Law for Business Managers: Case Studies in Legal Problem Solving

This case study explores several legal scenarios relevant to business managers within the UK legal framework. The first part examines a situation where an individual, Mike, promises a reward to the police for finding his stolen watch, analyzing whether the police are entitled to the promised money giv...Read More

Law for Business
Managers

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
PART 1........................................................................................................................................3
PART 2........................................................................................................................................6
PART 3........................................................................................................................................8
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
The legal system of UK is very complex and unique. It provides wide range of protections to
employer and employee. The legislation of UK is divided into two parts, which are public and
private law. Private law includes Company law, Contract law and Employment law. The
Company Act, 2006 secures the right of people working in the organisation and ensures safety
and security of its employees. An agreement between the parties which is enforced by law is a
contract (Angwin, Demir,and Steijger-Storm, 2022). The three basic rules of contract law are
offer, acceptance and consideration. The Employment Law, 2008 ensures the protection of
employer and employees by providing them legal protection against dismissal, pay, holidays etc
to safeguard the interest of employers and maintaining the relationship o both the parties. This
report will cover various aspects of Company law and rights of the employer and employee in an
organisation.
TASK
PART 1
Mike realises that his house has been burgled after coming home from holiday. He then
immediately informs the police about the incident and was very very disheartened to see the gift
of his late father which was the Watch, being missed from the missing items of the house. He
then desperately promises the police to award him with £100, if he finds his watch (Dahal,
2018). The police was further able to recover most of the lost items out of which he was also
able to find the lost watch. Mike then further refuses to pay £100.
Issue
 Whether police is entitled to receive the promised money?
 What are the legislative provisions in this context.
Rule

The situation of the government of UK and police in relation to the finding of lost property is
very much complex and irrelevant. Currently, the police are not endowing any responsibility for
recovering and handing the lost property items. Although reasonable steps must be taken in order
to ensure the finding of lost property.
The situation of lost property in UK was not a common problem in the early 18th century. The
growth in transportation of items or products led to misplacing of more items which created first
public offices which are Lost Property Offices (LPO). These offices would help in finding out
the lost property items through advertising of it in newspapers and claiming of it (Ettredge, Guo,
and Li, 2018). Then after some time, the Metropolitan Police had introduced a 'Central
Repository for Lost Things' in 1869. Its main purpose was to reduce the crimes of stealing
properties from places or houses of people and to decrease the criminal activity.
The activity of reducing the crime of stolen property was managed by the police across the
country of United Kingdom. The law gets more complex in the situation of keeping the lost
property to oneself or returning it to the owner. The most reasonable attempt would in handling
such type of complicated situation is mentioned below:
Firstly, who ever finds the lost property should hand it over to the respective authority which
can help in regaining its true ownership.
Secondly, if someone finds a lost item in public, then he should not take it but just inform about
the mysterious item to the police.
Lastly, one can also inform the lost property through advertising about in in newspaper,
television and social media.
There is also a policy of 'return to finder' which will help in retaining the lost property to the
original owner. The time period for returning such items ranges from a month to year where a
person can claim about his lost property or item. This service has no legal liability on the person
who receives or gives the lost property.
Application
The policy of returning the lost property to its finder has helped in retaining the items to its
original owner. There has been a period of approximately 7 to 14 days for returning of lost
items, provided it should return to its original owner without any complexities (Hossain, Bari,
Mahmud, and Khan, 2021). There are also some items which cannot be kept for a long time by

