Law for Business Managers

This report discusses the importance of business law for managers and its impact on various stakeholders. It explores different cases and provides an understanding of the legal provisions and considerations involved.

Law for Business
Managers

INTRODUCTION
Business law is a part of whole legal system which is specifically designed for governing
the transactions that are carried by business organisations. These regulate the matters of
commercial nature in order to provide a foundation for the organisation to conduct business
activities in an efficient and legal manner. Business law is the base which provides numerous
legal provisions that are followed from the time of inception till its completely wound up.
Furthermore, it can benefit a business in several ways such as conflicts get reduced. This report
comprises of three different cases which depict the power of business law for managers as well
as all the people who might be affected with the application of law.
MAIN BODY
Part 1
The first part is divided into three sub questions which hint at a promise that is being
made in this. There is a person called Sergio who made different promises to his own son
Alexander, secretary Liam and Natasha who is a local news agent. These three promises should
be tested before they can actually treated as a promise.
Law has defined a promise as the agreement which is made by a promisor to the promisee
for the completion of the activities as mentioned in the agreement. It can be in writing as well as
verbal. Law considers the promise as a contract. In simple terms, a promise is something which
includes certain obligations which are to be fulfilled. However, one thing to be taken into
account is that a promise is mere declaration which consists of a consideration holding some
value. It is done between two persons and in no case, a promise made to self can be included
within the legal ambit. According to the law, there are several types of promises and a person can
opt for any one of them according to the requirement and need. The questions involved in this
part can be better understood with the rules that exist in law. These have bee discussed below:
1. A promise should be made between two parties which are promisor who makes
the promise and promisee who accepts it. Furthermore, both of them should be
competent. There are contractual conditions that should be met before making a
promise.
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2. A promise cannot be bind without adequate consideration. Promisor and promisee
should decide the amount of consideration on a mutual basis. A promise is
incomplete without mentioning a valid consideration.
3. If there is any condition in the promise then such condition should be fulfilled
before any other clauses. This means that all the conditions should be completed
prior to any other terms in the promise.
4. A promise is a created only after mutual consent is obtained. There should be
proper promise followed by an acceptance. It is just like a contract which
comprises a promise that should be accepted in order to bind it on the parties.
5. Every term and condition should be disclosed in a clear manner. There should be
clarity in every clause which should have certain meaning. If there is any
ambiguous term in the promise that should be made clear and definite before
proceeding with same.
6. Furthermore, there should be enforceability based on the situations created at the
time of creation of a promise. It should be enforced by taking into consideration
the benefit that the enforceability of the promise can provide to both the parties.
There is one more promise which is known as implied promises that are purely based on
the circumstances. These are created intentionally but are actually the outcome of the situations
that make two parties to make promise with each other. Promises are enforced as it provides a
legal support to the parties by which an action can be taken for the breach or contravention of the
terms and conditions mentioned in the promise. If a promise is made according to the points
mentioned above then it is treated as valid which can be enforced within the legal provisions.
This particular question is about the promises made by Sergio to separate people comprising of
Alexander, Liam and Natasha. Each such promise contained a some valuable consideration.
There have been number of cases in UK Legal System which includes number of cases. Since,
UK legal system works on doctrine of judicial precedent which provides that past law
judgements are considered for the future case laws.
In the benchmark case of Balfour v Balfour (1919), there was a husband who made a
promise to his wife to pay her 30 pounds till the time he is outside England. The obligation for
the promise was to manage the expenses of the maintenance without making any calls to the
husband. This was the agreement to which both the parties agreed. According to the court, the
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consideration was valid enough to be enforced by the court as it involved a valuable
consideration. However, no contract was formed in this deal between the husband and wife.
Also, the judge contented that the promise cannot be held in the legal definition of contract.
Therefore, the performance that should be completed with the new duty should not be included
in the new consideration.
Similarly, in the case of Roffey Bros, they were the builders engaged in the business
activities of on a contract basis. The main task that was took by them is to refurbishing of 27 flats
which were under the authority of housing board. The contract executed between them included
a term for the late completion of the whole project. In order to avoid any delay, Roffey Bros
subcontracted for providing the services of carpenter. The name of the carpenter was Williams.
However, there was delay on account of the carpenter and he was being offered a bonus amount
for fulfilling the tasks without any delay. He continued to carried on the work until the payments
stopped. It was a breach of contract was noticed for which a case was filed against Roffey Bros.
The judgement passed by the court stated that the promise for making bonus payment was
absolutely valid which can be enforceable by the court. The main reason behind this was that
direct benefit which was practical was being obtained and there was no such element of fraud. In
addition to this, the choice for making additional bonus was made by the Roffey Bros. Hence,
the promise to pay the bonus was enforceable.
Part 2
The case provided in this part is about Samantha visited a bank which is local bank called
Extortionate Plc for obtaining information about the loan to be required for her start up business.
