Business Law: Analysis of Legal Principles and Practices

This report delves into the intricacies of business law, examining key legal principles and practices that govern commercial transactions and operations. It explores the legal framework surrounding the sale of goods, consumer credit, agency, monopolies, anti-competitive practices, and intellectual property rights. The report provides a comprehensive analysis of relevant legislation, case law, and practical examples to illustrate the application of these legal concepts in real-world scenarios.

Business Law
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Table of Contents
Introduction........................................................................................................................3
Task 1................................................................................................................................4
1.1). Analyse and advice Ben on the legal rules of implied terms relating to the sale of
goods and supply of services.........................................................................................4
1.2). Analyse and advice Ben on the statutory provisions on the transfer of property
and possession...............................................................................................................5
1.3). Evaluate the statutory provisions on buyer’s and seller’s remedies in sale of
goods contracts..............................................................................................................6
1.4). Analyse and advice on product liability legal rules and statutory provisions for
faulty goods....................................................................................................................7
Task 2................................................................................................................................8
Introduction.....................................................................................................................8
2.1). Differentiate between types of credit agreements which Ben as a consumer
could use to buy a car....................................................................................................8
2.2). Analyse the legal rules on termination rights and default notices for Ben...........10
2.3). Analyse the general features of Agency and differentiate between the different
types of agents.............................................................................................................11
2.4). Evaluate the rights and duties of an agent to assist Ben understand his position
once he becomes an agent himself.............................................................................12
Conclusion....................................................................................................................12
Task 3..............................................................................................................................13
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3.1). Outline and explain monopolies and anti-competitive practice legislation in the
UK.................................................................................................................................13
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 now merged in the
Competition and Markets Authority in regulating Monopolies and Anti-competitive
practices.......................................................................................................................14
3.3). Define dominant positions within the EU common market giving examples of
such businesses...........................................................................................................15
3.4). Consider and discuss instances when under EU law, exemptions will be made to
potentially anti-competitive practices...........................................................................16
Task 4..............................................................................................................................21
4.1). Identify and explain the different forms of intellectual property rights.................21
4.2). Outline the principles relating to the protection of inventions through patent rights
and legal rules preventing their infringement...............................................................22
4.3). Describe the principles relating to copyright protection and the legal rules
preventing their infringement........................................................................................23
4.4). Compare and contrast the protection of trademarks and business names giving
practical examples........................................................................................................24
Conclusion.......................................................................................................................25
Reference:.......................................................................................................................26
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Introduction
Regulation of illicit activities or practices is done by law. This report contains the laws
and norms which are applicable to the organisations operating in the business
environment. There are various laws which an organisation is liable to follow in true and
fair manner. This report also contains the duties which are owed by the buyer and seller
to each other while getting into an agreement of sale of goods. It also contains the laws
which provided a safeguard to the consumer against the malpractices which may result
in injury or damage. Some organisations adopt anti-competitive practices to maintain
their dominant position in the market. Such practices are prohibited and are regulated
by Competition Commission. In the last part of the report, various rights are explained
which provide security to the outcome of intellect such as invention, new idea, device,
etc.
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Task 1
1.1). Analyse and advice Ben on the legal rules of implied terms relating to the
sale of goods and supply of services
It is essential that goods or services which are provided by the seller to the buyer must
be consistent with the information or the description provided on the goods or services.
Both the parties get a contract when goods or services are provided by the seller to the
buyer. There are certain terms and condition which can be categorised as expressed
and implied terms. Expressed terms are those terms which are discussed and decided
by the parties to contract whereas implied terms are those terms which are unstated but
are already implied on the parties when a contract is made (legislation.gov.uk, 2018).
It is also stated in section 6 of the Unfair Contract terms Act, 1977 that implied terms
to the contract are required to be satisfied by both the parties to contract and such
terms cannot be ignored before expressed terms.
In accordance with the provision of section 12 to 15 of the Sale of Goods Act, 1979, it
is stated that the quality of the products and services must be as per the set standards
by the authorities and the quality and the quantity of the products must be as per the
description. It is also stated that when a sample is provided to someone, the main
product must be constant with the provided sample (Bridge, 2017).