the receiver of lost property. These items include finding of food items or which can rotten or
spoil, if kept for a long time. Therefore, it is not always necessary that the receiver will have the
belonging of lost property. The new powers given to the police has made it not necessary to
retrieve the lost property as it can be kept by whoever receives such property. There is no legal
obligation to give back the item of lost property.
Conclusion
Therefore, the police is not entitled to receive the promised amount from Mike, as it was his duty
to find the lost property being in the authority of police, who provides services to common
people in place of crime which even includes finding of lost property(Leng, Ozkan, and
Trzeciakiewicz, 2021). The position of police in the situation of lost property is somewhat
uncertain and not reliable in taking effective measures at it depends on the situation about
finding or retrieving of lost product or property.
The principles of lost and found property are:
• Police With effect from the 1st February 2019 will no longer keep records of reported found
property until it falls into certain categories.
 The property that is into the possession of Police will be dealt with responsibly and with
due respect for owners’ rights.
• Property will be classified as ‘Found’ coming into Police possession and where possible,
reunite it with its owner.
• Police will further take the authority of it in accordance with this procedure where the owner
cannot be traced.
• Except in the public interest and subject to the conditions provided for by law, police will not
deprive others of their possessions.
. • Officers and staff must consider the safety of the public and themselves and carry out a risk
assessment, before handling any property.
• In situations where property is in possession of police, that is dangerous or illegal, property
will be disposed of in an appropriate manner in relation to the safety of the public and staff being
paramount.

Describing Property
• The found property items must be described as much as clearly and as thoroughly as possible to
verify the recognition and make the record to be reliable. For example, ‘a camera’ that was found
was not sufficient evidence to be able to reunite it with its owner (Levine, 2020). After that
information should be obtained before the report is taken into account. The details of colour,
size, shape and any names, marks and other identifying features. The manufacturer’s number,
serial number and or other unique identifiers must be included.
• Officers must not make any assumptions in relation to the property that may not lead and
possibly make the process of identification very complex. For example, In order to gain precious
stones rather than assuming an item of jewellery which is gold, it is better to state that item as
“made of yellow metal which containing a single white stone”, than described as a gold and
diamond solitaire ring.
• The suggestion of this Force is that the public shall be encouraged to retrieve the property from
the outset and the service of police will not take and record property that is found except under
certain situations where retention by the finder shall not be permitted.
Exceptions of the above are:
 Where the finder of the lost product is a paid or unpaid servant of the Police service;
 Where the lost property was found on premises of police, in vehicle of police, in a
vehicle hired for police or otherwise used by police;
 Where the property is suspected of being of value for the evidence or could be used to
support the commission of offences;
 Where the property is a product which requires special action;
 Where it would be illegal or not lawful for the finder to retrieve the property;
 It would be unwise to retrieve the property where in the opinion of an approved person;
or
 The Cash of any amount and products capable of containing data – for example mobile
phones or computers.

PART 2
In the given situation, it was observed that the Cristine, is an employee of 'Super Fizzy
Ltd.' which is manufacturing company of beverages. During her employment, she has learned the
formula of popular beverage named ' Super Cola' (Machiridza, and Thondhlana, 2022). the fizzy
drinks .
Issue
 Whether Cristine is bound with the contractual clause?
 If yes, what will be that clause?
Rule
The Contract law of the UK is uncodified that impose several rights and liabilities over the
parties. The terms and condition laid down under the employment contract is binding upon the
parties. There are various clauses inserted into employment contract to made the parties agreed
upon the terms and condition of an organisation. The contract law of UK is vast and complex,
enforce the rights and responsibilities of the parties. It obliged the parties to comply with the
clauses and if party fails to do so , will be held liable for the breach of contract.
The confidentiality clause is one of the essential clause that restrict the parties to share
vital information from the outsiders. It is made for legitimate purpose and prevent the employees
from causing commercial loss to an organisation. It is made to maintain the confidentiality of
information that are secretive in nature and involves commercial benefit. The contracted parties
are bound to not disclose the crucial information, technique, process, formula and any other
related sources that give special benefit to an organisation. This clause is made within contract in
order to secure the intellectual property rights of the company such as trade secret. The Public
Disclosure Act of 1998 has made major amendment in the Employment Rights Act of 1996
which declares the confidential information void if it exclude the worker from using protected
disclosure. However, the trade secret and confidentiality clause are complementarity to each
other and introduced in order to secure the rights of the owner (Maggiolino, 2019). The main
reason behind inserting the confidential clause is promoting the new innovation and technology
in order to contribute in the growth of the economy. The valuable information, technique,
method, process are secured by trade secret under the Tread secret Regulation Act of 2018.
The major regime has been taken place in the economy of UK which grants special
rights to the information holders from infringement of their legal IP rights. IT protect the

