Sources of Business Laws and Their Impact

The report provides a comprehensive overview of business laws, including their sources, regulation of anticompetitive practices, and unfair trade practices. It also discusses partnership liabilities and offers solutions to problems related to dispute resolution using Alternative Dispute Resolution (ADR) methods.

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Various Sources of Laws.......................................................................................................1
P2 Role of Government...............................................................................................................2
M1...............................................................................................................................................3
D1................................................................................................................................................3
TASK 2............................................................................................................................................3
P3 Impact of contract and employment laws on the company....................................................3
M2...............................................................................................................................................5
TASK 3............................................................................................................................................5
P4 Solution to the given case study.............................................................................................5
P5 Justification of Solution.........................................................................................................6
M3...............................................................................................................................................6
TASK 4............................................................................................................................................6
P6 Alternative Dispute Resolution..............................................................................................6
M4...............................................................................................................................................7
D2................................................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES ...............................................................................................................................9

INTRODUCTION
Business laws are comprehensive form of various statutes which helps in the functioning
of trade and commerce in a market. Every country has their own regulations which has to be
entertained by organisation complying business in their region. These laws are generally
occupied by laws related to contract, company, sale of goods, employment, etc. A company has
to obey these laws in order to stay away from unnecessary contingencies. This paper deals with
analysis of various sources of laws in United Kingdom, also it reflects how statutes are framed
by the legislation. In the first section of brief advice related to expansion of company has been
asked and in the second one, winding up of companies and termination of employment has been
discussed. Moreover, methods related to resolution of dispute has also been analysed in this
report with relevant cases.
TASK 1
P1 Various Sources of Laws
Before discussing about the laws which has to be followed by an organisation, first of all
one should look upon various sources of laws. Laws are such obligations which is enforced by
the governing bodies of state. Usually, there are two types of sources primary and secondary.
Constitution, customs, international conventions, treaties, international agreements, etc. are
considered as primary sources of law. The courts judgement and precedents are secondary ones.
Both the sources has their significance, if primary source becomes incapable of assisting in
formation of laws secondary sources are used at that place. Moreover, secondary sources
sometimes end up in the formation of new laws from certain incident or case. (Bagley, C.E.,
2010)
In the United Kingdom, primary source of law is generated from European laws. The
legislature is responsible for it enforcement. European Laws are applicable in European Union, a
group of 28 members of state. Laws in these states are regulated by European Commission,
which was found under Communities Act 1972. It is a cluster of European Ministers, Councils,
Cabinet and many more legal entities. It acts as an implementing body of the Union. EC has been
described as executive of the state. European laws are formulated through various treaties,
directives and regulations. The courts are secondary source of law. Decision of cases are treated
as base of the formation of new laws.
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Business laws are generally created by treaties. As treaties are the oldest source which is
signified as a legal document. Trade and business has been a great part of ancient history so it
they are used in creation of new laws. Treaties are those terms and conditions between two
countries to perform trade or any other legal obligation. It has played an important role in
creating new laws. Moreover, international conventions also provide guideline in framing new
statutes. The statutes related to business laws are result of these sources.
In order to start or expand an organisation it is essential to follow various steps
mentioned under company laws but before that it is evident to know in which sector company is
going to perform their business. There exists two types of sectors, private and public. A private
sector is comprised of organisation regulate bi individuals unlike in public sector, it is done by
the regional state government. Apart from that to incorporate an organisation it becomes certain
to know what type of liability is performed by the company. For that there are two types of
liability in a partnership, limited and unlimited. A limited liability is such in which partners are
responsible for the acts done by them also debts and profits are distributed among them as per
the capital or investment they share. In an unlimited company liability to perform duties are
vested in the owner of the company, which means debts and profits are not shared.(Bodie, Z.,
Kane, A. and Marcus, A.J., 2014)
There are some rules which has to be followed by an organisation to incorporate
themselves under Companies Act 2006. A company must be registered by the Registrar of
Companies. In order to register the members of an organisation has to form and submit a
Memorandum of Association and Article of Association. A MoA is comprised of detailed
information about capital of company and its shareholder, where as AoA contains, constitution
of a company according to which its members has to perform their duties. Moreover it is consist
of the appointment of Directors and their responsibilities.
