Business Law: Legal Rules and Terms, Credit Agreements, Agent Duties

This document provides an overview of business law, including legal rules and terms related to sales of goods act, statutory provisions on transfer of property and possession, buyer and seller remedies, and product liability provisions. It also discusses types of credit agreements and the rights and duties of an agent. The content is relevant for students studying business law and related subjects.

BUSINESS LAW

INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Legal rules and terms related with sales of goods act...........................................................1
1.2 Statutory provision on transfer of property and possession..................................................2
1.3 Provisions on buyer and seller remedies...............................................................................2
1.4 Product liability statutory provision......................................................................................3
TASK 2............................................................................................................................................3
2.1 Types of credit agreements...................................................................................................3
2.2 Rules, termination rights and default notices........................................................................4
2.3 Difference between various types of agents..........................................................................4
2.4 Rights and duties of an agent................................................................................................5
TASK 3............................................................................................................................................7
3.1 Monopolies and anti-competitive practice legislation in UK...............................................7
3.2 Role of competition commission within context of monopolies and anti-competitive
practices......................................................................................................................................8
3.3 Dominant position within EU common market....................................................................8
3.4 Applications of EU exemptions............................................................................................8
TASK 4............................................................................................................................................8
4.1 Different forms of intellectual property................................................................................8
4.2Principles relating to protection of inventions through patent rights.....................................9
4.3 Principles relating to protection of copyright........................................................................9
4.4 Compare the protection of trademarks and business names...............................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business law is all about legal norms, beliefs, rules and regulations that is amended by
legitimate bodies for entire corporate order to prevent buyer or seller from exploitative activities.
In fact, it helps associations in various manners such as; reduce the possibilities of
misinterpretation, frauds, wrongful conduct and so on (Mann and Roberts, 2011). Thus, every
small and large firm are adopting several business laws to run their organization in smooth
manner by fulfilling each or every formalities of legitimate bodies. Therefore, assignment is
going to highlight the major norms which are used by distinct companies while executing their
business activities like; sales of goods act, consumer protection, employment laws, legal notices,
liabilities related with products and so on. Moreover it shows the benefits of norms for company
in various ways as well as prevents several intellectual properties from getting misused.
Furthermore,
TASK 1
1.1 Legal rules and terms related with sales of goods act
According to the section 12-15 of the Sale of Goods Act 1979 , the implied term is only
applicable for those goods which are sold for a consideration of money. The Act of 1979 is
simplified in two parts, Part I signifies the implied terms in contract for the supply of goods ,
where as Part II describes the implied terms in contract for services.
Part I
It is comprise of two types of implied terms, the first one is of contract for the transfer of
property in goods, these terms are implied for work and material and barter, for which the
applied being obtains the ownership of goods; Second one is of Contract for the Hire, it is
applied on such, where a person bails to agree the bailment of goods to another one in the form
of hire (DAILY, KIEFF and WILMARTH , 2014).
Part II
It is consist of, Implied term in contracts for the supply of services, in this part a person
makes an agreement of carrying out a service, it is also consist of transfer of goods, section 13 of
the Act deals with care and skill of the supplier, that the supplier shall take reasonable care while
the service of goods (Wilson v Best Travel Ltd,1993), a supplier shall carry out the service in
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reasonable time (section 14) , also it is mandatory to provide consideration to the supplier by the
consumer, section 15.
1.2 Statutory provision on transfer of property and possession
The main purpose of the contract for the sale of goods is the transfer of property from
seller to buyer, in the case of damage of goods, according to the section 20 it is generally the
owner who is liable. Also in the bankruptcy circumstances it is essential to clarify the ownership
of goods.
If the property or goods has been delivered to the consumer and payment has not been
made by him then seller can initiate a suit for the payment of said consideration, if the good is
not passed then he can only sue him for its non acceptance.
In a sale of Unascertained goods, there are two provisions for the transfer of property in the
Sale of Goods (Amendment) Act 1995, the first one provides with the principle of 'ascertainment
by exhaustion', the second one provides with the introduction of a new concepts of co-
ownership of a bulk good (Folsom and et. al., 2012).
