by applying the same on case studies.

Reference List

Task 1
Abbott et al, (2007) Business Law;
BSS Group Plc v Makers (UK) Ltd (t/a Allied Services) (2011).
Cotter BP (2000) Product Related Compliance: Law And Practice (online). Available at: http://portal.nasstar.com/33/files/articles/article_bc_productliability.pdf. (Accessed on 3rd December 2014);
Task 2
CCA (2010) L9– Consumer Credit Acts
Company Law Club (n.d) Directors powers (online). Available at: http://www.companylawclub.co.uk/topics/directors_powers.shtml. (Accessed on 3rd December 2014);
Task 3
CMA 10 (2014) Regulated Industries: Guidance on concurrent application of
competition law to regulated industries  (online). Available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/288958
CMA10_Guidance_on_concurrent_application_of_competition_law_to_regulated_industries.pdf. (Accessed on 3rd December 2014);
Task 4
CPS (n.d) Intellectual Property Crime (
Companies House (n.d) Company Names and Trade Mark (online). Available at: http://www.companieshouse.gov.uk/infoAndGuide/compNamesAndTradeMarks.shtml.