These are the laws which has to followed by an organisation to work as a limited
company. This is how business laws are necessary in conducting trade and business in a market.
P2 Role of Government
Governing bodies are comprise of the legislature, executive and the courts. The
parliament or legislature job is to frame laws and executive implement those laws. The courts are
responsible for protecting those laws. These legal organisation conclusively regulates law
making in any country. In United Kingdom, the laws are governed by parliament whose head is
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the Queen, without her consent no law can be passed.(Crane, A and Matten, D., 2016)(DiMatteo,
L.A., 2010)
Laws are made by proposing bill in the Houses. A bill is of three kinds, private, public
and hybrid. Bill in which interest of public are influenced known as public bill where as in
private one it affects the interest of an individual person. A hybrid bill is complex of private and
public in which public bill is passed to affect the interest of individual. The bills are proposed for
making laws. It is done through a process.
A bill is introduced first in House of Commons and then in House of Lords. In its First
Reading bill is heard and scrutinised by the members and then debate or discussion takes place in
its Second Reading. At Committee Stage, facts related to bill are discussed and a report is made
in its Report Stage. After passing through these stages it is then presented again in the Houses for
any amendment. A bill becomes an 'Act of Parliament' after getting the Royal Assent by the
Queen.
This is the process administered by government in making laws in UK. These laws are
binding upon the citizens. Similarly, laws related to business are passed by the legislature and
implemented by the executive body that is European Commission.
M1
The present legal system is reformatory structure of ancient administration. It is generally
comprise of methods used to solve issues under Roman Empire. Treaties were the most
important documents that were used to for laws moreover, customs are the major sources of laws
which is still been used in the formation laws.
D1
Laws are formed from outdated sources. It is necessary to update the sources of law. As
there are certain laws which cannot be created by ancient sources so new sources should also be
added in the existing one. For instance, sources related to formation of Information Technology
Act.
TASK 2
P3 Impact of contract and employment laws on the company
A business is conducted by forming contract between two parties. Contracts are the legal
documents which is comprise of promises that has been made by the parties to perform their
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duties and in what manner it has to be performed by them. A contract is an agreement made
between the parties which can be enforced by the courts. In United Kingdom, it is conducted by
English Law of Contract. It is comprise of certain essential elements, without such a contract in
invalid. An offer, acceptance and a consideration are essential part of a valid contract. In a
contract an offer is made by a party, it can be for public or to a specific party (Carlil v Coke Co.).
For every there must exist an acceptance, which should be without unnecessary force or
inducement. Apart from it there must be an intention to from a contract and such intention should
not be prohibited by law. A contract is incomplete without consideration. It can be in the form of
money. Usually it is said that a contract is promise which has been brought for a certain amount
of money.(Foss, N.J and Knudsen, C. eds., 2013)
The Employment laws are essential part of business. It is also consist of a contract
between an employee and his employer. An employee enters into a contract of service with his
employer. It is his fiduciary obligation to perform according to the instruction given by his
employer. But an employee is not entitled to follow such instruction which is illegal or against
the laws (Morrish v Hensly). Apart from his duties he has been given some rights under
Employment Rights Act 1996, such as right against discrimination of sex, race, religion, gender
etc. and also against dismal and redundancy. Also there are certain judgements given by courts
which offers an employee similar rights given in this statute. A worker defined in section 230 (3)
of Act 1996, is eligible for minimum wage and sick leaves which has also been supported by the
decision made in case of Uber Taxi (Aslam v Uber BV).