1.3 Provisions on buyer and seller remedies
A seller is entitled for two types of remedies Personal and Real remedies. In Personal
remedies a seller can file a suit against buyer for the non payment of consideration, section 49
and for the damages occurred due to the non-acceptance of the property, section 50 (WL
Thompson Ltd v Robinson (Gun makers) Ltd, 1955). when he payment of consideration is not
provided to the seller then he is entitled for the Real remedies, they are Lien, Stoppage in transit
and resale. Lien is described from section 41 to 43, according to which a seller has right to hold
the possession of goods until the consideration has been paid to him, but he cannot resell it.
Stoppage in Transit, as discussed from section 44 to 46, a right of seller to block the goods in
transit to the buyer, attain its possession and hold it until the consideration has been paid by the
buyer. A seller is not authorised to sell the goods until the goods are of perishable nature, when
the notice of resell has been provided to the buyer and he has failed to pay the consideration
amount in a reasonable period and when there is the right of seller which has been expressly
reserved in the situation of buyer's default, section 47 and 48.
Similarly, a Buyer is entitled to get remedies in certain circumstances like, he can reject
the goods where the seller do not comply with the terms of contract (section 11 and 15A). He is
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also eligible for the damage incurred due to the non delivery of the good (section 51) and breach
of warranty (section 53). A buyer has all rights to sue for specific performance of contract.
A buyer is a consumer and some additional rights has been given to him under the sale and
Supply of Goods to Consumer Regulations 2002 such as, repair and replacement under section
48B and under section 48C, reduction of the purchase price or rescission of the contract.
1.4 Product liability statutory provision
Part I of the Consumer Protection Act 1987, signifies the strict liability for personal injury
and damage, caused due to defective goods . A producer is defined in section 1(2) as the
manufacture of the product. Those who are liable for injury and damage caused due to defective
products has been discussed in the section 2 of the Act, that is, the producer and the one who
imports the product.
According to the section 3 a product's defect and its liability has been discussed. The court
has a wide range of reported cases of liability under the Act (A v National Blood Authority), also
there are certain Defences has been given to an action under section 4 of the Act of 1987.
TASK 2
2.1 Types of credit agreements
Credit Agreement is a legal binding contract between two people, one who is debtor and
one who is creditor. It is agreed by both the parties and also mentioned with all the details of the
agreement condition like when the debtor will repay the amount, what is the interest rate on
which the creditor lend the money to borrower, in how many days the borrower will pay the
amount and all other rules and regulation associated with loan. This is very important for the
creditor that he or she should make sure that the planned credit agreement is effectively
explained to borrower and also it is the right of the borrower that he can asked any question
regarding the agreed agreements (Macaulay, 2018). It is very important to understand the
different types of credit agreements. Credit agreements are categorized into the following: -
Small Agreements, Intermediate Agreements and Large Agreements
 Small Agreements: - Small agreements are those agreements which are generally below
164GBP. These are daily pay loans and micro loans. Pawn transactions are also
considered as small agreements irrespective of the loan size.
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 Intermediate Agreements: - Intermediate agreements are those agreements which are
generally between 164GBP and 2700GBP. Some of the example of intermediate
agreement are personal loans, credit card vehicle finance etc.
 Large Agreements: - Large agreements are those agreements which are generally above
2700GBP. Some of the examples of large agreements are home loans, car loans, loans for
business etc.
2.2 Rules, termination rights and default notices
According to given case study it has been understood that Ben is facing a major problem
of fraudulent activities and might face various problems regarding termination of rights and so
on. Thus, number of notices is transferred by legal members as well as Ben’s is also consulting
an agent for getting aware about the specific rules and regulations in order to control the
possibilities of mistakes and error. Thus, one of the major obligation of agent is to ; Duty to care
and skills:- It is the duty of an agent that he should perform all his duties with as much as skill
and knowledge which he generally possess. It the responsibilities of an agent that he complete
his task with using his all skills and also he have to take care all the assigned work which was
given him by the principal (Folsom and et. al., 2013). If the agent does not work with reasonable
care, skill and diligence, he or she will be the liable for the losses. He must make compensation
to his principal against the losses which happen due to his neglect, want of skill or misconduct.