company from using, obtaining, and disclosing the information unlawfully with the intention to
cause loss or injury to the information holder. In June 20178. the Trade secret Directive has been
introduced to provide statutory protection to the owner of the trade secret ( Niteesh and Sai
2022). According to Article 39 of the TRIPS Agreement, the trade secret involves such
information that has commercial value in the market and necessary step has been taken to secure
the vital information from the outsiders. It also provide the remedies for infringement of the
owner's rights.
Application
Cristine agrees with the terms of contract that she has made in relation to trade secret. She is
legally bound with all clauses mentioned within the employment contract. The 'Supre Fizzy Ltd'
is renowned organisation and famous for its Super Cola drink. However, the company has their
own trade secret over the manufacturing process which entitled them to add confidential clause
in its agreement to restrict the employees from disclosing the information in order to gain
competitive advantage in the market. The unique taste of their drink helps them to compete
against the other beverages company to attain success.
The confidential clause impose limitation on the employees from using, manufacturing
and unauthorised use of method which they have achieve from their course of employment. This
clause is important for protecting trade secret and other crucial information to an employer.
However, there are three stages of determining the confidential information under trade secret
which includes :
 An information must be vital for developing business strategy and reasonable steps must
be taken to maintain its secrecy.
 The receiver of such information has a duty of keep it secret.
 The use of such information create liability over the unauthorised user.
The unlawful use of confidential information allows the remedies to the Super Fizzy Ltd. Which
includes compensation, injunction , damages and other compensation as per discretion of court.
Conclusion
Therefore, the confidential clause is binding on the Cristine and she has to maintain the privacy
of the company by not sharing any manufacturing process related information to the outsider
because it has commercial value and may affect the profitability of an organisation.

PART 3
The Salomon v. Salomon &Co. Ltd. is a landmark judgement that creates history in
corporate world. In this case, Mr. Salomon sold his show company as per the provision of
Companies Act of 1862. Mr. Salomon along with their wife and children were the members of
the company. He had received the fully paid up share and debenture. Eventually, company went
to liquidation and unable to pay the creditors. The liquidator made attempts to liable the Salomon
for his act but Court interferes and agreed that the company is distinct from its wonersd and he
will not be held liable for the loss suffered by the creditors.
Issue
 Whether Salomon was responsible for the company's debt?
 What are the exception and legal consequences of the rule established in this case.
Rule
The UK company law is comprehensive and wide. It defines the procedure and ways of
incorporating the company. The Company Act of 2006 provides the essential features to the
company. It cover the wide range of protection to employer and employees to ease the operation
and activities that take place in an organisation. The company is considered as separate legal
entity that is distinct from its owners. Company has a legal recognition, incorporate by the Act of
2006. The Company is formed by statutory framework, act as artificial person which has
common seal, right to sue, to be sued by their own name. The Court held that the company is
artificial body and legally recognised by the statute (Tipu 2020). Like any other independent
person ,the company enjoys several rights and responsibilities towards its members. The rule of
separate legal entity was established that recognise the company as an independent body of
persons.
Application
According to the UK Corporate legislation, the company is completely different body from
their shareholders. As it is incorporated by the statutory legislation that give its special rights to
act as separate legal entity and exercise the rights. In the case of Salomon v. Salomon, he was
just an agent of its principal company. The Court further stated that he was not committed any
fraudulent act and had given the priority to pay the liquidator rather then creditors. In the case of
Lee v. Lee's Air Farming Ltd.,1960 UKPC33, the Court ruled out that company is always
distinct from its shareholder and directors and impose limited liability over its members.