As per the provided case, Ben is liable to receive compensation in case the product is
not as per the description provided to him before buying the product. Provision of
implied terms provides a safeguard to against such practices.
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1.2). Analyse and advice Ben on the statutory provisions on the transfer of
property and possession
There are two parties to the contract of sale of goods and services and such sale of
products and services are bound by certain terms and such terms are required to be
satisfied. It is the responsibility of the seller to provide genuine products so that buyer of
the product doesn’t have to incur any damages or loss.
There are various sections which provide norms and provisions for the transfer of
rightful property and its possession:
Section 16 of the Sale of Goods Act, 1979 states that only such products goods can
be transferred which are ascertained i.e. unascertained products cannot be transferred
or its title cannot be transferred.
Section 17 of the Sale of Goods Act, 1979 states that when a product is ascertained, it
can only be transferred, when there is an intention to transfer such product to its buyer.
It is also stated in this section that intention to transfer the possession of the products
can be ascertained by the terms of the contract and certain situations of the purchase
and the performance of the parties (Razman, 2014).
There are five rules specified in section 18 of the Act which is to be followed while
ascertaining the intention to transfer the possession of the product. It is mentioned in
the rules that property or the products will be transferred to the buyer when it is
expressed by him. The property or the product is to be transferred without any condition
and certain steps must be taken to develop the product or the property in the deliverable
state. It is also stated in the rules that buyer is liable to make payment for the property
or the products which are delivered to him.
In provided case, Ben is the owner, having the possession of the car as payment in full
is made by him after the delivery of the car.
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1.3). Evaluate the statutory provisions on buyer’s and seller’s remedies in sale of
goods contracts
In accordance with the terms of contracts, there are certain responsibilities and duties
of the parties to the contracts which are to be satisfied or fulfilled by both the parties. In
case of failure to fulfill the responsibilities by any of the party to contract, there are
certain remedies available with the buyer and seller which are as follows:
Remedies available with the seller: As per the provisions of section 49 of the Act, it is
stated when the buyer refuses to make payment of products after its delivery, action can
be taken by the seller. Such action can be taken in regards to the price of the product or
not making the delivery of products at that time, etc. Remedies in such situations are
provided in section 50 of the act stating that such default on the part of buyers, it will be
considered as a breach of contract and can file against such buyer.
Remedies available with the Buyer: Various conditions and remedies available with
the buyer are provided in section 51 to 53 of the Act. Section 51 deals with non-
delivery of the product in which if the seller of the product is unable to make a delivery
to the buyer, action can be taken against such seller and such act will be considered as
a breach of contract. Section 52 deals with delivery to made in particular form or
performance of the contract in a specific way. If the delivery is not made as per the
decided terms, then the buyer has the right to file against the seller. Section 53 of the
deals with the remedies in case of violation of warranty, in such case action, can be
taken by the buyer.
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1.4). Analyse and advice on product liability legal rules and statutory provisions
for faulty goods
As it is well established that if there is a defect in the product or the property which is
transferred or is to be transferred to its buyer, the seller will be held responsible for such
defect. Such goods with the defects are known as faulty goods. It is considered as
negligence on the part of the seller as it is possible that such defect may cause damage
or injury to the buyer. It results in a violation of the duty to take care. This is the duty
owed by the seller to the buyer i.e. duty to take care of his buyer. Standard of taking
care was established in the case of Donongue v Stevenson which stated the
negligence on the part of the producer of the drink. However, in such situation it is
necessary that there must be a violation of duty, such duty must be owed to someone
and due to such violation, one party to the contract must suffer loss or damages.
It is also provided in the provision of Consumer Protection Act, 1987 that it is the
responsibility of the seller if any damage or injury is sustained by the buyer to the
products sold to him by the seller. The product must be free from defect before delivery
of the product is made (Lorraine Conway, 2017).
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Task 2
Introduction
This report contains the description of credit facilities available with the consumer which
provides financial assistance which helps the consumer to enjoy such products and
services which such consumer is unable to afford or enjoy otherwise. It includes the
legislation which regulate such facilities.
