Business Law Assignment : AAD Fashion Ltd

Business Law

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1 ...........................................................................................................................................3
P1. Explain the different origin and sources of law and that organisations must comply with. .3
P2. Role of government in law making and Application of statutory and common law in the
justice courts................................................................................................................................5
TASK 2. ..........................................................................................................................................7
P3 How company, employment and contract law has a potential impact upon businesses........7
TASK 3..........................................................................................................................................10
P4. Presenting the legal principle and devise and the position of a company .........................10
P5. Provide justifications for the use of appropriate legal solutions........................................11
TASK 4 .........................................................................................................................................12
P6 Legal letter to AAD Fashion Ltd ........................................................................................12
CONCLUSION .............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
Business law combines all of the laws that govern or run the business. This includes
activities of how to start, buy, manage, control and close or sell the business. Laws introduces by
business laws are necessary to be followed by all the business firms. Business law consists of
state and federal laws and administrative regulations as well. It is also known as commercial law
or the body of rules. There are different forms of legal business i.e. sole proprietorship who
individually bears the risk involved in the business. This report covers the basic nature of legal
system, impact of law on business and appropriate legal solutions to these problems. Apart from
this it will cover role of government in law making, sources of law. And lastly it will cover legal
solutions based upon different country's legal system.
TASK 1
P1. Explain the different origin and sources of law and that organisations must comply with
English Law refers to legal system that is applied within the territory or jurisdiction of
England and Wales. It comprises mainly criminal and civil law where each branch has its courts
and procedure. England and Wales is a Common law system which is different from the law of
other countries. Different sources are: Statutory/ Legislation: It refers to laws which are formed by legislation and produced by
Parliament which originates from decisions made in other courts. After legislation has
been proposed, it begins in the form of bill that passes through readings in both the House
of Common and House of Lords and after completing the procedure it receives Royal
Assent and become a law. It is different from administrative laws which is applied by
legal executives. Common Law: The English Legal System is based on common law which is also termed
as case or precedent law that is been developed by Judges and Courts. Judges create
Common Law by delivering written judgements about the cases before them. The aim of
Common Law system is to ensure that the law remains “common” throughout the land. European Union: EU law relates to a wide range of different matters from agriculture to
competition law and it applies to all the members of European Union which consist of 28
countries. It is divided into two parts i.e. Primary and Secondary legislation. Where
primary legislation are the basic rules for all EU action. Secondary legislation includes

directives, regulations and decision which is derived from principles and objectives set
out in treaties.
Laws that organisations must comply with:
It refers to the system of rules created by State which is enforced through courts and the
legal system in the society. It provides remedies, sanctions and regulates behaviour. There are
certain laws which governs functioning and operation of Business Entities and it is important for
them to comply with these laws:
 Employment Law: In UK labour laws regulates the relations between workers,
employers and trade unions. It includes provisions that must be abide by employer in
order to ensure employees are treated fairly. In United Kingdom e geoyees get benefit
from minimum charter of employment rights under various acts and regulations. The
main employment statues include Trade union and Labour Relations act 1992 and
Equality Act, 2010 these statutory provisions are applicable to both foreign employees
working in UK and employees from the United Kingdom working abroad. Employment
Act covers these areas of issues i.e. Minimum Wage, Leave, Redundancy and
Termination of employment and Pensions (Bolling, Bullic and Siilsalu, 2017). There are
various case laws which gave their verdict for protecting the rights of employees. For
instance in case GAB Robins (UK) Limited v Triggs [2008] ICR 829) the employer was
asked to provide compensation to its employee because the conduct of employer caused
constructive dismissal of its employee.
 Company Law: The Companies Act 2006, is created by an Act of Parliament of United
Kingdom which forms the primary sources of UK company law. It laid down the
powers / authorities that can be used by directors and roles and responsibility that director
must need to follow in order for the success of company.
 Consumer Right: The term refers to provide Right to safety and Right to be informed. It
is the duty of company to made availability of information required for weighing
alternatives and protection from false and misleading claims through advertisements and
labelling practices. This act came into force on October 1, 2015 stating that company who
dealt in selling goods and services will need to comply with Consumer law. Further, there
are legislation for firm who sells product or services through online platforms need to
inform their consumers through email confirmation (Giliker, 2017). For example though