Employment and Contract laws effects a company on certain level. It is mandatory for an
organisation to abide by these laws otherwise it could be a headache to resolve dispute between
the parties. Every organisation appoints new employees so it should be according to the rights
given in various statutes. Moreover, in performing business it is necessary to form a valid
contract and not following the conditions mentioned in the document gives rise to breach of
agreement and disputes. In this way these laws affects a business.
Jane, Penny and Marie wants to expand their business then they have to comply with
these laws. New employees that are appointed by them shall be done by this process and they are
entitled for minimum wage and sick leaves. Also they have to incorporate themselves under
Companies Act 2006 by the registrar.
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M2
The employment and contract laws are very important in performing a business. An
organisation has to comply with the statutes of business administration otherwise they can fall
into jeopardy. Moreover, it provides a guideline to organisations in order to perform their work
but sometimes it creates a problem as the laws are in abundance and they are complicate to
understand.
TASK 3
P4 Solution to the given case study
The termination of employment contract is done in several conditions such as on the
winding up of company and terms breached by the employee of contract, also on the completion
of duty as per the agreement. A creditor can wind up a company on the incapability to pay debts.
They can voluntary liquidate a company. According to the given case study Champion Ltd can
be liquidated by its creditors as it is their legal power to do so. It can be done by applying a
petition in the court where a liquidator is appoint to wind up the company.
There are two kinds of creditor, secured and unsecured. Unlike unsecured creditor,a
secured on has lien over the property of company. A creditor which is secured can sold the
property of an organisation and can get his money back, mortgage lenders are considered as
secured creditors. They can easily liquidate a company by selling its property.
A creditor which is unsecured can only get his amount back by getting judgement from
court by suing the company on bankruptcy. In this way the outstanding payments are made. It is
the right of creditors to appoint a liquidator to analyse the amount of debt which has been paid by
the company to a creditor. In a voluntary or compulsory liquidation it is their right to form a
liquidation committee. (Johnson, L., 2013)
In the other case Amber Ltd. V Mr Anderson, there is breach of good faith, fidelity, trust
and confidence by the employee. As per the contract Anderson has to provide a notice of 12
months before resigning from the job. But he is leaving in an year so he is liable for breach of
contract of employment. This issue can be resolve either by going court or by negotiation
between the parties through ADR.
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P5 Justification of Solution
In the cases solutions are evident as given above. As per the creditors rights they can
liquidate a company in bankruptcy. The process of liquidation provides above is true and valid to
be performed by liquidators. On liquidation the secured creditors can have their capital by selling
the property of company where as in case of unsecured they can get order from court regarding
winding up of company.
In the other case the matter of dispute can be solved by negotiation. If this doesn't end up
in an agreement of resolution then they can apply for arbitration. The process of arbitration and
other ADR methods are discussed below and how these methods are executed by the parties are
also mentioned.
M3
There are various positive and negative impact on business by complying with these
solution. As the company on wind up will lose it assets in the market also its authenticity will be
questioned. This case is in the favour of creditors as it is their right to asses the amount loss
through the liquidation process.
In the other case it is certain that on performing ADR company will save a lots of time
and expensive. This happens similarly to Mr. Anderson. The breach of contract is done by him
and comanpy can settle it though various methods mentioned in task 4. But this can only be done
by mutual consent between the parties.
TASK 4
P6 Alternative Dispute Resolution
Dispute is the result of breach of contractual duties. When a party enters into a contract it
becomes their fiduciary duty to comply with the provisions mentioned in it. On refusing to
follow such conditions conflict between the parties arises. There are two ways in which a dispute
can be solved either by filing a case or by the methods of Alternative Dispute Resolution. ADR
is the best option to resolve these issues because it is cheap and time consuming moreover there
is no need of going to the courts.
An ADR is comprise of major three methods, Mediation, Arbitration and Negotiation.