2.1). Differentiate between types of credit agreements which Ben as a consumer
could use to buy a car
There are various consumers which are unable to afford or enjoy the products or
services due to its high prices. Such consumer seeks financial assistance from the
market as it provides credit to them on some interest. This attracted illicit practices and
lenders started charging high interest on such credit. For regulating and monitoring such
practices and ensuring the safety of interest of consumers, Consumer Credit Act,
1974 was enacted (Howells and Weatherill, 2017).
As per the provision of Act aforementioned, it provides various credit agreements which
are as follows:
Hire Purchase Agreement: Under this agreement, credit is provided to the consumers
for purchasing or enjoying any product or service. Payment for such product and service
are made by the creditor in whole and the debtor is liable to pay back the money in
installments with some interest (Citizens Information, 2016).
Credit Sale: Under such agreement, the product remains in possession of the debtor,
making him the owner of the product. Credit received by the debtor will be paid to the
creditor in installment.
Conditional Sale: In this agreement, credit is provided to the consumer for getting the
product. Possession of the product is transferred to the debtor and the ownership of the
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product remains with the creditor. Ownership is transferred when the payment is made
in full by the debtor. This agreement is best suitable for Ben.
2.2). Analyse the legal rules on termination rights and default notices for Ben.
A credit agreement can be terminated in various ways, provision related to which are
specified in Consumer Credit Act, 1974 which are:
Rights of Debtor:
Section 94: This section states that the debtor has the right to make payment of credit
in full before the time period as specified in the agreement and after making payment,
such debtor will stand free from all debts.
Section 95: This section specifies that for making early payment of the debt, it is an
obligation of the creditor must provide a rebate to the debtor.
Section 96: This section states that after making of the debt, debtor and his relative if
any stand free from all encumbrances (Hill-Smith, A., 2015).
Section 97: In this section, it is stated that it is the duty of the creditor to provide a
notice to the debtor specifying that request of making payment is received by him and
discharging the debtor from encumbrances.
Rights of Creditor: In case, payment related to the credit is not made by the debtor, it
is an obligation of the creditor to issue a notice specifying information regarding the non-
payment of debt and such act will be considered as a violation of terms of the
agreement. It must also specify that attempt to make recovery of the debt will be made
by the creditor.
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2.3). Analyse the general features of Agency and differentiate between the
different types of agents.
Agency is a body established or formed focusing on one aim i.e. handling or managing
the work and issues of the principal. In this, agents are appointed for managing and
dealing the work of working behalf of the principal. These agents are authorised by the
principal to work in place of the principal and this authorisation is enforced with the help
of agency agreement. The responsibility of any default by the agent will be considered
as the default of principal.
Basically, agents are divided into two categories i.e.
1. General Agents: These are those agents who handle or manages the work of
the principal in general i.e. generally all the work and issues of the principal are
handled and managed by such agents. This agent is authorised by the principal
and their work is not affected by the absence of the principal (Miller, 2015).
2. Special Agents: These are such agents who are appointed by the principal for
performing some specific or particular work. This provides special authorisation
to the agent, however, such authority is limited to a specific task. Such agents
require permission from the principal to perform another task, if required.
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2.4). Evaluate the rights and duties of an agent to assist Ben understand his
position once he becomes an agent himself.
The agents are authorised to make a decision on behalf of the principal. There are
various responsibilities and duties which are delegated to the agent which are to be
performed by such agent. A delegation of right and responsibilities are done by getting
into an agreement known as agency agreement.
There are certain rights of agents which are:
 They can claim their fees, charges or the compensation for the performance of
work.
 Compensation can be claimed for the expenses made in regards to the
performance of the work.
There are certain duties which are to be performed by an agent such as:
 It is the obligation of the agent to follows the direction provided by the principal.
 Such agent must perform the duty by using his knowledge and skills for the gain
of the principal.
 Personal interest in the performance of the work must be avoided.
 All the duties must be performed as per laws or norms applicable to the agency.
(Muller, 2017).
Conclusion
From the analysis made in this part, it can be concluded that there are various rights
available with the consumer against the unlawful practices. There are certain obligations
which are required to be fulfilled by both the parties; otherwise, it results in a violation of
the term of the contract.
