Business Law: Understanding Legal Systems and Their Impact on Organizations

This report delves into the fundamental nature of the legal system, exploring its various sources and the laws that organizations must adhere to. It examines the role of government in lawmaking and the application of statutory and common law in justice courts. The report further analyzes the effectiveness of the legal system in light of recent reforms and developments, using specific examples to illustrate the potential impact of company, employment, and contract law on businesses. It differentiates and analyzes the potential impacts of regulations, legislation, and standards on organizations. The report concludes by suggesting appropriate legal solutions for business problems, including termination of contracts, rescue from insolvency, and liquidation, and compares and contrasts the effectiveness of these solutions with alternative legal advice.

Business Law

Table of Contents
Business Law............................................................................................................................1
Introduction................................................................................................................................2
Task 1 - Explain the basic nature of the legal system................................................................2
P1: Explain different sources of law and laws that organizations must comply with...........2
P2: Explain the role of government in lawmaking and how statutory and common law is
applied in the justice courts....................................................................................................4
M1: Evaluate the effectiveness of the legal system in terms of recent reforms and
developments..........................................................................................................................5
P3: Using specific examples illustrate how company, employment and contract law has a
potential impact upon business in your organisation.............................................................6
M2: Differentiate and analyse the potential impacts of regulations, legislation and
standards on your organization..............................................................................................6
LO1 &LO2.................................................................................................................................8
D1: Provide a coherent and critical evaluation of the legal system and law, with evidence
drawn from a range of different relevant examples to support judgments............................8
Task 3 - Suggest appropriate legal solutions to business problems...........................................9
P4: Suggest appropriate legal solutions for a range of business problems e.g. termination of
contract, rescue from insolvency and liquidation using your organisation as an example....9
P5: Provide justifications for the use of appropriate legal solutions in your organisation.. 10
M3: Assess the positive and negative impacts of legal solutions to business problems
mentioned in.............................................................................................................................12
Task 4 - Recommend appropriate legal solutions based upon alternative legal advice provided
..................................................................................................................................................13
P6: Recommend legal solutions based upon a different country’s legal system and/or a
different legal framework.....................................................................................................13
M4: Compare and contrast the effectiveness of these recommendations............................14
LO3 & 4...................................................................................................................................15

D2: Critically review and evaluate the use of appropriate legal solutions in comparison
with alternative legal advice.................................................................................................15
Conclusion................................................................................................................................16
Reference List:.........................................................................................................................17

Introduction
Business law is an important part of a company. Without the compliance of such laws, a
company will be a mere structure of bricks and stones. In this report, the basic nature of legal
system and the effectiveness of legal system in business organisation have been discussed.
The report also laid emphasis on the legal system of a different jurisdiction and what portion
of the law shall a business organisation comply with.

Task 1 - Explain the basic nature of the legal system
P1: Explain different sources of law and laws that organizations must comply with.
The different origins of law are known as sources of law. The codified law of English legal
system has been obtained from diverse foundations. The major sources of the present laws of
the United Kingdom are mainly: legislation, jurisprudence and Europe Union laws.
Legislation: The law making body of the nation is known as the legislature. Legislation or the
legislative law is the law that is created by the legislature of the country. The Acts of the
Parliament fall under the constructions of the legislation.
Jurisdiction: It can be defined as the very essence or philosophy of law. Jurisdiction is the
theory of law, as formulated by the respected jurists of the United Nation. The expert and
professional opinion of the eminent jurists of the nation can be known as juristic law. It
includes the precedents, judgements, orders and decrees passed by the Judges and Justices of
the higher court in United Kingdom.
Laws formulated by the Europe Union: It is also considered as an eminent source of laws set
by the United Kingdom. As it falls under the European nations, it is bound to abide by the
laws formulated by the Europe Union. Since, Britain has opted out of Europe; it no more
needs to abide by the EU laws. The formation of Brexit has brought in its different set of law
which Britain shall follow. Even though, it is no more implied on Britain, Scotland and
Northern Europe must go on following the laws of Europe Union.
The other important sources of UK laws are:
Custom law: In general sense it is the implication of common sense of justice and fairness
used by the set of people professing justice since centuries. The traditions which now have
taken the form of a mandatory regulation are examples of customs which were practised since
hundreds of years or custom law.
Common law: The notes that the judges make after a trial comes to an end are known as
common law. It is also known as the case laws as it includes the interpretation of existing
cases in reference to the ongoing matter in the trial by the judges.
International conventions and treaties: The laws constructed by the United Nations must be
followed by all member nations of the organisation including United Kingdom. Similarly, it

