Business Law Report: Analysis of Cloudline Company Issues

This report provides a detailed analysis of the legal challenges faced by the Cloudline company, covering key areas of business law including contract, employment, and company law. The report begins with an introduction to business law and its application, followed by an examination of legal procedures for forming a limited liability company and advising on employment rights, including unfair trade practices and adherence to the Customer Rights Act. The report then suggests legal solutions for specific issues faced by Cloudline, such as breach of contract claims, distribution of assets to creditors during liquidation, and provides justification for the use of appropriate legal solutions based on relevant case laws and legal frameworks. Finally, the report concludes with recommendations for legal advice and a legal letter to employees addressing dispute resolution techniques.

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 2............................................................................................................................................3
P3 Presenting legal opinion and illustrating potential impact of law on Cloudline....................3
TASK 3............................................................................................................................................6
P4 and P5 Suggesting appropriate legal solutions for the issues faced by Cloudline and
Justification for the use of appropriate legal solution.................................................................6
TASK 4............................................................................................................................................8
P6 Recommendation of the legal advice on the basis of different legal framework...................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Business law is a branch of legal rules and laws under the English legal system which
defines the directions to the organisations and firms over conducting the activities and
operations of the business in legal direction. In the present report the sources of law, enactment
of law and its application in justice court is defined which is presented in the form of power
point presentation. Apart from this the company Cloudline is presented with legal solution for
different disputes faced during business operations under employment, contract, company law
with application of status law provisions as well as case laws. Justification for the solutions is
also provided in the report. For the last task of the report a legal letters is presented to the
employees of the business form the legal team over the issues of the employee with management
of Cloudline.
TASK 2
P3 Presenting legal opinion and illustrating potential impact of law on Cloudline
1. Advising Mr Surrrey over the legal requirement and procedures for incorporation
limited liability company and selection of a name.
The following is the procedure of formation of a limited liability company:
 Memorandum of association: Section 8- all the members of the company must
subscribe to the MOA. This includes basic details if the company such as name, address
of registered office etc.
 Articles of association: section 9 (5) (b)- this defines rules and regulation of the
company.
 Statement of capital and initial shareholdings: this defines the share capital and
shareholding of the company.
 Statement of proposed officers: the name of the directors, their address and contact
must be defined here.
 Statement of compliance s 13- this stats that all legal and procedural requirements are
duly complied with.
 Naming the company: the name of the company must not be identical or similar to
already register company (Coulter and Hancké, 2016). It must not resemble any national
or religious logo, must not heart sentiments of any community or people or individual.
The name of the company must be such which do not reflect the flag of any nation.

If the above guidelines are not followed a company can get its registration under the companies
house and upon its incorporation if it overrules any of this requirement its name can be struck
out form the register of companies house.
2. Advising Mr Surrey over legal position about implementation of the policy and
employment rights of Mrs Park:
Unfair trade practices and policies:
The unfair business policies and practices incudes frauds, misrepresentation's and
oppressive act or practices by business and which often against the employees and which are
against the law f the nation (Nyoni and Hart, 2018). Application of any such policy in the
business is not allowed and a business can face serious litigation and legal proceeding if it is
found to be indulged in such practices.
Employment right of Mrs Park includes:
 to get paid national minimum wages of 8.21 pound per hour,
 to receive sick leave, paid holidays, maternity and paternity leaves, expected hours of
work,
 protection against any type of discrimination in the firm,
 to give healthy and safe place to work,
 to not to work more than 48 hours per week.
 Protection against harassment, victimization and unfair treatment.
This can be stated that policy implementation by Mr Surrey is unfair and upon this if he accepts
registration of Mrs Park this will be a discrimination against her of being form other EU nation.
Also, this means that the organisation will get indulge I unfair policy application and
infringement of the employment rights of Mrs Park. For this it is advised to MR Surrey that he
shall not apply such policy in his business as its can have major implication in form of
litigation and legal action against business.
3. Advising the staff of Cloudline over quality of the product.
In accordance with the provision of Costumer Rights act, 2015 the organisation is
required to provide correct and complete information related with the products. This requires
organisation produce goods quality product. The staff of the Cloudline is advised to highlight the
same to the quality team as well other higher authorities of the business in order to perform as
per the provision of the act.

