Legal Issues in Business Law

This article discusses the legal issues in business law, specifically the determination of a sale in law of agency and its legality. It also explores strategies used to manage risks in organizations, substantive laws that may affect a business, and the relevance of internal controls in promoting compliance with laws and legal risks.

Running head: BUSINESS LAW
Business Law
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BUSINESS LAW
Legal Issues
The legal issues in this case is the determination of a sale in law of agency and its
legality. The agency law is an area in commercial law that deals with quasi-contractual,
contractual and non-contractual fiduciary relationships with an agent contracted to create
legal relationship with a third party on behalf of the owner (Akter, et al,2016).
Case
Patrick in this case is the agent and Kerry is the owner of the house. Patrick an agent
working for Kerry and is selling the house at $250,000 for Paul and Rick a young couple.
Kerry wanted $ to sell the house between $250,000 and $300,000. The problem is the
contractual agreement signed to sell the house to the couple without the consent of Kerry
which offended her.
Compare strategies used to manage risks in an organizations business activities
There are different strategies that are used to manage risks in an organization. Risk is the
probability of a loss or an event occurring and its consequences. Risk focuses on what could
probably go wrong. In this case, Kerry wanted more in sale of the house. Since she did not
know the demographics of the real estate commercial market in Red Deer, she had to engage
a real estate agent in Patrick (Mitnick, 2015). This is a strategy in mitigating risks by
delegating duties to an agent. An agent in property law functions include;
1. Principal-Agent relationship where the agent has the legal powers and mandate to act
on behalf of the principal in sale and purchase of property
2. The agent must act on the best interest of the principal and cannot simply use their
positions to make money out of the transaction or the business. This is called the
fiduciary duties.

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The strategies used to manage risks is by delegating duties to other competent organizations
for better results.
Synthesize substantive laws that may affect a business
There are many substantive laws that may affect the agency business in this case
1. Rule-making- this is the process of making, formulating, amending or even repealing
particular clauses or rules in agency laws.
2. Disclosure of information which is a law that requires an agent to disclose particular
information or not to the third part. However, in business, it requires maximum
disclosure of information for avoidance of legal issues that may follow.
3. Adjudication and enforcement which is a process of formulating new laws and
enforcing the same (Soudijn, & Zhang, 2016).
This laws may impact the business either positively or negatively.
Relevance of internal controls in a business to promote compliance with laws and legal
risks
Internal controls in business ensure compliance with laws and business procedures. It
ensures that there are no collusions that may lead to legal risks and promote compliance. In
the case of Kerry and Patrick, internal controls should have ensured that Patrick takes time
and informs his client first before signing the contract (Thompson, Strickland, & Gamble,
2015). Kerry probably saw it as a collusion with the buyers to deny her maximum benefits
from the sale. Internal controls in business ensures that the business
1. Ensures ethical values and integrity in business
2. Constant flow of communication and information
3. Monitoring

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4. Risk assessment in business
References
Akter, S., Wamba, S. F., Gunasekaran, A., Dubey, R., & Childe, S. J. (2016). How to improve firm
performance using big data analytics capability and business strategy
alignment?. International Journal of Production Economics, 182, 113-131.
Mitnick, B. M. (2015). Agency theory. Wiley encyclopedia of management, 1-6.
Soudijn, M. R., & Zhang, S. X. (2016). Principal-Agency Theory in Illegal Markets: Cooperation
and Conflict Among Chinese Loansharks. Asian Journal of Criminology, 11(3), 231-247.
Thompson, A., Strickland, A. J., & Gamble, J. (2015). Crafting and executing strategy: Concepts
and readings. McGraw-Hill Education.