customers are not directly involved in contract with company's owner but as per
Stevenson v McLean (1879 80) LR 5 QB 346, the consumer has the legal authority to
seek the information related to product and services and owners have legal duty to protect
their rights to use services. The service cannot be denied on the basis that consumer
demanded for information.
 Competition law: This legislation is formulated in order to prevent unfair business
practices that would suppress healthy competition and unfairly reduce choices available
to consumers.
P2. Role of government in law making and Application of statutory and common law in the
justice courts
Parliament is the supreme law making body in UK and it is sovereign which implies that
it can pass any legislation in the country. The law passed by Parliament is superior to others
sources of law. Bill is proposed by government minsters in the form of Public, Private, Hybrid or
Private Members Bill (Avey, Wernsing and Palanski, 2012). House of Commons and House of
Lords make the Parliament and the procedure of passing a Public Bill can start in any of the two
houses. Role of government and Stages of law making process: Bill: It refers to proposed law which is presented to Parliament for discussion. The
proposal can be for new law or to change the existing law. First Reading: In First Reading Bill is officially introduced in parliament before the
House of Commons and the legislative procedure starts with the first reading. At this
stage MP's have the time to prepare for discussion over the bill. Second Reading: After, presenting the Bill between both the houses it goes to second
stage where it is being debated and the opposite parties keep their opinions and views
regarding the bill. MP's are asked to provide their vote for the bill and from the second
reading, then it moves onto Committee Stage. Committee Stage: The Bill after passing the Second reading is forwarded to a Standing
Committee for further examination. The aim of this committee is to ensure that each
clauses in Bill is examined properly. Report Stage: The examined Bill must be presented for discussion in House of
Commons, so that each members can get a chance to place recommendations or opinions
on any amendments.

 Third Reading: It is the final part of debate regarding the bill within House of Commons
and there is a vote and if the Government has the majority, the bill is then passed to the
Royal Assent. Royal Assent: It is the last stage of statutory law formation wwhere the Bill is given
consent of Royal Assent and it becomes an Act of Parliament after passing all the stages
of Law making process.
Application of statutory law in the justice courts.
It is statutory law that deals with legal relationship citizen and the country. In UK
statutory laws are created by the members of Parliament with the consent of Royal Assent. These
laws define rights and duties of people as a citizen of United Kingdom. These laws are applied to
decide the fate of any cases that may occur in country. Statutory legislation is formed in all the
matters like; Trade union and Labour Relations,1992, Equality Act, 2010 and Consumer Right
act ,2015, etc. Thus it guides industry, business corporations and citizens on how to fulfil their
roles and duties (Heeney, 2012)
Application of Common law in the justice courts.
Common Law refers to those regulations which are proposed and framed on the basis of
Judges precedings where they interpret the law using their knowledge of legal precedents. These
laws are formed on everyday basis without harming the countries legal system. The UK legal
system is based on Common Law which helps in providing interpretation and clarifications when
facts of instant cases are applied to codified law. Common Law helps in keeping statute law up
to date and help in keeping pace with modern solutions and problems. It applies in the case of
injury, harm or loss to property, rights of another person and violation of moral or social ethics.
Though precedents are used as the basis of common laws but judges must ensure that
there common laws must not violate basic statutory laws. However, if there is conflict then
parliamentary laws are given preferences. The parliament are considered as the supreme body for
making laws so the laws passed by them are precedent over other law sources. There are
different types of courts which passes judgements in different operational aspect.
 Civil courts resolves the dispute between individuals by appropriate remedies. Most of
the case laws proposed for civilians are originated from these courts.
 Criminal courts are responsible to determine if defendants are innocent or guilty. Their
verdicts can affect the judgements of future verdicts of similar type cases.