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Task 3
3.1). Outline and explain monopolies and anti-competitive practice legislation in
the UK
It refers to such situations or circumstances in which market conditions are very
aggressive and survival of various organisations becomes difficult. In such situation, a
specific industry operating in the business environment dominates the market. An
organisation is said to have a monopoly on the market if such organisation cover 25% to
30% share of the market. Such organisation uses their dominant position for influence
the market and the trade or the operations of other organisation. Under Competition Act
exercising such power of the dominant position is discarded (Whish and Bailey, 2015).
There are various practices which are adopted by the organisation to maintain its
dominant position in the market and to influence the market and the trade operating in it.
Such practices are known as Anti-Competitive Practices and it causes a disturbance in
the market and gives rise to unhealthy competition. There are certain activities such
fixation of price, holding the product, blocking the way to market for new entrants, etc.
All the cases related to such practices are managed and handled by Competition
Commission. This commission monitors the activities of the market and the
organisations operating in it (Jones and Sufrin, 2016).
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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 now
merged in the Competition and Markets Authority in regulating Monopolies and
Anti-competitive practices
In the year 2014, the office of fair trading and the competition commission merged
together into a body i.e. Competition and Market Authority. This body provides services
or handles the cases related to merger and the use of dominant position in the market.
It has the authority to provide an exemption in a certain situation and make an
investigation in relation to having a monopoly in the market.
Competition Commission was established under Enterprise Act, 2002. The main
purpose of this commission was to scrutinise and monitor the activities related to
acquisition and merger. Such activities resulted in a monopolistic market and adopted of
anti-competitive practices. So, this commission was authorised to handles the cases
related to such practices and monopoly in the market. The reason behind this was that
such practices were affecting the market which resulted in encouraging unhealthy
competition.
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3.3). Define dominant positions within the EU common market giving examples of
such businesses
It is essential to control or regulate the use of illicit practices in the market. Under the
Competition Law, dominant position means that holding such place in the market by
which it can influence the market for its benefits. This creates disturbance in the market
and motivates unhealthy competition. It is stated that when more than 50% of market
share in controlled or held by the organisation such organisation is said to be dominant.
Such organisations influence the market share, fixation of price, restriction on entry into
the market for the new entrants, etc. Article 82 of the EU treaty provides safeguard to
the member organisations against such anti-competitive practices (Elsig, 2017).
Competition Commission deals with the cases related to the dominant position or anti-
competitive practices. This involves punishment and penalties which can be equal to
10% of company’s turnover.
It can be understood with the help of an example i.e. a case between Office of Fair
Trading v. IBA Health Ltd. In this case, two companies were merging, the base of both
the companies was Healthcare Software. It was stated that such merger does not affect
the market, however, later, Court of Tribunal reconsidered the case.
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3.4). Consider and discuss instances when under EU law, exemptions will be
made to potentially anti-competitive practices.
The main focus of the competition commission is on regulating and reducing the
activities or the practices which are adopted by the organisation to influence the market
and create disturbance in it. This affects the enhancement of the market and the
organisation trading under it. Use of dominant position is prohibited under the law and
such activities are regulated by the competition commission.
There are various exemptions which are:
 As per safe harbor rules, organisations are allowed to hold 30% of the market
share. Under this, holding high share in the market is allowed and such situations
are considered an an exemption.
 There are rules which limit the use of such practices or products which affects
the market and market conditions.
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Slide Note: This slide explains the legislation of the U.K. in relation with a monopoly in
the market and anti-competitive practices.
17

Slide Note: Under this slide, the role played by Competition Commission and the office
of fair trading is explained.
18

Slide Note: Under this slide, term “dominant position” is defined in reference with the
European market.
19

Slide Note: This slide provides the understanding of Competition Law and exemption
provided under it.
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Task 4
4.1). Identify and explain the different forms of intellectual property rights
In the legal system of UK, these rights hold a significant place. Safeguard or protection
is provided to the new, innovative, creative idea or invention, etc which is relevant to the
art, literature or any specialised work. Such right is provided for a limited period of
times. Only the holder of such rights will be able to use such ideas or inventions.
