Essentials of business law Assignment

Essentials of business law

Table of Contents
INTRODUCTION...........................................................................................................................1
QUESTION 1...................................................................................................................................1
Explaining meaning of Representation and how it is different from term of contract...........1
QUESTION 2...................................................................................................................................3
Presenting the grounds of unfair dismissal under law............................................................3
QUESTION 3...................................................................................................................................5
Roles and duties of directors..................................................................................................5
QUESTION 4...................................................................................................................................7
Explaining the principles that governs award of damages under Tort law and the ways in
which it can be limited...........................................................................................................7
CONCLUSION................................................................................................................................9

INTRODUCTION
Business law include each law which dictate about how to operate any business and
considers law which govern how to start, manage, close and buy any type of business. The
managers and directors of an organization are needed to abide with certain laws and regulation
prescribe by the legal framework of the nation. These laws are related with employment,
contract, heath and safety etc. One of them is Contract which can be defined as promise that is
enforceable under law and in case it is volatile the injured party can seek legal remedies for the
same. In the present report Monica HR assistant of Young & Ernst LLP is given advice related
with a contract entered with car dealership and legal remedies she can seek. Monica is preset
with the information related with role and duties of directors along with basis of unfair dismissal
of employee of firm, which she can present to the directors in the meeting. Furthermore,
provision on basis of claiming the damages under tort law along with limitations is presented in
the report.
QUESTION 1
Explaining meaning of Representation and how it is different from term of contract
Representation:
This can be defined as the statements that are discussed upon as negotiation before
entering into a contract and are related with facts and presentation made during contractual
negotiation. The facts and statements are made to the receiving party in order to induce them to
enter into contract1. It is normally made before or at the time of making contract may be present
in the agreement as well. This is an evidence of the information given with purpose of getting
someone to become party to a contract during its formation For the given case, the statement
made by Chandler, car salesman was a representation to Monica in order to induce her to
purchase the car named as 2006 Ford Mondeo.
Mere Representation and contractual term:
Statements made during the negotiation time can amount to both representation or
contractual term. This depends on whether the party get influenced by the fact of information
1
Contractual term or representation. 2018. [Online]. Available through :<http://www.e-
lawresources.co.uk/Contractual-term-or-representation.php>.
1

presented or does it made a part of contract. It is important to determine the status of statement
as representation or term on written agreement2. As for both cause of action and remedies
available are different. If a statement amount to contractual term and same is not abided with,
innocent party can sue for breach of contract. On the contrary if the facts presents are mere
representation which turns to be untrue the innocent party can bring an action for
misrepresentation.
For constituting a statement as contract term or representation court looks into 4 factors which
can distinguish between both the terms and with that legal status of the statement is decided:
 The parole evidence rule: in this it is defined that where the contract has been put into
writing the statements so made includes in contract will be terms of contract. On the
contrary verbal statements will be considered as mere representation. For the present case
there has been presence of written contract between the car dealership and Monica. In
this type of cases, sales receipt itself is considered as contractual agreement which is
implied in this types of sales transactions3. The statement made Chandler was not parts of
sales deed hence this is not term of contract instead it was mere representation made by
car salesmen.
 Relative expertise of the parties: This could be elaborated as the expertise and key
knowledge about the product or service held by either of the party to contract. In case
when it is formed through representor chances are more of it is replicated as contractual
term. Conversely, when representee possess more expertise knowledge it is more likely to
be a representation. This fact was established in the case of and was directly established
under Oscar Chess V William, 1957, as the statement related with the age of car was
mere representation and was not a term. In this case, facts were stated by Chandler to
Monica regarding the status of care and being persuaded by his statement only Monica
bought the car 2006 Ford Mondeo. Here, the representor have expertise knowledge as he
was the sales person as car showroom and must have full information about conditions
and positions of the cars along with working conduction.
2 Davidov, G. and Eshet, E., 2015. Intermediate approaches to unfair dismissal
protection. Industrial Law Journal. 44(2). pp.167-193.
3 Representation. 2018. [Online]. Available through
:<https://uk.practicallaw.thomsonreuters.com/4-501-4472?
transitionType=Default&contextData=(sc.Default)&firstPage=true&comp=pluk&bhcp=1>
.
2

