Unit 7: Business Law

Page | 1
Table of Contents
Introduction......................................................................................................................................3

Task1................................................................................................................................................3

P1. Explain the different sources of law and laws that organizations must comply with............3

P2 Explain the role of government in law making and how statutory and common law is
applied in the justice courts..........................................................................................................5

Task 2...............................................................................................................................................7

P3 Using specific examples illustrate how company, employment and contract law has a
potential impact upon businesses.................................................................................................7

Task 3.............................................................................................................................................10

P4 Suggest appropriate legal solutions for the problems...........................................................10

P5 Provide justifications for the use of appropriate legal solutions...........................................10

P5 Provide justifications for the use of appropriate legal solutions...........................................11

Task4..............................................................................................................................................12

P6 Recommend legal solutions based upon a different country’s legal system and/or a different
legal framework.........................................................................................................................12

Conclusion.....................................................................................................................................13

References......................................................................................................................................15

Page | 2
 Introduction
The business law assignment report is to help an important foreign client identify the basics of
English law. Therefore this report deals with two major things or elements of English law.
According to the major divisions of the report the first part explains different sources of English
law and some particular laws which are important for any organization irrespective of its type.
The second part also explains the basic nature of English legal system via defining the role of
government in law-making and some common laws applicable in justice court. The
governmental role explanation in law-making also evaluates parliament superiority and bill
formation, passage as well as royal assent. Moreover the common law and its court application
part include legal structure based on case law as well as doctrine of precedent. Finally the
statutory law and its applications include statutory processes and applicable legislations.

Task1

P1. Explain the different sources of law and laws that organizations must comply with

According to the basic concept of law, the major function is to maintain the basic structure of the
society with some enlisted behaviors. The enlisted behaviors or the rules violation may cause the
violator (single /group of people) penalty, punishment or warnings according to level of violation
(Huxley-Binns and Martin, 2014). Moreover the level of legal rules violation is measured and
identified by the court of law or justice. The English law system deals with three major types and
they are as follows:

 Legislation
 Common-law
 EU law

Now English law is applicable only in the jurisdiction of England and Wales. But this English-
Wales common law system is different from those foreign countries’ law under European Union
and this European law system is based on civil/roman law structure (House et al, 2014). The

Page | 3
 legislation structure of England and Wales are further divided into primary and secondary
legislations.

 Primary legislation: These types of delegated legislations are created by the deliberate
assembly of the country.  They are of similar types as legislation in Scotland’s parliament or
Ireland’s assembly (Raz, 2013). Moreover these delegates of parliament have the right to issue
secondary legislations. In England and other commonwealths the primary legislations include the
followings:
o Public act: The acts are successfully passed via parliament with royal
confirmation. The acts are of two types; modern and old acts. The acts include transport act
2000, housing act 1963 and other general act since 1988.
o Local and personal act:Both are included in private acts. Local acts include
organizational benefits, corporation limits while personal acts include divorce, grants of
citizenship, title or name changes etc.
o Church assembly and Church of UK measures: According to the 1919 power
act (UK) Church of England has the same power as parliament. Beneficiary act, clergy
measure act are included here (Habermas, 2015).
o Privy council : Part of royal limits these decisions are changed by act of
parliament occasionally and includes civil services, prime minister’s appointments, overseas
limitations while following civil contingency act, statutory instrument act and government of
Wales act 2006 etc.
 Secondary legislation:This type of subordinate legislation is made by representative of
primary legislation authority. Include territorial acts like 1973 Ireland act, national assembly of
Wales act and other orders, Warranty and regulation acts.