 The difficult financial cases are heard by superior courts which are not limited by
geographical boundaries as compare to inferior courts. Thus, superior court can have
dominating impact on case law formation.
According to doctrine of judicial precedent the courts at the lower level of hierarchy must obey
the decisions and legal reasoning made by upper courts.
TASK 2.
P3 How company, employment and contract law has a potential impact upon businesses.
Legal advise to Adebonojo:
In the above case, Adebonojo runs a Western Union money transfer and cargo businesses
based initially in US and Headquarter in UK. Adebonojo wants to create a new firm and need to
create a brand name within freighting and shipment industry. Thus, Adebonojo needs to address
to Company law for naming its new company in United Kingdom.
The Companies Act is the legislation that governs the company law in United Kingdom.
It sets certain rules and regulations that need to be followed by the Business Entities in order to
avoid any legal preceding. Company law is applied from the initial stage of forming and naming
a company (Howells and Weatherill, 2017).
In order to create company Adebonojo must be in compliance with following legal regulations:
 As per the company act 2006 it will be necessary for Adebonojo to register their new
company with complete set of supporting documents. The owners will require
subscribing their names to memorandum.
 In order to complete the registration details such as company name, address and type of
company must be clearly stated.
 If Adebonojo plans to adopt different set of model articles than the standard one which is
under company regulation 2008 then, the owners will be require mentioning the
company's regulations under article of association.
 The details of shareholdings and capital statements are also required to be attached under
statements ss9 (4) , (10) and ss9 (4) ()
 At last for completing the procedure the owners are required to give statement of
compliance s 13 so that registrar can verify the compliance related evidences.

The choice for business name is governed by Part 41 of the Companies Act, 2006.
Adebonojo needs to check the Companies House Index of Registered and Proposed Company
Names by vesting either to Registrar officer or through Companies house websites. Adebonojo
needs to carefully chooses a brand name for it services because in choosing a brand name the
same consideration is applied while choosing for any Business name. The brand names should be
unique and help in building a Goodwill for the firm among suppliers, consumers and employees.
There are certain legal consideration while choosing a company or brand name these are:
 Companies House will not register if the business provides impression of being registered
with Her Majesty government or any local or public authority.
 The name should not include a sensitive words or expression in it.
 The suggested name should be the same as or too similar to the name of another
registered company.
 It should include appropriate ending like; Plc, Ltd or CIC, etc.
 The name must not include certain punctuation, characteristics or symbols (Konzelmann,
Fovargue-Davies and Schnyder, 2012).
Thus, Adebonojo needs to consider all these restrictions while naming the new branch of
its company. Further, if Adebonojo fails to comply to these regulation then it will have to bear
certain legal proceedings :
 The initial step of registering a company starts from naming it when Adebonojo do not
follow the guidelines prescribed by the Companies Act, 2006 then Adebonojo will not be
able to registered his company in Companies House.
 There will be monetary penalisation of not complying to the laws and regulations
prescribed by Companies Act, 2006.
 Further, if the company is not registered under the Companies Houses then there will be
harm to Trademark of the firm. Adebonojo will face difficulty in obtaining Financing from any government bank or
financial institution as Company operated by him is not registered under the Companies
Act, 2006.
Legal advise to Chukwuyedi:

In the above case, Chukwuyedi has left the job from the company of Adebonojo as
Chukwuyedi feels that he has been hurt by the unethical comment of Adebonojo towards his
community and culture. The Chukwuyedi has certain rights under employment act.
Employment Act is the Statutory legislation that defines the duty of employers towards
their employees and vice versa. This legislation guide the rights of employees with regard to
their work and protect employees from being discriminate or victimise at workplace. The areas
covered under employment act are Employment Contracts, Minimum wages, Redundancy and
Termination of employment and Pensions. The Chukwuyedi cannot leave the organisation
without serving the notice period of company. Chukwuyedi and Adebonojo is tied under the
Contract of employment that governs their work (New, 2015.). Contract of employment implies
to both the parties where employers have great responsibility towards employees at the other
hand employees are entitled to statutory protection against unfair dismissal.
Chukwuyedi can claimed for constructive dismissal under the basis for racial
discrimination. Constructive dismissal can be claimed when employer create a hostile
environment for employees.
Constructive dismissal by Chukwuyedi can impact the business of Adebonojo as the
company can claim for Injunction in order of breaching the contract. Further, Chukwuyedi needs
to prove that there was serious breach of their expressions in justice courts.
Under the equality act 2010 the employees cannot be discriminated on the basis of
gender, age, religion, race and disabilities. Chukwuyedi has been directly discriminated by
offensive comments for his culture. Though the employer did not try to create any adverse
condition for him but he has been humiliated on the grounds of his culture and race. The instance
of racial discrimination was observed in case James v Eastleigh BC [1999]. On similar basis
Chukwuyedi can appeal for constructive dismissal and cannot be considered guilty under
contract breach.
Legal advise to Bob:
In the above case, Adebonojo has breached the rights of its customer Bob by not
delivering the product on time and the product was not in proper order.
Consumer protection refers to legal measures that are intend to give special rights to
consumers. The role of Consumer protection is to deal with offering protection to those
individuals who are buying good/services for their personal use or for reselling it back. It is

