Business Law Report: Gateway Telephone System and UK Law

This report examines various aspects of business law within the context of the Gateway Telephone System. It explores the formation of a company, the impact of company, employment, and contract law on a business, and suggests legal solutions for problems related to these areas. The report delves into the UK legal system, including the implications of Brexit and the Consumer Rights Act 2015. It provides advice on issues such as breach of contract, distribution of assets during liquidation, and exclusion clauses. The report also offers justifications for the suggested legal solutions, referencing relevant case law and legal provisions. The analysis includes topics such as employment rights, consumer rights, and contractual obligations, providing a comprehensive overview of business law principles applied to real-world scenarios.

Business law

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Enclosed in PPT..........................................................................................................................1
TASK 2............................................................................................................................................1
P3 Impact of company, employment and contract law on a business.........................................1
TASK 3............................................................................................................................................3
P4 Suggesting different legal solutions for various problems....................................................3
P5 Justification of the legal solution suggested..........................................................................5
TASK 4............................................................................................................................................6
P6 Recommending legal solution based on a different legal framework....................................6
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Every organisation, for its smooth and hurdle free operation needs to comply with various
laws and legislation. It is mandatory for every business to adhere with relevant provisions as a
firm is established by the procedure of law only and it ended with following legal procedure as
well. Hence, it is essential for an entity to follow laws such a company, employments, contract
etc. In the present report, a detail discussion related with various laws and its compliance with
business firm Gateway Telephone System is discussed. The nature of legal system in UK and its
impact on business is presented. For various legal problems related with employments, company
and contract law, separates legal solutions are provided. Along with regulations related with
formation of a company, distribution of assets to creditors, alternative dispute resolution measure
in from of arbitration is presented to the management of Gateway.
TASK 1
Enclosed in PPT
TASK 2
P3 Impact of company, employment and contract law on a business
1.Procedure of formation of a company and potential impact of not following the legal
process:
 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 (Wenger, 2017).
 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 states that all legal and procedural requirements are
duly complied with.
 Naming the company: the name fo the company must not be identical or similar to
already register company. It must mot resemble any national or religious logo, must not
heart sentiments of any community or people or individual.
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In case correct steps are not followed the company might not get registered and in case it
gets registered and after a lag is find out the registration can be canceled with immediate effect.
2. Legal implication of quick Brexit implementation and effect of business with
resignation of Mrs Jubilee from business:
Issue: Whether quick Brexit policy implementation is correct and what are employments rights
available to Mrs. Jubilee.
Gateway can face legal processions as Brexit have not yet been finalized and act of the
organization can be deemed as offensive of the citizens on the European union. The policy of the
Mr. Howells is nor rights as UK is still part of EU, hence an offensive act against the people of
whole EU can not be termed as a righteous action. Mrs Jubilee have following employment
rights as per employment act:
 to receive national minimum wages,
 to be protected against unlawful discrimination and deduction from wages,
 to get paid levers and holiday
The resignation of Mrs Jubilee might have a negative impact on the staff and workers and
management may be compelled to rethink about their Brexit policy application.
3. Legal issues with CAL and consumer rights act, 2015:
Issue: What provisions are applicable, related with quality of the products which operation staff
must know.
Provisions of consumer Rights Act 2015:
Basic rights of consumer available are:
rights to;
 safety,
 be informed,
 Choose,
 be heard,
 satisfaction of basic needs,
 to redress,
 Consumer education,
 a healthy environment.
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The business is legally bound to inform correct information to consumers and provide
them with quality products to ensure theirs safety and health. The operation staff must also abide
by this as this is legit requirement and non fulfillment means breach which can attack legal
implications.
As per the provisions of the consumer rights act, 2015, the organisation Gateway is
responsible to provide its consumer reliable and correct products. In case any breach is done, the
organisation will be held liable (Countouris, 2016). The operational staff of the organisation
must work diligently to complete the orders on time and not to lag in there performance. But they
are doing what management is telling them t do, so not one can blame for the non effective
performance of the Gateway.