Common laws are also famous as case laws. For the judgment in this laws include judicial
precedence and the term identifies the similarity in cases to making decision. The case laws
include criminal laws, contract laws, tort laws, agency terms and conditions. The common laws
may look similar to civil laws but their main differences are their individual sources (Bubb,
2014). The common laws have their origin in the writs of medieval England (power of kings)
while the civil laws have European background and they are in continuous updating process.
EU laws are famous for their synonym civil laws. The roman laws are saturated with European
Page | 4
 framework and they come from countries with civil codes (framework considers judge made
decisions as law). But some of the common laws have gone under civil codes in 19 th and
20thcenturies. In case of UK some of them are partnership act 1890, sales of goods act 1893, laws
of property act 1925 etc.

Important organizational laws (UK):  For any organizational in UK there are some major
factors. The factors include validity of the organization, corporate culture (finance and internal
employee culture) etc. The first law to define a valid company or organization is the ‘companies’
act 2006’ which has reformed from ‘companies’ act 1985’ (Callison, 2015). This act deals with
director duties, corporation taxes, organizational transparency directives, structure of public and
private companies and internal laws for employee, culture and shareholders. Another important
act is insolvency act 1986 which defines bankrupt situations and voluntary arrangements,
Trustee, administration, offences, right and transactions etc. The next important law to define the
corporate culture of any organization is corporate law. The same law is based on corporate
governance and corporate finance. The UK governance code identifies a company in London
stock exchange. The finance and service act 2000 authorizes the code (Hayek, 2012). The act
also identifies the relation with shareholders, salary structure, effectiveness, purpose, and
position and performance level of companies. Company structure is also defined by some civil
acts like partnership act 1890; limited partnership act 2000, Trustee act 2000, and Pension act
1995 as well as contract act 1872.

P2 Explain the role of government in law making and how statutory and common law is
applied in the justice courts

Law making process: Most laws are made of following stages:

 General election selects the details of government agenda

 Political parties, socio-economic situation opens some issues in the agenda
 Negotiations for joint operation in government agenda
 Issues identification
 Appropriate people consultation (ministers, political parties, boards etc)
 Proposal creation focusing people and social structure
 Proposal to bill transformation via parliamentary counsel (Llewellyn, 2016)

Page | 5
 Introduction of the bill in parliament session
 Bill moves in the parliament via first, second, third reading, committee, report stages and
considering chambers
 House of commons and house of lords approves the bill which make the same into law
 If the law (transformed bill) gets royal consent it transforms into an act

Common laws’ application in court: The common law has a continuous reforming structure.
The principle of common law is in full effect under the judge in the court. In this case the
judgment is done by legal documentation as per the cases in the court (Raschand Tsebelis, 2013).
Moreover the case law has a common structure all over the jurisdiction (England and Wales). In
criminal cases the House of Lords and criminal division court (appeal) decide the legal
precedence according to the intensity of the crime. In some certain cases case laws takes other
EU laws’ help to resolve the situation.

Statutory laws’ application in court: These laws have written format and they are under certain
bodies. The law structure varies from administrative and common laws as per the court’s
decisions. Public and private acts from certain parts of UK are included in the law framework. In
this case the laws pass through the houses of parliament to get approval and use instruments like
secondary orders, rules and regulations as statutory instruments (Zander, 2015). The UK states
code and local government sections also include additional rules and regulations as per
approvals. The written structure is important in statutory definition. As an example, the legal
service act is written in the 1990 c.41.  Moreover Laws of property and trustees act are in
chronological volumes of UK legal framework. The Halsbury statutes also include changes and
reform structures of statutory laws.

Page | 6
Task 2

P3 Using specific examples illustrate how company, employment and contract law has a
potential impact upon businesses