 Importance of the statement: This can be stated as the important of the statements
represented by the representor comparatively more chances of it are becoming term of
contracts. In the given Case, Monica made her mind to purchase specific model car only
when Chandler presented the awesomeness of the car and that she must not miss this
chance to buy the same car. The importance of car is presented by the car sales person
only. As this statement was not stated in agreement then it is not termed as contract as
this was reflected in the case of Ecay v Godfrey [1947]
 Time: This can be defines as the time gap between statements made and contract entered.
More the lapse of time, more chances of it to become representation. Lesser the time,
more likely it will become term of contract4. In the present scenario there was no time
gap between the statements and entering the contracts. As soon as Chandler told Monica
about the fabulous chance she got to buy car of model 2006 Ford Mondeo, she bought the
car immateriality without having any second thoughts.
For this case, it can be stated that though last three conditions of a statement to be a
contractual term are fulfilled but the major one of it being present in written agreements is not
established. Hence, Monica cannot sue Car dealership for selling her a car which breakdown in
just two weeks of purchase. Monica can sought the remedy as bring an action against the car
dealership and Chandler as well under misrepresentation.
QUESTION 2
Presenting the grounds of unfair dismissal under law
Every employee under the employment of an organization is adhered with certain rights
and responsibility. The rights are granted from the time of their recruitment till the time they
leave the company either through resignation or dismissal. Resignation is the one under which an
employee leaves the firm with own will but under dismissal staff member is discharged from
his/her duties and responsibilities by management of business. The dismissal must not be unfair
at all, as this can result in legal proceeding, other legal complications and moreover, damages the
reputation of the entity.
Fair and unfair dismissal of employee:
4 Schauer, M. and Gruber, M., 2018, November. Article 7 Unfair contractual terms and
practices. In Commercial Law. (pp. 1342-1349). Nomos Verlagsgesellschaft mbH & Co.
KG.
3

As per the Employment Rights Act, 1996, every employee who have competed a
qualifying period of service has a right to not to be dismissed on unfair grounds. In case an
employee is to be dismissed should be presented with the reason for discharging through the
employment5. The reasons must be precise and reasonable rather than be vague and
unacceptable. Grounds on the basis of which employment is terminated if falls under unfair
category the employee have a right to seek legal remedy to resort the job back or to claim
damages for being out of employment for a specific term.
The categorizes of Fair dismissal are as follows:
 The employee lacks certain capability and qualities which is an essential requirement
for performing the job or activity under the employment.
 Termination was due to conduct of the employee such as dishonesty, poor attendance,
failure to follow the instruction and guidelines which can amount to gross
misconduct.
 The business goes under redundancy which is genuine.
 The continuation of the business might be outcome of contravention of the law and
regulation of the nation.
 Any other reason which is justifiable and substantial.
Ground of unfair dismissal:
Dismissal of an employee get automatically unfair, because of connection by exercising
specific rights under employment which are stated below:
 The employee is terminated because she is pregnant or is about to go no maternity leave.
 The employee has applied for parental or paternity, adoption leaves or time off for
dependents family members.
 The employee got recognition in the trade union.
 On the grounds of their working hours such as fixed or part-time employment.
 On the basis of working hours that is national minimum wages, annual leaves or working
time regulation.
 Political or religious opinion.
 Sexual orientation
 Taking legal action against employer
5 Fair and unfair dismissals. 2018. [Online]. Available through
:<http://www.acas.org.uk/index.aspx?articleid=4098>.
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 Indulging in whistle blowing activities for the firm, that to inform management about
unfair practices within firm6.
 Complaining about misbehavior, metal and physical Harassment at the workplace.
A termination or dismissal of employee is considered as unfair when the management of the
organisation:
 It could not extract any significant reason to employee for his/her dismissal.
 When it is not related with capability and ability of the worker, that is employee possess
all the required skill to perform the job related activities and still dismissed.
 Employee has not been given a chance to preset himself/herself.
 Not giving prior notice at least the notice stated in employment contract or the statutory
minimum notice period, whichever is longer (except for the grounds of immediate
dismissal such a gross misconduct).
Monica, as HR assistant of the Young & Ernst LLP, must provide all the above
information related with fair and unfair dismissal to the broad of directors. The employee with
whose performance the management of the organisation is not happy must not be dismissed on
any of the ground falling under unfair categories. The worker must be present with a fair,
reasonable and justifiable reason for his/her termination7. He/she must be given a prior notice
which is defined under the employment contract of the firm. The Directors of the Young & Ernst
LLP, must not indulge in any practice which can lead to unfair dismissal of the employee as this
would result in legal proceeding and unnecessary judicial complication for the management and
organisation as well. The employee shall be given a prior notice, reason for his/her termination
long with all the leaves and any other amount due from the business under the capacity of his/her
employment.
QUESTION 3
Roles and duties of directors
The Companies Act is formed through two bodies of people such as board of directors
and shareholders. The directors are replicated as effective agents of organization as appointed
through shareholders for managing its regular affairs. The basic rule of director must act together
6 Unfair dismissal. 2018. [Online]. Available through
:<https://www.gov.uk/dismissal/unfair-and-constructive-dismissal>.
7 Cartwright, J., 2016. Contract law: An introduction to the English law of contract for the
civil lawyer. Bloomsbury Publishing.
5