4. Advise on the amount demand by the auctioneers:
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 Ojiogo withdrew her bid before the fall of the hammer of the auctioneers, which means the
bid din not completed (Thirlway, 2014). Neither MR Ojiugo or her company is liable to pay
amount of the products to which she was biding as not purchase was made.
5. Legal effect of the clause “any express or implied condition or warranty is hereby
excluded”:
The above term included in the contractual agreement is the exclusion clause, which is
used to eliminate responsibility by CAL. The Court are generally suspicious of this term in the
contract. In case of any breach LAAC can seek the legal remedy from court as the terms are
written in small fonts and more over purchasing manger was unaware of such term. The legal
implication on the business of Gateway can be defined as it will not face any issues of non
compliance or contractual terms as on compliance with the terms is mentioned, more over the
reputation of the firm can be deteriorated as entering such terms is not a good business practice
and this can lead the business of lacking in ethical practice in business.
6. Position of the firm in monthly payments to Mrs Jubilee:
Issue: Whether the decision of MR Hollows of stopping the payment to Mrs Jubilee is legally
correct?
An agreement has been entered by Gateway and Mr Jubliee which and the organisation is
bound to pay the specified amount of 300 euros to Mrs Jubilee. Mr Hollows is legally bound to
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make the payments as the same is legally enforceable. In case, non payment a breach of contract
is constitutes and remedial measures can be sought by her.
TASK 3
P4 Suggesting different legal solutions for various problems
BREACH AND TERMINATION OF CONTRACT:
To constitute breach of the contract the most essential part is non fulfillment of certain
terms and conditions defined and stated in the contractual agreements. The terms can be
expressed or implied in the contract. In the present case the phones supplied by Gateway are in
perfect and usable conditions but do not meet certain specifications (Lievens, 2017). The sales
agreement between parties stated the line that any expressed, implied conditions and warranty is
excluded. Moreover, not meeting certain specification as per the contract is constituted under
breach of the contract.
Nature of the breach is determined as repudiatory as, telephones are a complete product
as lacking a certain specification for example specific color, can results in rejection by consumer
to purchase or by the supplier to not to take the order. This can be stated for the present case that
termination of the contract can not be taken as a remedial step by CAL (How are laws made?
2018). As per the decided case law of C&S Associates Ltd v Enterprise Insurance Company Plc
[2015] th same fact can be established that management of the CAL must have tools about the
missing specification so that timely remedy could have bee taken by Gateway.
Advise: in the present case as per the term of the contract no expressed implied term of
the contract are included in contract, no claim can be made by CAL and it cannot terminate the
contract on basis of the specification defined in the contract. Rather, it can ask the management
of the Gateway to fulfill the specification and reach to an amicable remedy instead of terminating
the contract.
DISTRIBUTION OF ASSETS TO CREDITORS:
All the assets of the organisation Bevis will be distributed in the order of preferential
creditors in case of liquidation of the organisation:
 Expenses and fees of the liquidator: when a companies goes under liquidation, first
payment is made to the liquidators in from of liquidator's fess and expenses incurred by
him to carry out the liquidation process.
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 Payment to secure creditors: secured creditors are those which have fixed charges
against the payment made to Bevis. The creditors in this category are generally banks,
financial institution which provides loans and mortgages to the firms against securities
which are deposited by the organisation against the loan amount.
 Payment to preferential creditors: then comes the employees which owned certain
arrears form the organization under liquidation. The arrears are for wages with maximum
amount of euros 800 and any holiday pays (Vanstraelen and Schelleman, 2017). The
employee with a payment due of amount up to 800 or Euros or less are paid with arrears
amount and for those who have a more amount due are paid 800 euros.
 Payment to unsecured creditors against floating charges: the assets with floating
charges are work in progress, inventories, raw material, furniture and fixtures. These
assets are traded in normal course of business. Those who supplies the material are said
to be the creditors against floating charges. These creditors are entitled for payment from
net property of the firm which is left after deducting all the cost and expenses.
 Payment to unsecured creditors: theses are the creditors which do into have any
securities against their payments and supplies made by them to Bevis. They are next in
the line of receiving payment in liquidation process.
 Connected unsecured creditors: next in the line are those which are closely connected
with the company. They can be defined as immediate family members, spouse of the
directors, employees and other staff members of the Bevis Ltd.