But he is not liable for the indirect or remote losses. For example the principal gave the direction
to an agent to the sale of goods and now an agent have the authority to sale the goods and he sell
the good to a person on the credit without enquiring about him whether he will be able to pay the
amount of goods or not but after sometime that person will not able to pay and became insolvent,
the losses which happen it was bear by an agent because it was his fault and he is fully liable
compensate the sale of goods to the principal.
Hence, Ben’s have an authority to terminate credit contract as per consumer protection
act 1974 in order to prevent money from getting misused. Along with this sent various other
default notices on the behalf of court and client.
2.3 Difference between various types of agents
An agent is a person who is authorized to act on the behalf of the client to create legal
relationship with third party. The person for whom such act is done or to who is represented is
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called the principal. Agents was given full power of attorney by the principal to take all the
decision on the behalf of representative whether there was any modification done in the contract
or any termination of contractual obligations between the other person and third person or any
business negotiation between the parties. There are various types of agents which are general
agent, special agent, agency coupled with an interest, subagent and servant agent. Now we are
going to understand in detail about these agents (Nichols, 2012).
1. General Agent: - General agent are those agent who holds a lot of authority and also
have broad range of transaction in the name of or on the behalf of his principal. The
general agent may be manager of business who has huge range of power. For example as
a purchasing agent or life insurance agent who authorized to sign up customers for home
the office.
2. Special Agent: - Special agent are those agent who holds a limited powers as they
assigned to do some specific work only and nothing more. For example, a real estate
broker is usually special agent.
3. Agency coupled with an interest:- In this agency the agent’s compensation depends on
the continuity of his association or authority to act as an agent.
4. Sub Agent: - Sub agent are those agents which are appointed by the main agent to
perform the legal formalities in place of main agents. These are agents are not directly
authorized by the principal but they are hired by main agent to plays the role of agent in
front of third party. The principal is not responsible for any acts of sub-agent neither sub-
agent is liable to the principal. The agent is the principal of the sub-agent both to the
principal and third party. The sub-agent is only liable to the main agent who appointed
him to take care of the legal formalities of the contract.
5. Servant Agent: - Servant agent are those agents who are appointed by the master to
perform certain acts which are controlled by the master.
2.4 Rights and duties of an agent
An agent who is appointed by the principal to perform legal formalities of the contract
has some right and duties which he has to play as an agent. We are now going too discussed
about some rights and duties of an agent towards the principal. First off all we will discussed
about duties of an agent and later on rights of an agent (Posner, 2014).
Duties of an Agent: - There are few duties of an agent towards the principal which are follows
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1. Duty to follow principal direction or instructions: - The first duty of an every agent to
act within the scope of their authority which was given to him and perform the agency
work which was provided to him according to the direction given by the principal. When
the agents perform his task according to rules and regulation which was set by the
principal which would lead beneficial to the agent or otherwise if an agent was not able to
follow the direction of principal he or she will be responsible for any loses happen. For
example when the principal instructed the agent to warehouse the goods at a particular
place but the agent warehoused them at some different places which was equally safe as
compared to instructed warehouse but if the goods were destroyed by the fire without
negligence, it was clearly consider as the fault of the agent and he is liable for the loss
because he does not follow the instruction of the principal which was given to him.
2. Duty to render accounts:- It is duty of an agent that he should maintain the account
properly and render them to the principal when he demanded for that. Agent must keep
accurate records and account for all the transaction which was done and properly disclose
to the principal and also let him know about the situation of the business (Bhatia, 2014).
3. Duty to communicate :- This is very important duty for an agent that he should give all
the information which is related to the business to the principal. An agent should ask the
instruction form the principal and obey that and he does not have to hide any secrets from
the principal. In case of any complicated situation an agent must consult to the principal
and take his advice regarding that complication and should solve them along with help of
the principal.
4. Duty of performance with honesty:-.
5. Separate Accounts: - An agent should not mix his account to the principal accounts. He
should always to keep both the account separately. An agent should maintain proper
accounting records of the principal and also informed him about the same on regular
bases. And also an agent should not make secret profit by utilization of reputation of the
principal.