She fell down the stairs because carpet was not fixed properly. In order to save herself from the
fall, she put her hand in front of her due to which she got her wrist injured as well as nails were
also broken with the further fall. To this incident, Samantha was informed by one of her friends
about occurring of similar incident with other people also. Therefore, she forwarded a link to
Samantha, the link is about social media account of the bank which is used as a medium through
which clients can make complaints. This case can be a matter of tort law which deals with
damages that a person has suffered on the account of negligence. This case is focused on
defining the tort law according to which the bank is to be treated at fault.
As per the UK legal system, tort is a matter of civil law which refers to an act that is
wrong and a person has suffered from loss or harm. Other features for this is about that a liability
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should be there for the person who has shown negligence or committed the act due to which
other person suffered with this. Such acts are known an tortious. Also, there can be some
circumstances in which criminal actions can also be treated as tort which can occur on the absent
of negligence provided, harm or loss should be suffered by the individual involved in the
situation.
Law has defined tort as something which is wrong due to which a person or other party
has suffered from damages or losses. There are provisions which can help the party claim the
damages. The main aim of implementing tort law is safeguard interest of people that can be
challenged or threatened at a later date. In addition to this, there are number of damages or harm
that are not included in Tort law. In order to understanding the true meaning of law of tort, the
circumstances or interests that are included in the scope of tort are provided below:
1. Any harm related to the properties.
2. Harm to financial interests
3. Harm of any nature which is personal
4. Damage or harm to the reputation
5. Harm on account of due process of law
Tort of law covers various parties which are the queen, employees, employers,
independent contractors, corporations and many other in the same league. Any one among these
can be challenged under law of tort. Furthermore, there are some specific conditions or factors
which should be there in order to defined a tort wrong. These have been elaborated as follows:
Negligence- This element is the outcome because of inadequate reasonable care. In order
to term an act as negligence, the below-mentioned conditions should be met:
 There was duty of care of the victim by the negligent party. In simple terms, it means
there was duty of care for the party who has or is making claim for the damages.
 The duty of care has breached on account of negligence. This can be determined with the
help of reasonable test. This can prove whether the such breach has actually occurred or
not.
 There should be loss or damages to a person because of the breach. The burden of proof
lies on the individual seeking the claims for the loss or damages.
 The loss or damage should be actual and real. It can be a financial loss, damage to
property, physical or mental loss or any other laws which can be included in the
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definition of a tort. Even an emotional distress is also included in the category of loss or
damage.
 Damage can be claimed by using any of the remedies that are available in the law of tort.
The main remedies have been provided below:
Damages- The amount paid in monetary form for providing sufficient help in order to
recover the loss is included in this. It also has number of categories which are as follows:
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◦ Nominal- This is the amount which is awarded where the victim has not suffered any
loss.
◦ Contemptuous- This is when claimant is successful but the court consider the whole
case without merits. A very small or negligible amount is paid as compensation.
◦ General- This is when the compensation is done for non-economic damages. These
include pain, mental or emotional distress.
◦ Special- This type of damage is shown as a part of the action in order to prove the
actual loss.
◦ Aggravated damages- In this type of tort, the court take the decision that it was
committed with wrongful or malicious intentions for raising questions on the
character of the claimant.
The other remedy being injunction which is defined to be an action that prohibits a party to
continue carrying the activities. It can be provided in addition to the damages as decided by the
court.
According to the legal provision, the damages caused by a wrongful act or tort can be
recovered only for one time. There is no scope to bring any facts at a later date for a particular
claim that has been made earlier. Even if the later facts are more severe the claimant has no right
to file a case for the same damage that has been presented in the initial trial.
In addition to this, a party can also avail the defences that are available in the law of tort.
First of such defence is vicarious liability which involve the employee on account of negligence
in the duties as provided by the contract of employment. Another defence can be bring in case of
contributory negligence which provides that the person seeking the damages has acted in a
careless manner which has resulted in damages or loss.
The given case can be resolved with the application of contributory negligence defence. It was
the duty of bank to take care of the carpet that was not properly fixed. Therefore, Samantha can
approach the court and see damages by proving the negligence of the bank. What are the strong
points for Samantha is that she can show the number of complaints that have been made by
different clients about the carpet and the injuries due to the inappropriate fixing of the carpet.

This can help showing the negligence of the bank ok even after receiving so many complaints it
did not take any action for the same. Chicken show her physical injuries and seek damages
appropriate according to her own valuation as well as the decision of the court.
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PART 3
Explanation of the statement “A corporation may be defined as a legal entity or artificial person”
UK has Companies Act, 2006, which defines the word company as an artificial judicial
person having a distinct legal entity which separates it from the members. It also comprises of a
common seal and perpetual succession together with the number of rights and obligations within
the memorandum of association. Every individual should know about the term company along
with arts various features and the advantages as well as the disadvantages that are present in the
business.
A company is treated as an individual personality which is created under the Companies Act
2006. It takes birth or it is incorporated in the eyes of law. The legal provision makes it capable
of having individual rights and liabilities as different from its members. In simple terms, the
rights and obligations of a members cannot be clubbed or held as the rights and obligations of a
company. It is known as law of separate legal entity due to which a company can enter into
contract, open bank account, buy or sell property, etc. In its own name.