is bound to follow the international conventions and treaties recognised by the United Nation
and entered by the country. The nation’s law concerning its individual governing must
comply with the regulation of such treaties and conventions for example the Pars Convention,
NATO, GATT, etc. This also includes the judgements made by the International Court of
Justice.
The organisation Pinewood Studios must comply with all the laws that the nation abides it to
follow.
The organisation in all respect must follow the constitution of the United Kingdom. It must
on the very first place, register itself as a valid company and follow all the rules and
regulations of the company law and the present government policies. Valid formation and
running of a company largely depends on the configuration of two chief documents: the
Memorandum of Association and the Article of Association. These documents regulate the
working of the company and throws light on its basic foundation.
The Memorandum of Association of a company must contain everything that an initial
subscriber would want to know about. It is also known as the constitution of the company. It
contains the name clause, address of the company, object of the company and its authorised
validation.
The Article of association dictates the meetings which must be held by the company and all
members in specified time gap. The classifications of such meetings, time intervals and
members present are mentioned in details on the document of Article of Association.
As the organisation here is a studio that endures the production of small screen and large
screen entertainment, it must comply with the laws of Intellectual Property. It refers to the
property created by human mind which holds a certain amount of monetary value. It is
category of property, which is intangible in nature. It includes artistic properties, invention
and discoveries, and other intangible properties. The law of Intellectual Property deals with
such aspects of elusive possessions. It refers to the creation of mind which has both moral
and commercial values (European Space Agency, 2018). Pinewood Studio must essentially
comply with the laws of Intellectual Property regarding copyright and trademark.

P2: Explain the role of government in lawmaking and how statutory and common law is
applied in the justice courts.
The government plays a very important role in the process of law making. The ruling
government is elected every five years. The winning party then forms a government in force.
It appoints ministers and other delegates in the parliament. Irrespective of which country the
parliament belongs to, it performs three chief functions: represent the interest of the people,
pass the proposed law and orders, and monitor the action of the ruling government. The
appointed officers of the parliament then form a legislative body for the country. It is known
as the legislation. The legislation is the law making body of the state. To make a codified law,
the legislation drafts a bill and sends it to both the houses of the parliament. The parliament
of UK consists of two houses, namely: The House of Commons and The House of Lords
(Barnett et al., 2017). The bill passed by the legislation has to be signed and sanction by both
the house of the parliament. After a bill is passed by both the houses of the parliament, it
becomes a codified law of the United Kingdom. The Acts of law are as well passed by the
legislative body of the nation in recognition with both the houses of the parliament.
Statutory laws are the laws passed by both the houses of the parliament. It is also known as
legislative law (Zander et al., 2015). It is the bill formed by legislation of United Kingdom to
implement it as a codified set of law. Various agencies, practicing the law and justice such as
courts and tribunals can pass a statutory law. The laws passed by the state and federal
government are also known as statutory law. Examples of statutory are: ordinances, Acts,
amendments and legislative laws. Statutory law cover all the portion of regulatory
administration of the United Kingdom. It is formed by a particular government and cannot be
sanctioned with the majority consent of both the houses of the parliament.
Common law has no foundation in a statute or legislation. It is developed and established by
the notes written by the judges at the end of a trial. In simpler words, it is the development of
various precedent and orders of the judges on the ruling of a matter. The common law is the
wide base of judgement made in the past years and reference to those rulings of the court.
Common law is also referred to as case laws in the United Kingdom (Jackson et al., 2015).
There are two types of common law: the one where a new judgement, precedent and a ruling
is passed by the court and the one where an existing judgement is interpreted in different
application of law by the court. Common laws are developed in a everyday basis.

Both common law and statutory law can be applied in the courts. The legal representatives to
prove that their point has been established earlier in the form a judgement in a former case
usually refer common laws. Statutory laws are applied in the very formation of a draft that is
to be presented in the courtroom.
M1: Evaluate the effectiveness of the legal system in terms of recent reforms and
developments.
Reforms must be made to serve greater purpose and provide the lesser fortunate what they
have been denied for several years. The law commission of UK is responsible to continually
review the law of England and Wales. It must ensure the laws are fair and impartial in
nature. If need be it must take the responsibility to convey the parliament of United Kingdom
to adopt new law reforms.
Britain has done exceptionally well in the environmental reform of protection of the wildlife
(McGaurr et al., 2017). The woods are being conserved and the wild lives are given the
needed protection.
The UK insurance market is the largest in whole of Europe. In accordance to the Marine
Insurance Act of 1906, despite being the largest insurance market in Europe, it remains to be
unclear, vague and archaic. Hence, reforms such as Insurance Act of 2015, Third Parties
(Rights against Insurers) Act of 2010 and Consumer Insurance (Disclosure and
Representations) Act of 2012 were made. This Acts clarified every aspect of English
Insurance law and removed all the vagueness that was formerly involved.
The most notable reforms of UK is the Constitutional Reform of devolution of powers in
different regions of the country, enacted by the Wales Act, Scotland Act and the Good Friday
Agreement. It changed the unitary system of governance in UK to a quasi federal system
(tutor2u, 2018).