 Shareholders: the shareholder of the firm comes last in this line as they do not have any
securities for receiving the payments made by them in form of money incurred to
purchase the share of the firm.
Statement showing funds realized and amount to be paid By Bevis :
Amount realized by liquidator against premises
of company £250,000.00
Amount owed to SME bank with fixed charges £300,000.00
Amount owned to Gateway £100,000.00
Expenses of liquidator £20,000.00
Interpretation:
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In the given case, court have given an order for liquidation of the Bevis after a petition
has been made buy the creditors of the organisation. The first payment will be made to the
Ngozi, as he is appointed as liquidators and expenses incurred by him in liquidation process
amounted to £20,000. The next in line comes SLM Bank and Gateway as both of them are
secured creditors one having fixed charges and other do not having floating charges. Both of
them will be paid on prorate basis this is because telephones and accessories have already been
supplied to Bevis Ltd.
P5 Justification of the legal solution suggested
JUSTIFICATION ON CLAIMS OF LACC:
Contracts: A contract is a legal agreement between parties who agree to sales certain
goods or services against some amount of consideration which can be in cash or kind. They
must have intention to enter into legal biding effect for the agreement (Bassemir, 2018). A
legally binding contract can be verbal and written, though it is easier to prove and rely on if set
out in writing.
Breach of contracts
The terms of the contract reflects the manner in which the contract is to be performed by
each party. The in the contract mat be expressed or implied. The expressed terms are those which
are clearly stated in the contract, implied are those which are conducted by the law. The
performance of the contract, with falling short of what is written in the terms of contract and has
been agreed upon constitutes breach of the contract. The breach is defined as repudiatory breach
when the conditions which are not fulfilled are the core and significant for performance of
contract. The breach is of Warrant when conditions not fulfilled are non critical for performance
of the contract.
Remedies available for breach of contract:
Termination of the performance: the innocent parties who surfer damages or loss due
to on fulfillment of certain significant terms of the contract, can terminated the contract with
immediate effect provided that the breach of contract must be repudiator.
Claims for the damages: in case of the breach is of warranty the innocent party can
claim the damages suffered by it, for the non fulfillment of hoses terms which were mentioned in
the contractual agreement.
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Remoteness of loss: this can be defined as the remedy that is beneficial for both the
parties to contract. The innocent party in this case ask the lacking party to perform the obligation
due to it in a stipulated time frame. With this no harm and damages is occurred to by party and n
loss and termination of the contract is needed.
Case law
C&S Associates Ltd v Enterprise Insurance Company Plc [2015]
The business handled motor insurance claims for an insurance company client. It failed to
hand over files for audit by the insurance company. The insurance company treated this as a
repudiatory breach and immediately terminated the contract between them.
It was held by Court that it is permissible to believe on a repudiatory breach which had
not been raised at the reasoonable time, and even if the other party was unaware of it, to justify
an immediate termination. There was an exception if matters could have been put right time – ie
steps could have been taken to avoid the breach altogether, or the obligations could have been
performed in good time in some different way - if they had been pointed out at the time of the
termination.
JUSTIFICATION FOR ASSET DISTRIBUTION OF BEVIS LTD:
As per the provision of the Insolvency Act 1986 of the UK, creditors can file a petition
for winding up of the firm when the debts are not paid by the business for a stipulated period of
time. In chapter 4 of the act “creditors voluntary winding up”, the process of the winding has
been defined and after following this the company is dissolved. In the present case creditors have
filed a petition in the court to wind up Bevis Ltd in which one of the creditors is Gateway. The
order of payment to be made to creditors has been defined in the provision of company Act 2006
of UK (Kim and Starozhilova, 2017). Gateway is a secured creditor of the firm as it have a
contractual agreement with Bevis to sales the telephones and accessories to organisation in return
of the payment ofr the units of telephones and accessories sold to Bevis. Hence, Gateway is
liable to receive certain amount of his payment due on the pro rata basis.
TASK 4
P6 Recommending legal solution based on a different legal framework
To, The Employee (whom so ever it may concern)
From: Legal advisory, Gateway
Subject: Validity and application of Arbitration clause in Employment contract.