as board but it might delegate certain power for individual directors along with committee of
board. The board of directors with management charge of business and highly responsible for
ensuring that organization accomplish statutory obligations. Furthermore, role of individual
director for participating in board meetings for enabling board to reach decisions and ensuring
about fulfilling the obligations of company. Monica should communicate general duties to its
new members which are stated below:
 Act within powers: The members must act as per constitution of organization and
powers could be excised with given objectives. The constitution of business unit must
consider articles of association and resolutions and agreements with constitutional
nature8.
 Promote success: The success of organization must be promoted by giving advantage to
its members as whole. According to legislation, it should be regard to likely
consequences of decision for long term perspective, interest of employees, requirement of
fostering business relationships with customers, suppliers and others. In the same series,
impact of operation of company on environment along with community, need for acting
fairly among members of business organization and desirability of organization for
maintaining reputation for huge standards of conduct of business.
 Exercising independent judgement, skill, reasonable care and diligence: They must
exercise independent judgement for making own decision as this will not prevent for
acting as per constitution of company's agreement which organization has entered into.
On basis of skill, reasonable care and diligence must be expected from person carrying
with similar functions related to company. The expected standard is directly measures
with both subjective and objective yardsticks. The actual understanding of director and
abilities might not enough if more could be expected for someone in her or his position.
 Avoid conflicts of interest: The situation must be avoided or must have interest which
might conflicts with interest of organisation. It will be applied for exploitation of
information, property or opportunity, regardless organization must undertake advantage.
If any situation of potential conflict must be authorised and permitted through AOA and
8 Yoshikawa, T. and Hu, H. W., 2017. Organizational citizenship behaviors of directors: An
integrated framework of director role-identity and boardroom structure. Journal of
Business Ethics. 143(1). pp.99-109.
6

act in appropriate manner, remembering obligation for promoting success of
organization.
 Absence of accepting benefit from third parties: The benefit from third party could
not be accepted because as director where is absence of infringed duty and could not be
regarded with increment in conflict of interest9.
 Declarants of interests proposed or existing arrangements and transactions with
organization: There is presence of any interest in arrangement or transaction with
business entity, then it should be declared with extent and nature of interest to other
directors. In this particular case of transaction proposed must be performed before
entering in this. Furthermore, with case of exiting transaction it should be reasonably
practicable.
QUESTION 4
Explaining the principles that governs award of damages under Tort law and the ways in which it
can be limited
Tort law and damages: In common law jurisdictions, a tort is a civil wrong that unfairly
causes someone else to suffer loss or harm, resulting in legal liability for the person who
commits the tortious act. A tort is established with facts of duty of care, breach of the duty
damages and causation. Although crimes may be torts, the cause of legal action is not necessarily
a crime, as the harm may be due to negligence. The person or the victim who have suffered
injury or harm can recover the loss or damages in a lawsuit10. The injuries in common law are not
limited to physical injuries it also includes emotional, economical or reputation injuries along
with violation of the privacy, property or constitutional rights. The aim of awarding damages
under tort law is to put the injured party in the same position as he/she would have been in if the
tort had not occurred. The damages are subject to remoteness, causation and Mitigation. The
damages under tort is generally of two categories:
1. Compensatory and:
9 Collis, J., Jarvis, R. and Skerratt, L., 2017. The role and current status of IFRS in the
completion of national accounting rules–Evidence from the UK. Accounting in
Europe. 14(1-2). pp.235-247.
10 Measure of damages in tort. 2018. [Online]. Available through
:<https://uk.practicallaw.thomsonreuters.com/4-107-7398?
transitionType=Default&contextData=(sc.Default)&firstPage=true&comp=pluk&bh>>>cp
=1>.
7

2. Punitive
The actual damage falls under the category of compensatory but do not include punitive
damages the compensatory damages are intended to relieve the injured party for his /her loss or
injury. Before awarding a damage under tort of certain fasts are determined with the injury
caused and the circumstances existing at that time:
 the nature of the injury,
 the relationship of the parties and type of risk involved
 the rule of liability,
 whether the liability is individual or vicarious,
 Any existing imperfection.
Types of damages claims under tort law are:
 Nominal damages: This are the claimes which are awarded to a person without suffering
any substantial injury or loss for which he or she must be compensated.
 Contemptuous damages: these are awarded when the harm caused to the claimant is very
low and the court is of the opinion that the claimant was wrong to bring a claim. They are
the very similar to nominal damages, in this plaintiff is required to pay damages for
bringing the lawsuit.
 Compensatory damages: this are the payment made by the party who have committed tort
for the actual injury suffered11. It is an amount granted under common law by a court to
compensate a person for his/her specific loss, damage or injury suffered as a result of the
unlawful conduct of another.
 Aggravated Damages: These are the damages awarded to the plaintiff to reflect the
exceptional harm done due to action of tort. Under this the suffering other claimed is
determined and according the claims are granted to him/her.
 Punitive Damages: this damages are awarded under special cases only. This is granted
to establish the legal interest of the law to punish a person for his/her unlawful conduct.
Limitation of damages:
11 Ferrara, S. D. and et.al., 2016. International Guidelines on the Methods of Ascertainment
of Personal Injury and Damage Under Civil-Tort Law. In Personal Injury and Damage
Ascertainment under Civil Law. (pp. 583-602). Springer, Cham.
8