Task 2 - Illustrate the potential impact of the law on a business
P3: Using specific examples illustrate how company, employment and contract law has a
potential impact upon business in your organisation.
Company, employment and contracts law have a potential impact in the running of Pinewood
Studio. It is briefly discussed hereunder:
Company law: If Pinewood Studios do not apply with company laws of the United Kingdom,
its very foundation will become questionable by the law. The origin of a company starts by
implying the company law. The organisation must be registered under the companies Act and
construct appropriate documents of Memorandum of Association and Article of Association.
For example, if the MOA of the organisation has a different spelling of its name mentioned,
the company will have to change its spelling in accordance to the MOA.
If a the company does not follow all the employment laws of the state, the employers may
form a trade union to negotiate and fight for their interests, which are not met by the
organisation. For example: the trade union may go on a strike and drastically affect the
company’s production (Noble et al., 2017).
Contractual laws are applied so that every party behave in a certain manner while they follow
the agreement. If Pinewood Studios breach a clause of an agreement it entered, it will have to
compensate for the damages made to the defaulting party.
M2: Differentiate and analyse the potential impacts of regulations, legislation and
standards on your organization.
Regulations: The regulations imposed by United Kingdom restrict the scope of Pinewood
Studio to have an elaborate expansion in its business. It has to undergo various procedures in
order to expand itself and bring certain changes. The Regulation Acts enforced by the
parliament, specify directives, detains and requirements for the organisation to run in a
certain manner.
Legislation: The legislative structure of United Kingdom governs every aspect of day to day
lives of it citizens. It lays down certain objectives and statutes for the business organisations
which Pinewood Studio must follow.

Standards: The courts use the clause of standards to determine if a product has faults in it and
whether the producer and manufacturer are responsible for damages. Pinewood Studio should
ensure the obligation of standard to continue a smooth form of business (Din.de, 2018).

LO1 &LO2
D1: Provide a coherent and critical evaluation of the legal system and law, with evidence
drawn from a range of different relevant examples to support judgments.
The emphasis laid on the procedures conducted by the courts in UK, involves very little
discussion of the facts of the cases which takes place, in the lower courts of UK. Most
procedural matters including the filing of applications and motions are done in a very
negligent manner. In the Magistrates’ Court, there exists very little engagement with the facts
of any of the matters or cases and most of it has a large bulk of pending cases. The English
judiciary lacks the practice of quick review of cases. There is a considerable amount of
carelessness involved with bail applications and remands.
In case of the High courts, the original side cases receive more enthusiasm from the judiciary
and are dealt with much more energy in comparison to appellate side cases.

Task 3 - Suggest appropriate legal solutions to business problems
P4: Suggest appropriate legal solutions for a range of business problems e.g. termination
of contract, rescue from insolvency and liquidation using your organisation as an example.
If a business organisation does not comply by the rules and regulations set by the legal body
of a country it will definitely face future complication. Its license to practise the certain kind
of trade might also be cancelled. Therefore, a business organisation must be very care while
conducting their trade and commerce in the United Kingdom. The UK has a very efficient
and comprehensive set of laws regarding running of a business (Kraakman et al., 2017). All
the industries, companies, and firms must incorporate and practice these laws in the total
sector trade and commerce. If a certain business organisation does comply to such laws it will
charged by the state. The business laws are formed to serve the purpose of protecting oneself
or an organisation from external forces and to abolish evil and wrongful means of trade and
commerce. If a business organisation involves into any immoral and illegal ways of making
profit, the license will be taken away as well as, the government of the United Kingdom shall
decide that the company must be liquidated.
Legal solution for termination of contract:
If a contract is terminated without performance of duties and before the agreed date of
termination, a suit can be brought against the terminating party. The following are the
remedies shall be consulted for termination of contract-
 The party shall be order to continue the contract until it is terminated by discharge of
duty.
 The terminating party shall be ordered to pay compensation for the damages caused
due to termination of contract.
 The terminating party shall be ordered to execute specific performance, which would
serve relief to the defaulting party.
When a business organisation or a company is in a state where it is incapable of paying back
the debts to the bank and the investors that spent credit on the company, is said to be
insolvent. Insolvency is generally caused by loss in business due to extreme competition and
crisis in the cash flow of the company due to limited funds. Excessive debts taken by the
business organisation or company may also be the cause for its insolvency. Changing and