6. Principal death case: - If the principal dies or became insane or insolvency of principal,
it is the duty of an agent that he should protect or save the good as he was doing in the
present of principal. Now an agent will protect the interest of the legal heirs.
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7. Duty of repair and despair:- This is also one of the responsibility of an agent that if the
principal has provided him to manage the property, he or should take of that property.
Any damage to the property, it is an agent liability to get necessary repair done to the
property and that property would take care in proper manner so that in future there would
not any harm to that property.
Rights of Agents: - As above we discussed some of the duties of an agent now we are going to
discussed about the right of an agents which are as follows:-
1. Rights of Retainer: - An agent has full right to deduct the amount which is due to him
by the principal, from amount which is payable to principal. For example if an agent
handle the account of principal and he is liable to pay some of the amount to an agent
and he is not doing that ,it is the right of an agent that he would deduct his share of
amount from the account which he was handling of the principal (Frank and Bix, 2017).
2. Rights to claim remuneration:- As per the terms of agency contract , agent has rights
to claim remuneration in the form of wages or salary or commission.
3. Rights of indemnity: - This is also important rights of an agent that the principal of
indemnity get operated between agent and principal where principal is implied
indemnifier and agent is implied indemnity holder. According to this right an agent can
make principal answerable for all types of sufferings.
4. Rights of lien: - According to this right an agent can use this rights of lien where he can
retain the principal good’s till the time his debt was not paid by the principal.
5. Right of compensation: - It is the right of an agent that if an injury happen or occur due
to negligence by the principal, he should liable to compensate the agent.
6. Third parties: - If there is any dispute between third party and the agent who enters into
the contract on the behalf of principal then the agent can came out of the contact any
time and the principal and the third party can sue each other and they will directly solve
their dispute and will came out on a certain point with a decision.
TASK 3
3.1 Monopolies and anti-competitive practice legislation in UK
In UK regulation of competition is new policy. The common law doctrine was the only
way to keep a check over anticompetitive practices till the Monopolies and Trade practices Act
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1948 came into force. The application of this doctrine was limited and the Statutory intercession
was only acceptable for the foundation of an investigatory system.
The outline is basically comprise on the analysis of European Community competition law
and UK Competition law. The EC is consists of price fixing, market sharing and restraint in
production (Crehan v Innterpreneur Pub Company and Brewman Group Ltd, 2003). The EC has
power to manage the mergers with a community dimension under an EC Merger Control
Regulation, 1990. The Competition Act 1998 brings out two prohibitions which was based on the
prohibitions conducting at European level under Article 81 and 82.
3.2 Role of competition commission within context of monopolies and anti-competitive practices
The CA 1998 is comprise of two main functions that is performed by them, that is, hearing
of appeals for the decisions made by the OFT in the conduction of prohibition and investigation
of specific markets to know the interest of the public and reporting for action to the Secretary of
State but it cannot initiate its own inquiries.
3.3 Dominant position within EU common market
According to the article 102, “Any abuse by one or more undertakings of a dominant
position within the common market or in a substantial part of it shall be prohibited as
incompatible with the common market insofar as it may affect trade between Member States”.
Chapter II prohibition, article 82 prohibits the abuse by an undertaking of a dominant
position in the UK.
3.4 Applications of EU exemptions
There are three types of exemptions, Individual, block and parallel exemptions. The parties
of an individual agreement gives an application to the OFT for the exemption. In the block
exemptions, agreement which is of same nature as for individual exemption, this exemption is
applied automatically to it. The parallel exemptions are applied when the agreement comes in the
ambit of EC individuals or block exemptions under article 81(3) of the EC Treaty or by an effect
on trade between member states of the EU.
TASK 4
4.1 Different forms of intellectual property
Intellectual property refers to the creation of someone’s ideas, innovation, artistic works,
design, symbols etc that can be protect by the law from being copied from someone else. There
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are different forms of intellectual property are patents, designs, trademarks and copyrights. It is
the duty of creators that he/she should perform their business activities with proper honesty (Eren
and et. al., 2012). In the case of any misconducts and business dishonestly then innovators is
entitled to receive the rewards of his services. An agent has also the duty to be loyal to his
principal and does not bring his interest or the interest of the third party in the way of principal’s
interest. Along with this need to protect intellectual properties by taking appropriate steps. Some
of them are going too discussed in details about these intellectual properties are as follows:-
Patents:- According to this element creators acquired profit by introducing advanced and
innovative things as well as totally new from its competitors. As per legal bodies all the
necessary criteria must be fulfilled in effective manner in order to acquired prevention for 20
years by United kingdom intellectual property office.