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Sir/Madam
This letter is written to you for explaining the implication of the arbitration clauses in the
employments agreements, which you have signed at the time of taking employment in Gateway.
Many of the employee from Gateway are filling law suit in support of me too movement. The
following part of this latter presents you with how the issues and problems between employer
and employee will be dealt with for Gateway and its employees.
Legal system in UK:
The legal system in UK can be defined as common and statutory to deal with two
division of laws i.e. civil and criminal law. These both branches of law deals with crimes and
offenses of different nature by going to court (The English Legal System, 2018). There is another
way to solve the dispute without going to court. This is called as alternative dispute resolution
(ADR). Types of ADR are:- arbitration, medication, negotiation and conciliation.
Arbitration and significance in present scenario:
With recent changes in the member structure of EU and announcement of Brexit, the UK
based organizations are more inclining towards arbitration to resolve their business disputes.
Arbitration Act 1996 is applicable in UK which present the legal framework and regulation to
carry out arbitration process (Stay of legal proceedings, 2018). The legal framework of UK
states the fact that when an arbitration clause in entered in employment agreement to refer future
disputes to arbitration, this can not be denied by any parties to agreement and dispute can not be
taken to court. The courts have held that the purpose of the Arbitration Act is to give effect to the
liberty to the parties to agree to have disputes determined by arbitration rather than in court.
Difference between institutional and Ad Hos arbitration:
Basis of difference Institutional arbitration Ad-hoc Arbitration
Authority to carry
arbitration procedure
Third party intervenes the
procedure to carry pout as
arbitration procedure such as
LCIA (London court of
International Arbitration),
ICC(International chamber of
Commerce) etc.
Parties carries out arbitration
procedure on their own, no
other parties intervenes the
procedures.
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Administration All administrative functions
are carried out.
On involvement of
administrating institution.
Agreements Arbitration clause is present in
agreement.
No clause in the agreement. It
is referred to avoid court
proceedings
Implication of judgment The decision passed is final
and creates binding effect on
both parties. Here right of
appeals is lost by parties to
arbitration.
No binding effect, which can
create confusion as, after
taking a final decision either of
the party can refuse to abide by
the same.
Validity of the arbitration agreement signed:
Section 9, Arbitration Act, 1996 defines the provision to put a stay on the legal
proceedings. As per this section a party to arbitration agreement against whom legal proceeding
are brought on a matter which under the arbitration agreement is to be referred to arbitration can
apply to the court to put a stay on the proceeding on such subject matter.
The validity of the arbitration clause in the employment agreement can be established as
it is an institutional arbitration clause which makes it for both the parties to agreement to refer to
arbitration to resolve any dispute arising between employer and employees(Arbitration
procedures and practice in the UK, 2018). The arbitration clause inserted in the agreement
makes it valid that no legal proceeding can be instituted by any parties to employment agreement
related with any subject matter.
Advise:
It being is being informed you that any legal law suit filed against the Gateway can not be
held valid as it is against the employment agreement. The organisation Gateway will fill a
petition in the court to put a stay on the legal proceedings. It is advised to the employee to not
file law suit against the firm in the court as the cases will be referred to arbitration only as per the
arbitration cause in the employment agreement.
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CONCLUSION
From the above report it can be concluded that English legal system in UK gets is law
from various sources such as act of parliament, European union etc. Gateway as an organisation
must comply with company, employment, health and safety and; fire safety acts. The vital role
played by the government in formulation of statutory law has been defined in the report. The
applicability of common laws in the court has been defined as, on discretion of the judges rather
the statutory laws needs to followed and complied compulsorily with meaningful interpretation.
Further it has been articulated that all three laws that is employment, contract and
company laws, have significant impact on gateway and its operations. Legal advise to Gateway
has been presented as there has been a breach of contract and termination of contract by LACC
can be negotiated. A partial payment can be received by Gateway from Bevis Ltd in preferential
order of payment to creditors. For the law suit filed by the employees in support of Me too
movement, it has been articulated that the law suit can not be held valid as there was arbitration
clause in the employment agreement which can be defined as institutional arbitration and hence
employee need to go for arbitration to resolve their disputes.
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