4. Advising the accounts staff of Cloudline on the letter of payment
As per the legal provisions of contract law a product is sold in an auction when the
hammer of the auctioneers falls and there only the bis is said to be finalized. In the present case
Ms Ebuscity withdrew her bid before the fall of the hammer of the auctioneers, hence on
purchase made by her (Petrovic, Hamilton and Nguyen, 2017). Neither Ms Ebuscity or her
company is liable to pay amount of the products to which she was biding as not purchase was
made.
5. Explaining the legal effects of the clause any express or implied
condition or warranty is hereby excluded
Exclusion contract term: As per the provision of this contract act, 1999 the terms
inserted by Cloudline in the contract as any express or implied condition or
warranty is hereby excluded”, which if valid can restrict its liability towards risk. And this
required notice and sign, incorporation of the term in contract to be valid. The major
requirement for an exclusion clause to be valid it must be noticed, signed and incorporated in the
contract. As the contract is signed by the manager of DLE. This means that the terms is a part of
contract and hence, Cloudline can exempt itself form the liability and irks and warranty over the
products.
6. Explaining the position to account officer under law regarding monthly allowance
agreement to Mrs Park:
Contract law: As per the provision of contract law to have valid contract there must be an
agreement between the parties, a consideration and an intention of its legal enforcement. In the
present case it can be seen that Mrs park have n agreement of payment with Mr Surrey and the
payment is condensation, Also the business agreements generally have an intention of creating
legal obligation, so the present agreement there is valid contract. In case of breach contract Mrs
Park have every right to bring a legal action against Surrey in order to recipe monthly payment
agreed under contract.
TASK 3
P4 and P5 Suggesting appropriate legal solutions for the issues faced by Cloudline and
Justification for the use of appropriate legal solution
1. Advices for the claims made by DLE over breach of contract and termination of
contract:

Issue: the goods supplied by Cloudline to DLE are fully functional but do not meet all the
specification mentioned in the contract. Upon this DLE have referred it as breach of contract and
want to terminate the contract. Here the issue is that, whether action of DLE is legal and how
this dispute can be resolved.
Rule: Contract (Applicable law) Act, 1999:
Discharge by breach:
As per the provisions of the contract act, performance of the contract is done completely
when the both the parties fulfils all the agreed terms of the contract fully as per specification
where one party performs the contract another makes the payment and a contract comes to end
(Ropeand and Campbell, 2015). A contract is discharged by breach where the there is existence
of breach to the condition of the contract and it enables the innocent part a right to repudiate the
contract and can claim damages.
Case law: In the case of White & Carter (Councils) Ltd v McGregor [1961] UKHL 5
House of Lords the duty to mitigate loss was ignored and the claim of the damages were
accepted here the claimed was to get the compensation for there year advertisement where
contract was entered by the manager of the defendant who was not authorised to enter into
contract by the defendant.
Apart from this a contract can be continues by specific performance or meeting all the
requirement of the contract specifically and then it can be is charged by performances.
Application and conclusion:
From the application of above rule and case law it can be seen that Cloudline have not meet all
the specification in the phone which is required to meet as per the contract term. So the action of
DLE can not be question and it has all right to repudiate the contract and also it can make claims
for the damages as compensation over Cloudline as per the case law of White and Carter. Also
the DLE ca terminate the contract on the basis of breach of the contract.
Advice:
It is advices to Clodline that not meeting the specification in the phone is a fault on its
part which were required to be met as per the terms of contract, so in order to avoid the situation
of breach of contract and its termination it is suggested to meet the requirement in the phone
mentioned in contract to avoid the compensation claims as per case of White and Carter.

2. Advising Cloudline over distribution of assets to creditors:
Issue: one of the Client of Cloudline Mopeds Ltd is going under compulsory winding up, to
which Cloudline owes £70,000.The liquidator have realised £200000 from asset of Moped,. The
other dues over clients is 200000 to investment banker and 40000 are expenses of liquidator.
Issue here is that can Cloudline make a clime for repayment of its dues?
Rules:
Preferential creditors in Liquidation:
A preferential creditors is the one who is pre freed by law and when a company goes
under liquidation the payments are made in order of preferential creditors to pay of the dues of
company (Discharge by Breach, 2019). The creditors are paid in a hierarchical order as per the
provision of Insolvency act, 1986. The order of payment is:
 Secured creditors who hold a fixed charge over the assets and property of the company,
 The preference shareholders of organization,
 secured creditors with floating charges,
 unsecured creditors, and;
 Equity shareholder.
The payment is made to creditors in the above method order in a proportion of their dues to the
company and in the ranking of preferential creditors.
Application and Conclusion:
From the application of above rules in the give case it can be stated that Cloudline is
creditor of the company Moped with floating charges and hence it is eligible to get partial
payment for its dues from the client company. Hence it is concluded that Coludline can not
recover the whole amount of 70000 rather it can get a portion of it in the order of the proportion
set by the liquidator of the client company.
Advise: The suggestion is given to Cloud line is to make a claim in the liquidation claims as it is
eligible to get is payment in proportion not in full. But in order to get a part payment, it is
required to make a claim to the liquidator over its payment.
TASK 4
P6 Recommendation of the legal advice on the basis of different legal framework
Legal Letter