To
Smith
Sub: Advice on company law

Dear Smith

Your initiation in the freighting and shipment industry and confusion over naming the same
business is quite a common problem which business shareholders face. But, company name is
not going to be a serious problem for the company debts. If you take the example of famous
Salomon case of 1896 you can easily find out from the result that company and its owners are
not taken as the same personality. Moreover, according to the old company act 1862 the shoe
company and Mr. Solomon was defined as two separate legal personalities and company debt is
not   the owners liability (Percival et al, 2013). The reformed structure of that old company act or
the modern company act 2006 defines a valid company with some major identifiable factors. In
2009 with the 1300 sections of the law it has changed into an act. According to this new act the
company rules for naming has updated. Therefore you should consider all the terms to remove
your confusion about naming. So, do not use already registered names or similar (pronunciation,
spellings) names for your company. In case of similarity you need prior permission as well as for
sensitive words also. Further, you can use 60 characters maximum and ensure your registration
as trademark (Amato, 2015). Finally, for business name do not use Ltd, LLP or PLC according to
the type of company. Your trademark will take care of the same. Therefore, work on the
companies house register before naming.

Good luck for you new business.

From
Legal advisor

Page | 7
To
Smith
Sub: Advice for employment law
Dear Smith

According to your situation in the company you have faced a grave problem of race
discrimination in your workplace. According to the UK labor law and employee rights act 1996,
your right as an employee is violated in the company directly. You can also take the help of
equality act 2010 which is defensive against race and other discrimination in UK. Moreover,
according to race relations act 1976 a person cannot treat other persons less favorably due to the
color of their skin (Rooney, 2016). Therefore, Smith (Company owner) cannot apply his law
considering the skin colors of the Nigerian community as per his bad experiences in Nigeria. As
he ordered you to refuse orders from customers from Lagos area due to the way he was treated,
this is a direct race discrimination case. You can take the example of 1990 case of James verses
Eastleigh where a sexual discrimination had been identified. The most appropriate example for
you may be the famous 1999 case of Wethersfield verses Sargeant where the Ltd had
unfavorable policy for colored and Asians. So, you can seek justice against this direct
discrimination act in the court of law using race relation act and employee right act (Lo, 2016).
Finally, you must remember that in Wilson verses TB Steelwork Company Ltd case is a great
example against racial discrimination where a white woman got justice as she was refused a job
in the Steelwork for her husband’s colored skin (black). So, good luck to you in your fight
against racial acts.

From
Legal advisor

Page | 8
To
Smith
Sub: Advice on contract law
Dear Smith

I have gone through your case and it is clearly a contract violation case. Moreover, you have not
received the exact things you ordered therefore the company is also violating consumers’ right in
this case. According to the consumer right act 2015, you have every right to query about goods
sales contract, transfer contracts as well as the quality and quantity of the goods. In this case,
you have ordered quality products while you have received default products that also in a delay
(Cuniberti, 2013). According to the 29 (1) and (2) of CRA the goods quality and time of delivery
are the responsibility of trader. Moreover, according to 3(a) and 3(b) of CRA the conditional
sales contract is completely violated here. For the delivery of the goods the 28(3) defines that
goods should be exact as per contract and late delivery can cause penalty according to 28(6) of
consumer right act 2015 (Mowday et al, 2013). Finally, the quality of the goods is not
satisfactory. Therefore, you can take the help of S9 of CRA 2015 which defines the term
satisfactory quality as described in the sales contract between the consumer and trader. In this
case, the quality of the products is not same after delivery. So, your criteria have not met
according to the sales contract. Therefore, try 19(6) section of CRA 2015 which gives you the
right to reject products when they are not as per the prior contract (Holcombe and Ipate, 2012).
Use all these acts as your right to get what you deserve.

Good luck.