important for business to ensure that it must comply to Consumer Protection Law. Bob can
claimed return of its money from Adebonojo and can file case in order of late delivery and
improper delivery of product. Further, there are legal proceedings on failure of company in order
to comply with Consumer Protection Law which are:
 Legal proceedings will be taken against Adebonojo for not meeting the customer safety
and privileges regulations as part of providing misleading products.
 Investigation of company and enforcing of legislation by Consumer regulators.
 Legal action from consumer itself for the damages caused to them (Acquisti, John and
Loewenstein, 2013).
TASK 3.
P4. Presenting the legal principle and devise and the position of a company
In the context of above case scenario, the legal principle and devise means to pass the the
company to another as per the will. In the case, Dean Rizvi LTD takes an action to wind up the
company but before that they has to monitor all the legal principle regarding the contract of law.
Here, devise means to direct pass out the company and the person to whom it is given is known
as Devisee (Henderson and Muscat, 2018). But at the time when will is made, the person should
be clear in mind to whom the company is handed over and that person should not be acting under
any influences. All the local laws should be consulted in order to meet the specific requirements
and the will should be vary by state. Before paying John for his work to carried out, the Dean
Rizvi LTD should know the actual position in the given case scenario.
As the company takes a decision of winding up the company, the assets of the company
are proper distributed and as per the section 420. it is to be advised to John after winding up a
company all the assets should be distributed to the whole creditors of a company, only those
assets are available for the distribution which are realized by the liquidators after discharging of
all the due debts of a company (Graewe, Horst and Séré, 2018). All those assets that are further
realized from the management team of Dean Rizvi LTD of a business as it elected by the
liquidators i.e. John. On the other side, the assets should be distributed that may be recovered in
the course of winding up through discoveries which are made from the companies records and
other information available in a company.
The assets of the company are paid to secured creditors first with a fixed charge over he
company's asset and on the other side, unsecured creditors can claim to balance in the liquidation

, if the realization of the assets produce an insufficient funds (Kratz and Schöneborn, 2018). The
preferential creditors of Dean Rizvi Ltd gives a priority at that time when the assets are
distributed to pay expenses of the liquidation which also includes the payment of tax bills and
employees salaries too then comes the creditors with floating charges and the ordinary unsecured
creditors where any surplus can be distributed with the stakeholder.
P5. Provide justifications for the use of appropriate legal solutions.
Case law:
BNY Corporate Trustee Services Ltd v Eurosail Re Danka Business Systems Plc (in
liquidation), sub nom Ricoh v Spratt Neumans LLP v Andronikou.
By referring to this case laws David Rizvi can apply another process of liquidation that
is :
Creditors Voluntary Liquidation: It is the process of liquidation that is followed for liquidating
an insolvent company. In this process director take actions to prevent company from getting
Compulsory Liquidation and prevent it from the harm of Winding Up petition. Further, there is a
benefit to both director and Creditor has there is proper distribution of company assets and
Unsecured creditor are also paid out of the sale of asset (CVL LIQUIDATION PROCESS.2018).
Once the company is fully liquidated and assets of that company are sold, the legal
proceeding collected are utilised to pay off the liabilities. The collected proceedings is utilised to
pay off the creditors. A dissolved company does not have adequate assets to pay in full the
liabilities that was own by its creditors. The assets of the estate comprises all the tangible and
intangible assets through which insolvent company is benefited by interest at the date of
insolvency.
Legal advise to John for distributing Companies asset:
Ordinary money is diffuse in proportion to the liabilities due to each creditor within a
class. The order in which distribution is done is:-
 First ranking claims: holders of fixed charges and creditors with a ownership interest in
assets.
 Expenses of insolvent estate
 Preferential creditors
Holders of floating charges shareholder (Labatt and Forrest, 2016).