Exception of General Rule
Piercing the Corporate Veil: It is an exception of the general rule of separate legal entity. It is a
situation Court does not give protection to the directors and the owners of the company. When
the corporate personality tries to cover their wrongful act and fails to maintain the separate
identity of their companies. In the case of Gilford Motor Company v. Horne [1933] Ch 935,the
Court held that company is formed to carry out various activities and breach of their legal duty
prohibit its members to act as the owner of company.
Evasion Principle: It airses due to evasion of existing obligation for the management of future
risk to meet the purpose of incorporation. In the case of Prest v. Petrodel Resources Ltd., 2013
ER 795, the Court held that evasion principle is an exception of general rule laid down in the
case of Salomon v. Salomon. The corporate personality is discarded from its owner action and
acting as the company itself.
Conclusion
Therefore, the act of owner is always distinct from the company and as it has their own
corporate identity. The essential feature of company is legal personality always separate from its
members including shareholders and directors.
CONCLUSION
From this above report, it has been concluded that company law is detailed document that
defines the roles and responsibilities of each members of an organisation. The UK legal system
is unique and developed over times. The legislative framework secure the rights and duties of the
members within an organisation. The contractual agreement between the parties are binding

upon them and obliged top comply with it. The trade secret is taken by the company to secure the
vital information that have commercial value and used to gain advantage over the competitors.
However, the company is legal personality and always distinct from its member as evolved by
the landmark cases that creates the history in the UK legislative system.
REFERENCES
Books and Journals
Angwin, D., Demir, R. and Steijger-Storm, M., 2022, July. Lost but Found: Bringing Strategy
Practice Back into Strategy Teaching. In Academy of Management Proceedings. Academy of
Management Briarcliff Manor, NY 10510.
Dahal, R., 2018. Salomon v Salomon: Its Impact on Modern Laws on Corporations. Available at
SSRN 3169431.
Ettredge, M., Guo, F. and Li, Y., 2018. Trade secrets and cyber security breaches. Journal of
Accounting and Public Policy, 37(6), pp.564-585.
Hossain, M.J., Bari, M.A., Mahmud, M.T. and Khan, M.M., 2021, October. Web and Mobile
Application Based Missing Query Platform (Lost and Found BD). In 2021 IEEE 12th
Annual Information Technology, Electronics and Mobile Communication Conference
(IEMCON) (pp. 0074-0079). IEEE.
Leng, J., Ozkan, A., Ozkan, N. and Trzeciakiewicz, A., 2021. CEO overconfidence and the
probability of corporate failure: evidence from the United Kingdom. The European
Journal of Finance, 27(12), pp.1210-1234.
Levine, D.S., 2020. Covid-19 trade secrets and information access: an overview. Available at
SSRN 3838892.
Machiridza, L.H. and Thondhlana, T.P., 2022. Lost and Found Property: Evaluating Efforts to
Resurrect and Resuscitate ‘Institutionalised Garbage’in Post‐Colonial Zimbabwean
Museums. Curator: The Museum Journal.
Maggiolino, M., 2019. EU trade secrets law and algorithmic transparency. Available at SSRN
3363178.
Morikawa, M., 2019. Innovation in the service sector and the role of patents and trade secrets:
Evidence from Japanese firms. Journal of the Japanese and International Economies, 51,
pp.43-51.

Niteesh, S. and Sai, V., 2022. Participation of Shareholders in Corporate Governance. Issue 1
Int'l JL Mgmt. & Human., 5, p.1377.
Tipu, U.F., 2020. Assignment on Peace Treaty, Lost Property, Foundling, Rules for Apostate,
Spoils of War in Muslim Personal Law. Lost Property, Foundling, Rules for Apostate,
Spoils of War in Muslim Personal Law (July 15, 2020).