From
Legal advisor

Page | 9
Task 3

P4 Suggest appropriate legal solutions for the problems

P5 Provide justifications for the use of appropriate legal solutions

To: Dean Rizvi LTD

From: Junior Legal Executive
Date: 01.12.2016
Subject: Advice to John White

According to the contract terms between Dean Rizvi LTD and Abs, John White begins work but
unfortunately falls ill and cannot continue with the contract. He has already designed the
program. Dean Rizvi aimed to sell the program to known department stores to improve their
financial situation. He left the work showing the reason of bad health and kept the work
incomplete. This incomplete situation turned negative for Abs business. There is a similarity of
this case with the 1898 case of Sumpter verses Hedges (Myers, 2013). In the 1898 case, the
builder Mr. Sumpter abandoned the work and came back only to claim his price for the complete
work done. According to the court of law Hedges should not pay him as the contract is
abandoned without completing the work. Therefore taking the case example Fabian has no right
to ask for payment from Big house Ltd (Fraser and Roberge, 2016). Again in the famous case of
Cutter verses Powell 1795 according to the court Cutter had not completed his journey therefore
he was not liable for the payment as per the invisible contract (whatever the reason is). In this
1795 case Cutter’s reason was death while in this current case John White was ill-health. Finally,
the doctrine of part performance according to the principles of equity states that if the part is
done then the worker get reimbursement (Weiss, 2014). Again the section 53(A) defines the
principle of equity for part performance where the contract is valid if and only if both parties
(offering and accepting) completes the tasks defined in the initial contract. Incompletion of task
for any reason means a change in contract terms and the same can change the payment structure
of the contract. But, John White part has not completed due to his ill-health so Dean Rizvi LTD
is not liable to pay the amount as per the initial contract (Hopkins, 2012).

Page | 10
P5 Provide justifications for the use of appropriate legal solutions

To: Dean Rizvi LTD

From: Junior Legal Executive
Date: 2/4/2018
Subject: Advice to Liquidator

Now Dean Rizvi LTD’s ‘down’ situation in business caused the winding up order from the
creditor Rbank with a appointed liquidator George. According to the Federal law George should
be informed about the creditor and shareholder risk (Furmston et al, 2012). Any business
purchase can come with some risks while completing the contract. Therefore, George should
know the liquidation order to identify the risk and negative factors in this case. According to the
federal rule of liquidation the term describes business-ending operations. The business assets are
on sale and the amounts are distributed as per valid claims. The first priority of this liquidation
process goes to the creditor and the very next or remaining part is for the shareholders. The
investors are prioritizing as per the type of investment (Hudson, 2012). Stock owners with
preferences have the first priority and common owners have the last priority. In this case of
liquidation order two significant terms are secure and unsecure creditors. The secure creditors are
usually the asset-holder who has fixed command over the business strategy or structure
(Whittaker, 2012). The most common example of secure creditor can be bank. Therefore during
insolvency sale of the security assets means repaying this type of creditor first (Klick et al,
2012). The second type or unsecure creditor means the floating commander over the business
asset considering different business situation. The most common example of unsecured creditors
is customers, suppliers and contractors etc. Creditors on preference mean the employees with
certain criteria inside the business. In this case Rbank is secured creditor with its fixed charge
over the Dean Rizvi LTD’s assets. Therefore, liquidation order gives the bank first priority in the
sales process (Schindler, 2012). According to the federal law a liquidator receives his/her
payment when he/she correctly identify the secure creditors for the business. Again from the
universal distributing principle liquidator get remuneration while distinguishing the priority of
the creditor (secure). Therefore, George should use the distribution process (above mentioned) of
creditors to end the insolvency process.

Page | 11
Task4

P6 Recommend legal solutions based upon a different country’s legal system and/or a
different legal framework