unfavourable government policies may also cause insolvency of a company (Curry et al.,
2016).
A business organisation can be rescued from insolvency by adopting the following measures:
 Appoint an insolvency practitioner in the business organisation.
 Conduct asset reduction of the company.
 Reduction of comparatively inefficient employees.
A company can be saved from liquidation by practising correct form of business. Liquidation
is a state when a business entity is brought to an end. Winding up of company occurs by the
order of state if it is satisfied that the business run illegally. A company in general winds up
when it is no more capable of being run by trader and all its assets are liquidated.
P5: Provide justifications for the use of appropriate legal solutions in your organisation.
For this report, the example of “Pinewood Studios,” is being used. It is a British film and
television studios. Pinewood Studios are renowned for its excellent facilities, expertise, and
service.
Since the organisation, Pinewood Studios deal with artistic creations it must strictly follow
the Intellectual Property Law of the United Kingdom. The sections of Intellectual Property
Law that chiefly apply on the creative sector are copy rights law and trademark law.
Thus, the organisation Pinewood Studious must comply with the section of laws mentioned
above.
Copyright law of United Kingdom deals with the intangible property of copyright. It is
governed under the Copyright, Designs, and Patent Act 1988(Bently et al., 2014). It claims
the subsistence and ownership of the intangible property. Artistic works which are eligible
for claiming protection under copy right are authorial works such as:
 Original literary work
 Original musical work
 Original dramatic work
 Other original artistic works.
The above-mentioned intangible properties fall under the first sub class of copyright. The second
sub class of copyright are entrepreneurial works:

 Films
 Broadcasting
 Typographical arrangements
 Sound recording
The organisation Pinewood Studios can claim protection under copyright as it deals with original
dramatic work and other original artistic work in the sub class of authorial works. In the sub class
of entrepreneurial works, it can claim protection for the intangible property of films, sound
recording and broadcasting arrangements.
The Pinewood Studious can apply for protection under trademark law of Intellectual Property
Rights, United Kingdom. Every registered company has a trademark of its own and has complete
entitlement to it. It can be a name, logo, monogram, image, design, or a signature (Halt et al.,
2016). The trademark of Pinewood Studios is its name itself. If any other business organisation
uses its trademark, the studio can bring a lawsuit under the title- infringement of trademark. It has
an exclusive right to its trademark and absolute entitlement to it. The extent to which a trademark
can be claimed to be defendable under the law is to what extent the defaulting trademark is similar
to the other. The most important quality of a trademark should be its distinctiveness with the other
existing trademarks. It represents a brand along with its class. Pinewood Studios are entitled to
defend its trademark under the Trademarks Act, 1994.
Use of contract law is also justifiable in the prospect of the British organisation. The body of law
that regulates all the contractual agreements of the United Kingdom is known as The English
Contract Law. The Pinewood Studios enter in various contracts with different parties such as with
the set management team, director of the movies, producers, technical team, etc. Thus, a thorough
knowledge of the English Contract Law will help the studious be clear about what it is getting
into. A contract is a voluntary agreement entered by different parties. An unconscionable contract
will be determined as void and cannot be enforceable by the law.
Hence, when the studio is voluntarily agreeing to the contract it must know all the specific details
of it. It can claim protection under the English Contract Law if the contract is terminated without
the discharge of performance, if the clauses of the contract are breached, and if there involves the
clause of specific performance and the performance is not carried out specifically as mentioned in
the contract.

