Legal Aspect of Business - PDF

Legal Aspect of Business

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
ASSESSMENT TASK....................................................................................................................1
1 Civil and criminal liability under UK law for accidents and determination of liability of
Andrew........................................................................................................................................1
2. Explaining the basic legal principals related to contract and terms for various business
activities......................................................................................................................................4
3. Explaining the legal models for conducting a business and activities along with their
advantages and disadvantages.....................................................................................................6
4. Explaining the legal procedure airing in the context of business issues over employment
status............................................................................................................................................8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
A business organisation needs to comply with a range of legal aspects, rules, legislations
and regulations while performing its business activities. UK government has developed a range
of business laws for the purpose of monitoring and controlling various business activities whithin
the country. The present assignment includes solutions of various legal business disputes on the
basis of numerous rules and laws applicable on them. majorly the legal solutions of the problems
are being provided on the basis of civil laws, criminal laws, contract laws of the country. In
addition, for the purpose of providing the effective legal solution of the business problems,
employment law of the country is also taken into consideration.
ASSESSMENT TASK
1 Civil and criminal liability under UK law for accidents and determination of liability of
Andrew
Facts about the case:
Andrew was driving a car and met with a sudden accident with a pedestrian, Bianca. he
got serious injury due to accident and had to take leave from work.
Issues:
The issue in the present case scenario is to determine legal liability of Andrew towards
Bianca and to provide details about all the possible outcomes for Andrew on the basis of civil
and criminal laws of the country.
Rules:
Road traffic act 1988: Government of UK has formed road traffic Act 1988. As per this act,
person driving on the road needs to be careful while driving and must be ensure about not
harming any person present on the road (Cartwright, Roach and Armitage, 2019). Further, it
states that if a person injures any another person due to negligence, he would be able to
compensate all the damages and loss suffered by another party.
Civil laws:
Civil laws refers to the laws that provides relief at the time of suffering from any injury
or damage due to wrong activity or offence of another person. Civil law also helps the
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government by providing legal rights and remedies for person that have been injured due to act
of another party. Civil law contains the following legal aspects:
 Duty of care: As per this aspect of civil law, each person of the country have duty not to
harm any another person and care about each person as well. In the present case scenario,
Andrew have a duty to care about each present on the road and not to harm any of them
while driving the car.
 Negligence: negligence refers to a situation, when an individual fails to fulfil his duty
provided by any of the the legal system of UK. The act of negligence may amount to
attract legal liability of the person towards another person who has suffered any loss or
injury due to negligence (Matthews and et.al., 2018). In the present case scenario, due to
negligence of Andrew, Bianca had suffered physical injury and damage.
 Breach of duty: Breach of duty refers to performing any of the activity having
overriding effect over the duty provided by the government through its legal system.
Breach of duty results in attracting legal penalties and liability of the person who has
breached the duty against the person who has affected due to the activity.
 Compensation in civil law: Compensation refers to the award provided to the person
who have suffered with the injury or damages due to negligence or breach of duty of any
other person including any organisation, individual or any other corporation (WHAT IS
A CIVIL CLAIM FOR COMPENSATION?. 2019). In the presnt case scenario, Bianca
may get compensation from Andrew due to damage and injury suffered by him caused
due to the accident.
Criminal law:
In UK, criminal laws deals have been formed to deal with the offensive activity
performed by any person of the country due to that has been resulted in providing loss or damage
to a whole community or the society rather than any single individual (Watson, 2018). In the
present case scenario, as due to negligence of Andrew at the time of driving car, only Bianca has
suffered loss and injury from the accident. In this order, the criminal law will not be applicable
on the present given case.
Difference between civil law and criminal law:
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Following are the major difference between civil laws and criminal laws of UK:
Basis Civil laws Criminal laws
Definition These are the laws that have been
formed for the purpose of providing
reliefs and remedies to the person who
has suffered any loss or damage due to
negligence or breach of duty of
another person of the country (Civil
Law vs. Criminal Law: Breaking
Down the Differences. 2019).
On the other hand, crminal laws are
the rules and regulations that have
been formed for the purpose of
governing and controlling any
wrongful activity performed by a
person that has been resulted in
providing harm to a whole community
or the society as a whole.
Punishments As per the rules mentioned in the civil
laws, the amount of punishment
depends upon the seriousness of the
injury suffered by a person. Generally
reliefs and remedies are being
provided in financial terms.