To
AAD fashion Ltd

Sub: Legal solutions for AAD fashion Ltd

Sir/madam

According to the communications between AAD fashion Ltd and Craig & Sadie couture it is
clear that an arbitration clause is present in the initial contract. If the arbitration clause is proved
as valid in the initial contract then Craig & Sadie couture cannot bring a case in the UK court
showing the reason of contract breaching. So, the definition of arbitration is important in this
case. According to the ‘basic law structure’ arbitration means resolving the disputes using private
techniques while both the parties of the contract are mutually agreed in the same (Patel et al,
2014).Therefore choosing arbitration means choosing a private resolution technique without
taking the help of court. So, the main features of arbitration are mutual agreement of both parties,
choosing an arbitrator according to arbitration rules, neutrality as well as confidentiality of the
arbitration process. Moreover, the arbitration process must be easily enforceable. The next
important term in this case is the arbitration clause. The validity of this clause can save AAD
fashion Ltd from a lot of trouble. The clause in arbitration process identifies the resolution
technique which is private and needs no communication in the court (Patel et al, 2014). The
arbitration clause can be formal or informal. Formal clauses use formal language as per
American association template while informal clauses lack the formal language. Informal clauses
are valid according to suitability, ICC rules in London as well as English law of ‘arbitration in
London’. In Craig & Sadie couture case, if the example of 1983 case ‘English Court in Arab
African Energy Corp. Ltd v. Olieprodukten’ is taken then using the ICC rules the arbitration
clause can be proved as valid (Posner, 1998). According to the ICC rules the recourse
opportunity, standardization of the clause and pre-arbitral reference procedure are major features
of the clause validity (Sommerlad and Sanderson, 2013). Therefore, AAD fashion Ltd should try
to collect the features of the clause so that they can prove the same as valid. Another significant
thing in this case is that Craig & Sadie couture is from England while AAD fashion Ltd is from
Page | 12
Pakistan. So, in this case there is a foreign factor for the validity of arbitration clause. But, this
problem can be solved by the international laws of arbitration. AAD fashion Ltd can get help
from the unitary model law on international commercial arbitration (1985). Another help in the
same case comes from the ‘Convention on the Recognition and Enforcement of Foreign Arbitral
Awards (New York, 1958)’ which recognize the arbitration clause valid internationally (Lane et
al, 2013).  The term international arbitration has gained its importance after the 1985 case of
‘Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.’ where the dealer’s arbitration clause
was valid in front of the court of Tokyo. The uncitral model law also states itself flexible
considering different states and domestic law (Hepple, 2014). Therefore in this Craig & Sadie
couture verses AAD fashion Ltd case, if AAD fashion Ltd can prove the arbitration clause is
valid according to the informal structure of arbitration process then foreign factor cannot make
the same invalid. Now the contract has a valid arbitration clause which is even valid in foreign
law structure also. That means the arbitration clause can work in the court of England also
(Puder, 2015). Moreover, arbitration clause remains same after a number of disputes happen
between the companies. According to the case the Craig & Sadie couture supply was delayed for
twice and after the second delay of supply Craig & Sadie couture has gone to the court of law for
justice (Jensen, 2016). But, the arbitration or the ‘validity of the arbitration’ clause proves that
Dc motors case in the UK court of Justice is not valid as arbitration clause justifies no
communication in the court and private solution for the disputes (Lott and Fremont-Smith,
2016). Therefore, Craig & Sadie couture appeal cannot affect AAD fashion Ltd as long as the
arbitration clause is valid. Finally, AAD fashion Ltd can produce the valid arbitration proof in
court to prove Craig & Sadie couture’s case invalid (Riederer et al, 2012).

Good luck.

From
Commercial solicitor

Conclusion
The report gives precise details of the English laws in the court and its origins with structural
definitions. As the report explains the English law culture for a foreign person it provides the
detail of the law framework from medieval English time. The first part of the report includes the

Page | 13
origin of the English laws with important types like primary and secondary legislations, common
or case laws as well as EU laws. Moreover the same part provides the difference between
common and civil laws in England and Wales considering the common law jurisdiction. Finally
the first part shows importance of organizational laws like tax act, corporate laws as well as
companies act etc. The second part defines the process of law creation via UK government and
its role in law making. Furthermore the last and second part also provides the applications of
common laws and statutory or written laws in the court of justice.

Page | 14
References

Amato, P.A., 2015. The Affordable Care Act: Impact on business. NORTHEASTERN

UNIVERSITY.

Bubb, R., 2014. Choosing the Partnership: English Business Organization Law During the
Industrial Revolution. Seattle UL Rev., 38, p.337.