To whom so ever it may concern
Greetings,
This letter is written by the legal team of the Cloudline company and it is referred to the
employees working in the organization and the disputes arising between the management and
employees of the company. This letter clearly defines the employees over the legal frame work
and the dispute resolving techniques as per the employment contract of the company which is
signed by every employee while taking employment in the organization.
Firstly you are represented with the difference between legal system of UK and Scotland where
Scotland have its distinct judicial system and own jurisdiction which is not governed by a
single common law ( White & Carter (Councils) Ltd v McGregor [1961] UKHL 5 House of
Lords, 2019). The Law system under Scotland is mixed one which influences the traditions of
continental law. The court structure is Scotland is different form that of UK where it have court
of session, judiciary and Sheriff courts. Whereas in the England the court system comprises
judges who are responsible to pass decisions on the base of legal precedents. The main power is
vested to supreme court whose decision is final and binding. The civil and criminal cases in
England are heard in higher courts rather in Scotland both cases are heard in Sheriff court.
Now you will be explained the importance and validity of the arbitration clause in employment
agreement which have been signed by you at the time of confirming the employment. Asp er
the provisions of the contract act, 1999 an arbitration clause if present under the employment
contract to refer a future dispute to arbitration than the neither of the parties can deny the fact to
go to arbitration to resolve the dispute. The parties do not have right to file a law suit under the
court and can not go for litigation.
Here you are presented with difference between institutional and Ad hoc arbitration. Under the
intuitionist arbitration is the one which is specialized institute intervenes where parties to
contract designate an institution as the arbitration administration. In London there are different
arbitration institution which includes Dubai Internation Finance Centre, (DIFC) International
chamber of Commerce (ICC) and Dubai International Arbitration Centre (DIAC). The Ad Hoc
arbitration is not administrated by institution and where the parties are required to decide upon
all the aspects of arbitration (Who gets paid first when a company goes into liquidation, 2019).
The parties are free to decide the number of arbitrator, manner of their appointment and the
process of arbitration.

With this it is made clear to you that in your employment contract there is an arbitration clause
which means that filing a case against the company is not a legal solution rather the dispute
must be referred to arbitration. Also, as per the terms of arbitration clause and depending on the
type of arbitration (Ad- Hoc or Institutional) the business problems with you will be solved
very soon.
The Legal team
Cloudline
CONCLUSION
From the above report it can be concluded that the sources of law are act of parliament,
EU law and case laws. The law are enacted through the parliamentary procedures with getting
approval from Queen after getting assent from both houses of parliament. The legal opinion
have been provided to Cloudline over the issues with incorporation and its name, over
application of the polices, quality of the products and other matters. Moreover the legal position
of Cloudline regarding receiving payment form its insolvent creditor as it is eligible to get partial
payments. Under the contract law Cluodline is found under breach of the contract it is legally
liable to compensate its client. For the last section legal letter is presented to the employee where
they been provided with information over legal system of UK and Scotland. Furthermore, the
employees have been stated that as per the employment contract they are bound to refer the
dispute to arbitration rather than going to court to solve the dispute with management of
Cloudiline.

REFERENCES
Books and journals
Coulter, S. and Hancké, B., 2016. A bonfire of the regulations, or business as usual? The UK
labour market and the political economy of Brexit. The Political Quarterly, 87(2), pp.148-
156.
Nyoni, E. and Hart, T., 2018. The Concept of Limited Liability and the Plight of Creditors
within Corporate Governance and Company Law: A UK Perspective. InterEU law east:
journal for the international and european law, economics and market integrations, 5(2),
pp.309-322.
Petrovic, J., Hamilton, B. and Nguyen, C., 2017. The Exclusion of the Validity of the Contract
from the CISG: Does it still Matter?. Journal of Business Law, (2), p.101.
Roper, V. and Campbell, E., 2015. Creativity and Commerce: The rise of the experiential
business law clinic in the UK.
Online
Discharge by Breach. 2019. [Online]. Available through: <
http://e-lawresources.co.uk/Discharge-by-breach.php>.
White & Carter (Councils) Ltd v McGregor [1961] UKHL 5 House of Lords. 2019. [Online].
Available through: <http://www.e-lawresources.co.uk/cases/White--and--Carter-v-
McGregor.php>.
Who gets paid first when a company goes into liquidation. 2019. [Online]. Available through:
<https://www.begbies-traynorgroup.com/articles/insolvency/who-gets-paid-first-when-a-
company-goes-into-liquidation>.