Generally, in the criminal cases. the
defaulter party is given a punishment
of either imprisonment and
incarceration as well.
Legal solution Civil case case be solved either within
the premises of court or outside the
court through any of the arbitration
method.
As per the English legal system, the
criminal cases are to be resolved
through the proceedings of court.
Case laws:
Applications:
By analysing the above case study and applying above mentioned rules and regulations
regarding civil and criminal laws of the country, it can be evaluated that, Andrew was having a
duty of care while driving the car towards each person present on the road. Andrew has breached
his duty of care by meeting the accident and injuring the Bianca, a pedestrian. Further, by
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analysing the rules regarding negligence of civil laws, it can be analysed that the activity the
accidental activity of Andrew can also be covered under the rules relating to the negligence.
Further, as the accident has been resulted in suffering loss and injury by Brainace and not
any community or the society. In this regard, in the present case, rules and legal aspects relating
to the civil liability would be applicable. In addition, by analysing the rules relating to the
compensation in civil cases, it can be evaluated that the amount of damage paid by Andrew or
the penalty to be imposed on Andrew due to his activity would be dependent on the amount of
loss and seriousness of the injury suffered by Bianca.
Conclusion:
Through the analysis of various legal asoects of civil laws of UK, pre decided case and
their application on the present case scenario, it can be concluded that the Andrew has breached
his duty of care and also neglected his liability provided by the legal system of UK towards other
persons.
Further, By applying the rules relating to the compensation in civil laws on the present
case scenario, it can be concluded that the Andrew will be liable to pay loss suffered by the
Braince due to his inability to attend the office for several weeks. In addition, the Andrew will
also be liable to pay damages regarding medical bills paid by Bianca for recovering from the
injury caused to him.
In addition, if the accident caused to the death or any sever disease like permanent
disablement, criminal laws would be applicable on the present case scenario. It would result in
either imprisonment of Andrew or any equivalent punishment to him.
2. Explaining the basic legal principals related to contract and terms for various business
activities
As per the contract law no contract can come into existence unless there following
conditions are fulfilled:
 An offer,
 an acceptance,
 Consideration,
 intention to create legal relation.
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For making a valid contract there is a requirement of a valid agreement first which is made by a
valid offer and acceptance. In the present section a discussion related with presence of an
agreement between Carol and David is being discussed with the help of laws and principles.
The offer:
This may be defined as a clear statement of the terms on which one party (the offeror) is
pre-pared to do business with another party (the offeree). An offer may be bilateral or unilateral
(Smits, 2017). A legally binding offer includes clearly stated terms, intention to do business and
communication of the intention.
Invitation to treat:
An invitation to treat is different from an offer. It is an advertisement to sale goods or
services. But when the advert upon fulfilment of certain specific condition and completion of the
same a unilateral contract is formed. Most advertisements for the sale of goods, land or services
are not usually treated by the courts as indicating the necessary intention to form an offer. Such
statements invite potential customers to make an offer. It is then up to the business proprietor to
decide whether or not to accept. Without acceptance, no contract exists; therefore, buyers have
no rights to the goods, etc. they want to purchase. For invitation to treat the offer is made by the
person who see the advertisement to the person who have published it. It is on the part of
advertiser to accept the offer or not.
Counter offer:
Generally the offeree makes a counter offer by making new offer and this is done to get a
more favourable term such a price reduction. This lead to termination of the actual offer made by
the offeror. The offeree checks the grounds of further negotiation while making a counter offer
and this does not destroy the original offer.
The Acceptance:
The acceptance of the offer is when the offeree agrees to be bound by all the terms of the
offer. To be legally bounding the acceptance it must be the mirror image of the offer, it must be
firm and communicated to the offeror. The acceptance is not complete utile the patties agree to
same terms of the contract. When there is serious of counter offer going own it is referred as
negotiation where parties are trying to reach to same terms of the contract (Knapp et.al., 2019).
The acceptance of the offer can be made in various forms which includes communication
through conduct, verbal acceptance, electronic and postal communication of the acceptance.
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Case law:
Harvey v Facey (1893)
The claimants were interested in buying land which the defendant had not advertised for
sale. They sent
a telegram asking the defendant to state the lowest price he would accept. When the defendant
replied
with a mere statement of price, the claimants attempted to accept. It was held for this case there
is no contract had been formed, since the statement of price was merely an early step in
negotiations and did not amount to a valid offer.