As per the tort law of UK the damned claims so awarded under the common law gets
restricted or limited with the level of damages or the conduct of the plaintiff or injured party. If
both the parties to are under negligence the amount of claims get reduces or nil.
For the present case o Joey and Ross, it could be stated that both are undertaken in
negligee. But Ross owed a care of duty of care as protecting all those persons and citizens from
any harm while driving motor vehicle on the road. He was listing to music and was engaged in
changing the radio station in his car which made him collide with Joey who was walking on the
road out of laziness as the path was under maintenance. Ross is labile to pay damage claims to
Joey as he breached his duty of care12. This damage is granted by keeping in mind the point that
with distracting from driving Ross could have hurt anybody instead of Joey. But in this case the
damages would be limited and Joey will not be granted full amount of his treatment as he was
also under negligence as well under tort, hence as certain sum will be permitted only as per the
discretion of the court.
CONCLUSION
With completing this report it can be concluded that contract law is one of the essential
law which defines the legal status of transaction entered under business or otherwise.
Representation and term of contract are different as the former one do not have legal
enforceability but remedies can be sought. Monica cannot sue car dealership rather she can claim
damages. Before dismissal of employee director must give proper chance to make his case and
give clarification, in no case dismissal must be seen as unfair. Furthermore, it can be articulated
that as per law directors have a set of duties and responsibilities which they must adhered to. For
the case of Ross, it has been interpreted that he was under negligence and owed a duty of care
but Claim of Joey for damages suffers have been restricted as the same is limited under the tort
law.
12 Bowers, J. and Lewis, J., 2018. Whistling for Dismissal and Detriment Remedies: Royal
Mail Ltd v Jhuti. Industrial Law Journal. 47(1). pp.121-134.
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REFERENCES
Books and Journals
Bowers, J. and Lewis, J., 2018. Whistling for Dismissal and Detriment Remedies: Royal Mail
Ltd v Jhuti. Industrial Law Journal. 47(1). pp.121-134.
Cartwright, J., 2016. Contract law: An introduction to the English law of contract for the civil
lawyer. Bloomsbury Publishing.
Collis, J., Jarvis, R. and Skerratt, L., 2017. The role and current status of IFRS in the completion
of national accounting rules–Evidence from the UK. Accounting in Europe. 14(1-2).
pp.235-247.
Davidov, G. and Eshet, E., 2015. Intermediate approaches to unfair dismissal
protection. Industrial Law Journal. 44(2). pp.167-193.
Ferrara, S. D., and et.al., 2016. International Guidelines on the Methods of Ascertainment of
Personal Injury and Damage Under Civil-Tort Law. In Personal Injury and Damage
Ascertainment under Civil Law. (pp. 583-602). Springer, Cham.
Schauer, M. and Gruber, M., 2018, November. Article 7 Unfair contractual terms and practices.
In Commercial Law. (pp. 1342-1349). Nomos Verlagsgesellschaft mbH & Co. KG.
Yoshikawa, T. and Hu, H. W., 2017. Organizational citizenship behaviors of directors: An
integrated framework of director role-identity and boardroom structure. Journal of
Business Ethics. 143(1). pp.99-109.
Online
Contractual term or representation. 2018. [Online]. Available through :<http://www.e-
lawresources.co.uk/Contractual-term-or-representation.php>.
Representation. 2018. [Online]. Available through
:<https://uk.practicallaw.thomsonreuters.com/4-501-4472?
transitionType=Default&contextData=(sc.Default)&firstPage=true&comp=pluk&bhcp=1>
.
Fair and unfair dismissals. 2018. [Online]. Available through
:<http://www.acas.org.uk/index.aspx?articleid=4098>.
Unfair dismissal. 2018. [Online]. Available through :<https://www.gov.uk/dismissal/unfair-and-
constructive-dismissal>.
Measure of damages in tort. 2018. [Online]. Available through
:<https://uk.practicallaw.thomsonreuters.com/4-107-7398?
transitionType=Default&contextData=(sc.Default)&firstPage=true&comp=pluk&bh>>>cp
=1>.
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