These methods are recognised all over the world, but at some places there is a slight change in
the conducting of these methods. An arbitration involves a third party which helps in solving the
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dispute. The appointed person is known as an arbitrator. In some countries parties appoints their
own arbitrators and they appoints an Umpire whose decision is final on the parties in dispute. An
award is given by him which not appealable in the court unless the process of decision was not
according to natural justice and equity.
In a Mediation, there is an appointment of a third party known as mediator. He can be an
expert in his field. The job of a mediator is to help parties to come up on an agreement.
Similarly, in conciliation a conciliator is appointed but the only difference is he is responsible for
the solution he provides to the parties in dispute.
Negotiation is the best way to resolve a dispute when two parties are performing business
harmoniously. It involves parties and no third person. It also provides privacy to the parties
regarding the disputed matter. MED -ARB – It is the melding of two well establishes process for
conflict resolution into one hybrid process. Meditation and Arbitration both are used in
conjunction with one another and conclusively known as Med-arb.
In the given case study Mr Anderson has resigned from his post of CFO without a proper
12 months notice. Now Amber Ltd. wants and injunction. The matter of dispute can be resolve
by negotiation first. If this does not help they can appoint a mediator. If mediation does not
provide any solution then they can go for arbitration. In this way they can resolve their matter of
dispute.
M4
Negotiation is the best way where two parties are involve in a peaceful venture as it will
keep secrecy of the matter. Mediation is bit legal method and no privacy is there in this process
as it involves a third party similarly with arbitration. But in an arbitration parties are completely
bound to comply with the decision of the council and no further dispute or appeal can be made in
this method.
D2
Arbitration is a better option in resolution of dispute between the parties as it involve non
breach able agreement between the partiers in the presence of witnesses and this is comprise of
an award which is not appealable until in some circumstances.
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CONCLUSION
It is evident to abide by the laws of business in order to conduct trade and commerce in a
state. These laws are conclusively known as business laws, which help in regulating business in a
market. These laws are made to restrict anticompetitive practices and unfair trade practices. This
report dealt with various sources of laws in making of statues and also how government is
involved in making such laws. It is a brief overview of how business laws affect in the formation
or expansion of a company. It also describes in which sector business can be performed also
certain partnerships liabilities are also mentioned. It also provides solution to the problems as
given in brief with proper justification. Moreover, laws related to resolution of dispute are also
contained in this report, emphasising more on methods mentioned in an ADR process. It is a
complete report with references and relevant cases.
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REFERENCES
Books and Journals
Bagley, C.E., 2010. What's Law Got to Do With It?: Integrating Law and Strategy. American
Business Law Journal. 47(4). pp.587-639.
Bodie, Z., Kane, A. and Marcus, A.J., 2014. Investments, 10e. McGraw-Hill Education.
Crane, A and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
DiMatteo, L.A., 2010. Strategic contracting: contract law as a source of competitive advantage.
American Business Law Journal. 47(4). pp.727-794.
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.
Grundfest, J.A., 2010. The SEC's Proposed Proxy Access Rules: Politics, Economics, and the
Law. The Business Lawyer, pp.361-394.
Johnson, L., 2013. Unsettledness Delaware Corporate Law: Business Judgment Rule, Corporate
Purpose. Del. J. Corp. L., 38, p.405.
Kinicki, A and Kreitner, R., 2012. Organizational behavior: Key concepts, skills & best
practices. McGraw-Hill Irwin.Swartz, L.B., Cole, M.T and Shelley, D.J., 2010.
Instructor satisfaction with teaching business law: Online vs. onground. International
Journal of Information and Communication Technology Education (IJICTE). 6(1),
pp.1-16.
Ye, Q and et. al., 2011. The influence of user-generated content on traveler behavior: An
empirical investigation on the effects of e-word-of-mouth to hotel online bookings.
Computers in Human Behavior. 27(2). pp.634-639.
Online
Alternative dispute resolution (ADR). 2017. Available through
<https://www.citizensadvice.org.uk/consumer/alternative-dispute-resolution/settling-
out-of-court/>.
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