This can be stated that for formation of a valid contract first a valid agreement is required
to be made and which requires two elements that is a valid offer and acceptance. Offer is made
and both parties enter into a negotiation which the counter offer made by the offeree to the
offerer. Both parties must agree to same terms of contract and it must be duly communicated to
by both parties to each other to forma a valid contract. In absence of any of these elements of
valid offer and communication of the acceptance an agreement can not say to come into
existence.
For the given case of Carol and David it can be seen that an advert is placed by Carol to
sale a bicycle for £200. It was seen be David ad he made an offer to purchase it at £150 which
was refuse by Carol (Stone and Devenney, 2017). It was duly communicated to David as both of
them could not reach to same terms there did not form a valid agreement between them.
Carol did not get any other offers to buy the bicycle and now she made an offer to David
to sale it for £150. The offer is clear and duly communicated to David. Upon this David made a
counter offer to purchasing the bicycle at £120. For this counter offer there is no reply yet has
been made by Carol. So it can be stated that parties are under negotiation phase of contract
before entering not a valid agreement. This can also be started with the decided case of Harvey v
Facey where a valid contract was not said to made as the statement of price was merely an early
step in negotiations and did not amount to a valid offer.
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3. Explaining the legal models for conducting a business and activities along with their
advantages and disadvantages
Edvard, Farah and Georgi are presented with different options of opening a pizza
business at festivals along with their advantages and disadvantage of each option of staring and
conducting a business:
Limited liability partnership (LLP):
A LLP is a business which is formed and started by two or more persons as a partnership
business under a single business name. All the parers are required to bring a part of capital for
the business and they share ownership of the business in the proportion decide among themselves
or in the ratio of their capital sharing. The partners have a responsibility to conduct the business
and share all the task and activities as per their skills and talent (Roberts, 2018). The partners
share the business as well as liable for equal parts of the partnership business. There are no issues
of shares in this type of business and the liability of all the partner is limited except for one of the
partner. Under a LLP business one partner's liability is limited to pay of the debt of the
partnership business, apart from this no other partner is responsible to pay of the debt of business
from their personal property.
Advantages:
The main advantage of a LLP business is that the liability of all the partners is limited
except for 1. Also there is no requirement to pay taxes over the business profits. So there is no
need to get the business registered and take a GST registration for selling goods and
commodities under business name.
Disadvantages:
The disadvantages associated with a LLP business is that the one partner's liability is
unlimited and that partner is required to pay of business debt out of personal property. This
means the burden is on only person. Moreover, all the parters are required to pay income tax
over the profits earned from the LLP business.
Limited liability company (LLC):
A LLC business is the one which can be owned by individuals, trust and other
corporations. This is similar to a limited partnership business which have a structure provide it a
feature of corporation and tax efficiency and flexibility of a partnership (Goffee and Scase,
2015). A LLC enjoys the features of both corporation and a partnership. The owners of a LLC
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are not taxed as a separate legal entity rather profits and losses are passed through each members
of the business. The liability of the members is limited and they do not have personal liability for
obligation of LLC. An LLC is not a corporation rather it is a legal form of company which
provides a protection to the members along with limited liability.
Advantages: of LLC can be outlined as it have flexibility of being taxed as a proprietor
or partnership. To start this business the legal requirement are less includes lesser paper work
and cost of filing the registration of business. A LLC can be formed with one person only and it
can have unlimited number of members.
Disadvantage: of LLC are that as member of this business one cannot pay wages to
themselves. The renewal fees is vert high and publications are also pricey. The investors may
more likely to put their money into a corporation and this makes harder for LLC to raise funds.
Many states have a franchise or capital values tax on LLC’s, ranging from a flat fee to an amount
based on the company’s revenue. The ownership of the business is shared among the member so
larger the number of members the smaller share in the business.
Corporation:
A corporation a business entity which is taxed in a certain way. A corporation upon its
incorporation becomes a separate legal entity which have a distinct identity from its members,
shareholders and directors (Hatfield, 2015). The liability of all the member is limited in
corporation and they are not required to contribute from their personal property and asset
towards the debt of company. With forming a corporation the business becomes a legal person
which can be sues and have a right to sue other under the business name so the owners are
protection from personal legal actions. The formation of business is cumbersome and time taking
and it required higher cost of incorporation. It includes higher deal of scrutiny and the members
can be held liable for their actions at higher levels.