Trademarks:- It is a sign of which make the company product or services distinguish
from other rivalries which is identified in various forms such as; logos, words, tagline hence
forth.
Copyrights :- It prevent literary works from getting misused such as; manual, songs,
musical works and so on.
4.2Principles relating to protection of inventions through patent rights
Legal bodies are playing a very eminent role in preventing inventions from getting
misused by other rivalries and any hackers. Basically, it has been assessed that number of rights
are determined through which innovators can protect their invention and patent rights from other
members. Some of the major benefits or legal rights which is given by innovators are described
as follows:-
Authority to sell invention and whole intellectual rights.
Give licence to someone else but having right to retain the IP rights.
Public can also have right to gain benefits through this process.
4.3 Principles relating to protection of copyright
Copyrights are literary works which protects the theoretical data of individuals from
damaged as well as shows the name of author (Foss and Knudsen, 2013). Some of the major
principles regarding prevention of copyright are –
Right to copy the entire work, authority to distribute the task, broadcast also and so on.
However, this authority exist till the life of author which is a writer of a book. Therefore, if there
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is cheating of work without acquiring permission from copyright owner then it is known as a
infringement of copyright. Hence, some of the remedies of these are; injunctions , take legal
action by consulting an appropriate member of legitimate body (Bishara, 2011).
4.4 Compare the protection of trademarks and business names
There is a major difference between prevention of trademarks and business names which
is described as follows:-
Business name Trademark
 It is not a distinctive or distinguish .
 It is consider as a descriptive term.
 Initially Registered as a trademark
 Already registered as a name of an
organization.
 Somehow it may seen as a illegal in
nature.
 Highlight the relationship between
governing bodies
CONCLUSION
From the above report it has been summarized that business laws are all about various
major norms, beliefs, rules and regulations which is follow by corporate world to run an
organization in a smooth manner. Their main objective is to protect individuals from getting
exploited as well as create a positive relations in between buyer or seller. Along with this,
various suitable acts are used by companies to prevent them from fraudulent and wrongful
conducts in order to generate maximum benefits by fulfilling the need or demand of various
domestic and foreign customers. Hence, it has been understood that number of laws are designed
for protecting private properties of business enterprises as well as reduce the probabilities of
losses.
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REFERENCES
Books and Journals
Mann, R.A. and Roberts, B.S., 2011. Smith and Roberson’s business law. Cengage Learning.
DAILY, J.E., KIEFF, F.S. and WILMARTH JR, A.E., 2014. Introduction. In Perspectives on
Financing Innovation (pp. 13-16). Routledge.
Folsom, R.H and et. al., 2012. International business transactions: a problem-oriented
coursebook. ThomsonReuters.
Macaulay, S., 2018. Non-contractual relations in business: A preliminary study. In The Law and
Society Canon (pp. 155-167). Routledge.
Folsom, R.H and et. al., 2013. Principles of international business transactions. West Academic.
Nichols, P.M., 2012. The business case for complying with bribery laws. American Business
Law Journal, 49(2), pp.325-368.
Posner, R.A., 2014. Economic analysis of law. Wolters Kluwer Law & Business.
Bhatia, V.K., 2014. Analysing genre: Language use in professional settings. Routledge.
Frank, J. and Bix, B.H., 2017. Law and the modern mind. Routledge.
Eren, S.S and et. al., 2012. Caching message fragments during real-time messaging
conversations. U.S. Patent 8,255,473.
Foss, N.J. and Knudsen, C. eds., 2013. Towards a competence theory of the firm (Vol. 2).
Routledge.
Bishara, N.D., 2011. Governance and corruption constraints in the Middle East: Overcoming the
business ethics glass ceiling. American Business Law Journal, 48(2), pp.227-283.
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