Some of the features of a company can be understood in the following manner in order to to
understand the exact meaning of the word corporate. The characteristics are as follows:
 A company does not have eyes, hands, brain even when it is treated as an artificial
judicial person in the eyes of law. Therefore to manage the affairs of the business, it
appoints directors who act as the agents for the company and make decisions on behalf of
the corporate. The directors collectively are known as board of director. Their action
should be for the benefit of company. Furthermore, there exist a fiduciary relationship
between the company and its directors which is the core element in an agent principal
relationship (Salomon, Salomon V).
 Companies Act 2006 provides certain capabilities and rights through which it can enter
into contract and have number of transactions such as opening bank account, making
contracts for the seller by of property and so on. These are all distinct from the rights of
the members managing the business
 The tax burden is also not as much as other types of business organisation. since it is
considered as an artificial judicial person, the rates and tax slab for a company is
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separate. the calculation is also done entirely different from how it is done in case of a
natural person paying income tax on the income earned.
 There is a contractual right of a company to sue or be sued. It can be represented in a
legal proceedings. Also, directors have the power to bring petition in the courts on behalf
of the company to take legal action for any wrongful act that is not beneficial for the
company.
 When an entity is termed as artificial legal entity, it is means that there is an individual
legal existence in the eyes of law. It is also known as juristic person. A corporation is
built through a charter or statue or even by registration in order to get this status. It can be
understood by a landmark case Salomon v. Salomon and Co. Ltd. In which Mr. Salomon
was the owner of shoe business which was later sold for $39,000 to Salomon & Co. Ltd.
Which consisted of Salomon himself, his wife, his daughter and his four sons. The price
for purchasing the business was paid by making allotment of 20,000 shares and 10,000
debentures and the rest of the amount was paid in cash to Mr. Salomon. The debentures
contained a floating charge on the assets of the company. After some years, it went into
liquidation due to which unsecured creditors were given the preference over debenture
due to the fact that Salomon was a the same person. But by considering the facts about
the company, it has this company as a separate legal entity (Adriano, 2015).
 A corporate is both i.e. legal entity and artificial person because it is different
from a natural individual. By treating it is a as an artificial person, it may have number of
rights and obligations but there certain rights which cannot be exercised by it. These
include right to vote, marry, hold public offices etc. Furthermore, it itself is responsible
and liable for the actions and liabilities of the company. Apart from this, a company
cannot be treated as a legal person without being registered under the relevant law. It
cannot start the commercial activities without obtaining the relevant certificates and
completing the formalities.
CONCLUSION
From the above report, it has been concluded that law for business managers is necessary for
governing their activities as well as the affairs of a business. It provides a support for helping an
organisation in caring the activities smoothly and without any hurdle. There are contract which
are formed for the benefit of the business and to achieve the objective that have been defined in
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the memorandum of association. Similarly promises can also be made between two parties that
should be valid and enforceable in order to challenge in the court. Apart from this, law of tort
should also be known to the people involved in managing the business so as to seek the
compensation or damages accordingly.
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REFERENCES
Books & Journals:
Bebchuk, L.A. and Jackson Jr, R.J., 2012. The law and economics of blockholder
disclosure. Harv. Bus. L. Rev. 2. p.39.
Fried, C., 2015. Contract as promise: A theory of contractual obligation. Oxford University
Press, USA.
Wilkinson-Ryan, T., 2012. Legal promise and psychological contract. Wake Forest L. Rev.
47. p.843.
Del Vecchio, L., 2013. Enforceability of Business Contracts of Minors Eighteen Years and
Over. St. John's Law Review. 16(1). p.24.
Luntz, H., and et. al., 2017. Torts: cases and commentary. LexisNexis Butterworths.
Cornford, T., 2016. Towards a public law of tort. Routledge.
Oliphant, K., 2012. Cultures of tort law in Europe.
Lewis, R. and Morris, A., 2012. Tort law culture: Image and reality. Journal of Law and
Society. 39(4). pp.562-592.
Christie, G.C. and Sanders, J., 2012. Advanced Torts: Cases and Materials. West.
Deakin, S. and Markesinis, B., 2019. Markesinis and Deakin's Tort law. Oxford University
Press, USA.
Waqas, M. and Rehman, Z., 2016. Separate Legal Entity of Corporation: The Corporate
Veil. International Journal of Social Sciences and Management. 3(1). pp.1-4.
Salomon, Salomon V. "The Legal issues arising from the following problems are that
of;“lifting the corporate veil” principle, the single economic entity doctrine, what is regarded
as a separate ‘Legal Personality’and also what type of relationship parent (holding)
companies have with their subsidiaries. A company is a legal person separate from its
members, as can be seen in what is regarded the most famous case in company law Salomon
v. Salomon and Co. Ltd. This therefore means."
Adriano, E.A.Q., 2015. The natural person, legal entity or juridical person and juridical
personality. Penn St. JL & Int'l Aff. 4. p.363.
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