TASK 4
P6 Legal letter to AAD Fashion Ltd
To,
The legal advisor
AAD Fashion LtD
xy city, 11112
Subject : Notice for the legal action against AAD fashion Ltd due to failure in achieving
delivery of goods.
Respected sir,
With regret we inform you that despite giving you two chances your organisation AAD
Fashion LtD failed to ensure the delivery of 50 tonnes of garment as per the contract to our
client Craig & Sadie couture. Thus, AAD Fashion LtD is found guilty for contract breach and
Craig & Sadie couture is taking legal actions against AAD fashion.
Conditions and legal actions against the contract breach:
AAD fashion Ltd failed to deliver the products. Though organisation was given several
opportunities to ensure the delivery but AAD fashion failed to assure the same. As organisation
has not delivered goods the contract is breached and Craig & Sadie couture is liable to take
legal action against the same. Craig & Sadie couture can claim the financial penalties or can
impose interest on the sum. UK justice court can also order AAD fashion to ensure delivery as
soon as possible or any strict legal actions such as liquidation can be charged. It may also cause
huge damage to the brand value of the AAD fashion.
Alternative legal solution:
Both the organisations can resolve the matter with alternative methods like arbitration.
The contract already include the arbitration clause but Craig & Sadie couture can agree for
arbitration only if its clauses are satisfactory to the Craig. Both parties can resolve the contract
breach by an adjudicator who is unbiased. Judicial proceedings may take time which not be
good for both the parties in terms of cost and time. Arbitration can resolve the conflict in
limited time (Harrison and Ryder, 2016). ADD Fashions must provide the valid reason for not
providing delivery. The organisation must also provide compensation to Craig couture against

the damages cause to Craig due to delay. If ADD fashion again failed to ensure delivery from
the date given by Craig then, ADD fashion will provide the interest of delay on daily basis.
Institutional arbitration:
In this type of arbitration institutes like London court of international arbitration (LCIA)
and the ICC (International chamber of commerce) can intervene in the matter. The institute will
follow its own set of regulations to resolve the conflicts. The critical advantage of institutional
arbitration is that it attempts legal solutions in a more formal way as compare to the Ad hoc
method. Institutional arbitration includes highly skilled and experienced authorities to solve the
issue. This arbitration method may involve bureaucracy which can lead to higher costs and time
delays. It may happen that both organisations need to give response in unrealistic time frame.
Ad hoc arbitration:
Craig & Sadie couture and ADD Fashion Ltd can agree for arbitration with some other
means instead of institutes. With mutual agreement both organisations can appoint the
arbitrators, laws and procedures for arbitration. This type of arbitration is more flexible as
compare to the institutional type (Moses, 2017). It provides the faster and less expensive
solutions. Flexibility and low cost are the major attraction for this type of arbitration. One of the
disadvantage of this type of method is that the final conclusion and decisions are dependent on
interest and coordination of both partitions in resolving the issues. The failure to this may lead
to ultimate direction of legal actions.
Hope we will get your response soon so that further actions can be taken.
Xyz, commercial solicitor
ABC
CONCLUSION
Business law is defined as the set of legal regulations which an organisation must follow.
The proper implications of these laws enable organisations to execute their business activities
without any interference. These laws are also essential for resolving the disputes which arises
due to business interests of each organisation. The report has explained the different sources of

laws and how these laws are applied by the judicial bodies. The report has described the impact
of employment law, company law and contract law in resolving the disputes between various
organisations.
With the detailed analysis of various case studies the report has applied different legal
principles and solutions to the operational activities of the organisation. It will justify various
legal solutions with the case laws references. The report will describe the legal rights and the
alternative legal solutions for resolving business disputes within organisation. It can be
concluded from the report that organisation must follow legal advices and regulations in order to
avoid the legal conflicts. The improper implication of the business laws can lead to the financial
as well as brand value losses. Thus, these business laws are helpful in establishing mutual
agreements between the organisations.

REFERENCES
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leadership: The mediating role of employee voice and psychological ownership. Journal of
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Harrison, K. and Ryder, N., 2016. The law relating to financial crime in the United Kingdom.
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Howells, G. and Weatherill, S., 2017. Consumer protection law. Routledge.
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from the Novel Mildred Pierce and the Road to Entrepreneurial Success. Journal of Legal
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Online
CVL LIQUIDATION PROCESS.2018. [Online. Avalable Through.
<https://www.dissolve.com.au/liquidation-process/>
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