The Pinewood Studios in itself is a company and compulsorily need to follow all the implications
of the company law. It can seek relief under the United Kingdoms company regulations.
Compliance with the company law of the nation from the very beginning of the formation of the
company will help the business organisation to avoid future complications that usually arise in the
legal aspect of a business. It must seek relief under the Companies Act of 2006.
It can claim protection under the companies law in the prospect of its name(if it is being copied/
duplicated), theft of production, etc.
In matter of changing the essentials of the Memorandum of Association, for example name of the
company, change of address, change of kind of property, it must refer to the company law that it
is governed by.
Absolute compliance of Pinewood Studios with the company law of is of utmost importance to
avoid potential future legal crisis.
M3: Assess the positive and negative impacts of legal solutions to business problems
mentioned in.
The positive effects of legal solutions to business problems are as follows:
 It brings relief to the defaulting party.
 It compensates for the damages made to the defaulting party.
 It establishes the correct form of regulation of a business organisation.
 It puts injunction on the actions of the breaching party.
 It promotes fairness in trade and commerce.
The negative effects of legal solution can be:
 Delay in establishment of justice.
 Damages caused due to excessive expense on litigation.
 Limits the scope of profit.

Task 4 - Recommend appropriate legal solutions based upon alternative legal advice
provided
P6: Recommend legal solutions based upon a different country’s legal system and/or a
different legal framework.
The civil legal system of Spain is based on Roman-Germanic tradition. The Spanish system
of law is hierarchical in nature. Hence, the laws of its lower court jurisdiction are never in
conflict with the laws of higher court jurisdiction. The Spanish legal system is an organised
parliamentary monarchy and the king of Spain is the head of this legal system(Eurojuris
España, 2018). The country has not vested any decision making power on its king and is
declared to be sovereign nation. The domain of administration of justice is reserved in the
Central State, even though autonomous committees administer the real management of the
Spanish resources system.
The courts of Spain are recognised in a hierarchical manner, the Supreme Court that is
situated in Madrid holds the highest position in the Spanish judicial hierarchy.
Legal solutions based on the legal system of Spain, considering the section of Intellectual
Property Law have been discussed below.
Spain administers a consolidated set of Intellectual Properties, which is clarified, regularized,
harmonized by the Applicable Statutory Provisions of Spain.
The Spanish Copyright Law presides over Derechos de autor (copyright) in Spain. It includes
artistic, literary, and scientific works. All these field of original work can claim protection
under the copyright law of Spain.
The Spanish Copyright Act provides protection to the original works of the above mentioned
category (Limegreenip.hoganlovells.com, 2018).
Under the contract law of Spanish legislation it is obligatory for the parties entering the
contract to negotiate the agreement in goodwill. This principle makes all the parties oblige to
behave in a certain way and respect all the clauses of the contractual agreement. If a contract
is breached, the defaulting party will have a claim against the breaching party. It will be held
that the breaching party shall compensate for the damages.

The legislative incorporation of company in Spain is based on the Corporations Law of Spain
and Commercial Codes of Spain. Other sources that regulate the rules for formation of a
company in Spain are the Mercantile Register Regulation and Limited Liability Companies
Law (Companyformationspain.com, 2018). Every company in Spain must abide by these
rules and regulations.
M4: Compare and contrast the effectiveness of these recommendations.
The company laws of both the nations, i.e., UK and Spain have absolute effect on its
respective countries. Both the countries follow a hierarchical system of judiciary to advocate
justice.
In respect of compliance to the Intellectual Property Laws, concerning copyright and
trademark, the companies of UK are governed under Copyright, Designs, and Patent Act
1988 and the companies in Spain are governed under the Intellectual Property of Spain.
Both have an ultimate configuration of effectiveness in its respective countries.

LO3 & 4
D2: Critically review and evaluate the use of appropriate legal solutions in comparison
with alternative legal advice.
Litigation is a system to advocate justice in a stricter manner as codified in the constitution
and jurisdiction of a country, whereas the system of Alternative dispute resolution is much
laid back as compared to that of the courtroom litigation. It is more liberal in nature. The
conclusion reached after litigation is to be obliged by all the contending parties in every
circumstance. In the case of Alternative Dispute Resolution it is not obligatory for the parties
to act according to the conclusion. Only when the parties opt for arbitration out of the other
alternative system, it becomes mandatory for the parties to enact according to the arbitral
award. ADR is more cost efficient in comparison to the hefty expenses involved in litigation.
It also serves its purpose in a minimal amount of time. However, if one wants to establish a
judicial point, ADR in that case will be a waste of time as it is only possible in courtroom
litigation.

Conclusion
Every business organisation must comply with all the laws that the nation formulates for the
kind of business the organisation carries on. If the companies do not follow all the rules and
restrictions imposed by the concerned section of law and government policies, it will either
have to wound up or liquidate its assets or the company will be transferred to a worthy
competitor.
Business laws are imposed on a commercial organisation to ensure fair conduct of trade.

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