Callison, J.W., 2015. Seeking an Angle of Repose in US Business Organization Law: Fiduciary
Duty Themes and Observations. U. Pitt. L. Rev., 77, p.441.
Cuniberti, G., 2013. International Market for Contracts: The Most Attractive Contract Laws,
The. Nw. J. Int'l L. & Bus., 34, p.455.
Fraser, V. and Roberge, J.F., 2016. Legal Design Lawyering: Rebooting Legal Business Model
with Design Thinking. Pepperdine Dispute Resolution Law Journal, 16.
Furmston, M.P., Cheshire, G.C. and Fifoot, C.H.S., 2012. Cheshire, Fifoot and Furmston's law of
contract. Oxford University Press.
Habermas, J., 2015. Between facts and norms: Contributions to a discourse theory of law and
democracy. John Wiley & Sons.
Hayek, F.A., 2012. Law, legislation and liberty: a new statement of the liberal principles of
justice and political economy. Routledge.

Feinman, Jay (2010). Law 101. New York: Oxford University Press. 

Grace, D., and S. Cohen. 2005. Business Ethics. 3rd ed. Melbourne: Oxford University Press.

Atiyah, P.S (1979) The Rise and Fall of Freedom of Contract. Clarendon Press 

Deakin, S.; Angus J. and Basil, M. (2013). Markesinis and Deakin’s Tort Law. London: Oxford
University Press. 

Page | 15
McKendrick, E. (2015) Contract Law – Text, Cases and Materials. London: Oxford University
Press 
Mark, L. and Ken, O. (2013) Tort Law – Texts, Cases. 2nd Ed. Harlow: Oxford University
Press, 
Van et al. (2011). Cases, Materials and Text on National, Supranational and International Tort
Law. Oxford: Hart Publishing. 
Allen, F. and Overy, C. (2014) At a Glance Guide to Basic Principles of English Contract Law.
Advocates for International Development, Vol. 3 (2), P. 20-28

Atiyah, P. (2013) An Introduction to the Law of Contract. 4th Ed. Clarendon: Sage publication

Beatson, J. (2014) Anson's Law of Contract. 29th edition. London: Prentice Hall

Collins, H. (2013) Contract Law in Context. 4th edition. Harlow: Pearson Education Ltd.

Goode, R. and McKendrick, E. (2015) Goode on Commercial Law. 7th Edition. New York:
Oxford University Press

Hansard, C. (2013) Consumer Credit Bill. 5th Ed. London: Pearson Education Ltd.

Kaplan Financial Knowledge Bank (2015) Contents of Contract. Available at:

http://kfknowledgebank.kaplan.co.uk/KFKB/Wiki%20Pages/Content%20of%20contracts.aspx.
[Accessed on: 2 June 2016]

MacMilan, C. and Stone, R. (2012) Elements of a Contract. 3rd Ed. London: London University
Press.

Mark, J. (2013) "What is a Winding-Up Order", Business Recovery, Vol. 4 (2), P. 15-26

Mathews, B. (2012) Employer Employee Relationship. 4th Ed. London: Department of labor
publications

McKendrick, E. (2014) Contract Law. 8th Edition. London: Palgrave

Miller, N. (2012) Distance Selling-The Law. Available at:

http://www.infolaw.co.uk/newsletter/2012/09/distance-selling-the-law/. [Accessed on: 2 June
2016]

Peel , E. and Treitel, G. H. (2014) Treitel on the Law of Contract. 13th Edition. London: Sweet
and Maxwell.

Page | 16
Simon, D. and Gillian, M. (2015) Labor law, UK. 5th Ed. London: Prentice Hall

Wedderburn, K. W (2012) The Worker and the Law. 3rd Ed. Harlow: Harmonds Worth

West, D. (2013). West's Encyclopaedia of Law. 5th Ed. London: Sage

Page | 17