Permission is required for using such ideas or inventions by any other person;
otherwise, it may attract legal penalties. These rights are as follows:
Copyrights: These are those rights in which work related to art, specialised works such
as the use of graphics, coding or music, etc. are protected against the unlawful use. The
only requirement of this right is that such work must be in tangible form and must be
specific. Only the holder of this right has the authority to make, modify, supply or
duplicate the work (UpCounsel, 2018).
Trade Secrets: These are those rights which protect the formula, device or processes
which are responsible for the success of the organisation and having advantage over
the competitors in the market. These are kept private and confidential by the company
to maintain its position in the market.
Trademark: Under this, protection is provided to the use of the word, mark, phrase,
symbol, etc. to the organisation which uses such emblems for creating recognition in the
market. These rights are only provided when such emblems are distinctive from the
previously registered emblems. These rights are provided for a time span of ten years in
the UK (Wallis, 2017).
Patent: Under this, safeguard is provided to new ideas or inventions by way of rights.
Only the holder of such rights is able to make, use or sell such idea or invention at his
wants. In the UK, safeguard to such invention is provided for a period of twenty years.
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4.2). Outline the principles relating to the protection of inventions through patent
rights and legal rules preventing their infringement.
These rights are issued in the relation which new invention, idea, machine, etc. which is
newly invented. This provides safety to such invention against its illegal use. The
patents are protected under the provisions of Patent Act, 1977 which provides the
authority to the inventor to produce, consume or sell the invention. For getting the
patent globally registered and protecting the invention, an individual must apply to the
Patent Co-operation Treaty (May, 2015).
Under this, invention invented for consumption at home doesn’t qualify to be registered
under the Patent Act, 1977. Such invention must be for the use of public or for research
purposes, etc. Use of such invention without the consent of the patent holder will be
considered as an infringement of patent rights. If any license or consent is provided by
the inventor, only then it can be used, otherwise, such individual will face legal penalties
(Bently and Sherman, 2014).
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4.3). Describe the principles relating to copyright protection and the legal rules
preventing their infringement.
Copyright: It is the form of rational property that grants the inventor of original work and
provides the special rights for its use and distribution. Copyright does not protect the
concepts or ideas but does not include the expression of work. The owner has exclusive
right to authorise or to perform certain work.
Principles of copyright protection:
 Copyright law applies to all creative and intellectual works that can be elaborated
as the copyright applies to a diverse variety of materials that are protected under
law. For example, books, journals, websites etc.
 Works are protected which states that Original work of authorship is protected
which are fixed.
 Copyright protection last for many years which states that it has a lifespan of 70
years.
 Copyright works in public domain which states that it is available at free of cost
without any conditions and limits.
Copyrights can be infringed when the author uses the copyright law without
permission, and infringe the certain rights that include the right to reproduce,
derivate works, etc. If copyright is infringed the owner has legal right to sue for the
infringement in court. It can seek for injunctions in case of violations of copyright.
The owner has right to recover damages and profit from the losses of infringement
(Kolb, 2018).
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4.4). Compare and contrast the protection of trademarks and business names
giving practical examples.
Trademark: Trademark is a recognizable sign, a design that helps to identify the
services or products of a specific cause from others. A trademark proprietor can be
distinct, legal entity and business organisation. Registration of trademark grants the
exclusive right to the owner to use the trademark in relation to services and goods.
When a trademark is registered it specifies the different class of services and goods in
relation to which it can be used. It also enjoys the protection under the Trademark act
1995 (Swartz and Cheng, 2017).
Business name: This name can be used to identify the business, not the services or
product. The business name identifies the legal entity. By incorporating a business the
owner of the business will be preventing other business by registering the similar or
identical names. In the process of incorporation, it is the duty of business that it does
not prevent another individual’s from selling the services and goods under the same
name (Stim, 2017).
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Conclusion
From the above report, it can be determined that different laws and principles are
analysed in organisation. For the development of business organisation it is necessary
to adopt the different practices and standards for the better functioning in organisation.
It is essential for the company to provide them every information related to the product
so that customers can rely on that information and easily purchase that product. In case
of incorrect information, the consumer causes harm or injury, for that the organisation
will be liable and it can be state of negligence. There are various laws in context to the
products and services that include the consumer law, sale of goods act that provides
the remedy to parties.
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