Advantages: of forming a corporation can be outlined as the liability of the owners
becomes limited and they are liable to corporation to the extent of their investment in
corporation. All the profits and losses belongs to the corporation only (Four Major Business
Formation Types, 2019) . Transferring the business to new owners is very easy and the personal
assets of members can not be sized to pay the business debts.
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Disadvantage: of formulating a corporation are that conducting the business is costly as
well as it establishment is also pricey. Along with this to start a corporation business requires
lots of legal requirement and includes complex paper work. All the profits earned by a
corporation ire taxed at the rate of corporation tax rate of thee nation.
4. Explaining the legal procedure airing in the context of business issues over employment status
The employment status of a person working depends on the working terms and condition
with the employer. Also, it is defined with the level of control and supervision exercised by the
employer over the person under the work. For the given case of Luciana first the meaning and
definition of set employed and employee will be defined and then an employment checklist will
be presented in order to determine the employment status of Luciana in the Fenchester
University.
Employee:
An employee is that person who works for a single employer at one time and do not
engage in any other employment. An employee is hired by employer to do a specific job through
interviews and section process of a particular organisation (Todolí-Signes, 2017). For an
employee have an employment contract with the organisation he/she working for and all the
terms and conditions are defined in the contract and are told to them verbally as well at the time
of appointment. For an employee the working hours are definite and they get employment
benefits including compensation, bonus, overtime wage, pension, holiday and sick leaves, and
others. Most of the employees who works in service and products creating roles have a narrow
range of potential salary offer since their jobs are defined with a salary range and benefits in
mind.
Self employed:
A self employed individual is the one who do not work for a specific employer form
whom they receive a consistent salary or wages. A self employed person or an independent
contractor earns income by contracting with a trade or business directly. The employer of these
types of workers do not hold back the taxes and it is the duty of independent contractor to pay
the taxes on earnings (What Does it Mean to Be Self-Employed?, 2019). The self employed
individuals can work for more than one employer and they contact he clients directly to for work,
they do not receive any employment benefits such as health, sick leave, holidays, pensions,
workmen compensation and others. The independent contractors are businesses or individuals
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who are hired to do specific jobs and they receive payment for the job or work done by them. A
self-employed person must file annual taxes and pay estimated quarterly tax. On top of income
tax, they are also, typically, required to pay a self-employment tax of 15.3%.
Factors Self- Employed Employee
Personal services Independent contractor
provide their own services and
can let the work sun contracted
to others as well.
They provide their own
personal services to the
employer.
Mutual obligation They are free to turn down any
work if they desire. They agree
to work under n obligation.
The employer is obliged to
offer the work and the
employee is required to work
given to him/her by employer.
Control and supervision They work as per their own
terms and condition with
keeping consistency with the
person contractee.
The work of employee is
controlled by the employer as
to how, when and what needs
to be one by employee
(Employee, 2019). Employer
supervise the work done by
employee.
Right to substitute other May sub contract the work or
even hire someone else to do
the work for which contract is
taken.
The employee do not have a
right to hire anyone in his/her
place or substitute other.
Number of employer Can contract from more that
one employer
Can work under the
employment of a single
employer or organisation.
Employment benefits They are not entitled to any
kind of benefits (Van Stel and
de Vries, 2015).
They enjoy all employment
benefits including, pension,
workmen compensation, leave,
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holiday and sick pays,
redundancy benefits and
others.
Right to terminate If other party is under a breach
a self contractor can terminate
the contract.
The notice is served under the
specific contract term under
employment contract.
From the above discussion it can be seen that Luciana is working for more than one
employer and she is not Working under a permanent employment with a single university. The
payment received by her are not as a salary and also payment are not on periodic basis. She is
being paid at the hourly basis for the hours of lectures taken by her in university. Also, she is
also given a right to substitute some one else in her place when she is unable to take a lecture. In
her place her wife Julia takes the lectures for which the university have given a due permission.
With this it can be stated that Luciana is a self employed or an independent contractor and she
can not be classified as an employee of the Fenchester University. The employment status of
Luciana is determined on the basis of checklist mentioned above and the factors are seen that she
is not under employment of a single employer, she has a right of substitution in place of her, she
do no enjoy ant employee benefits and that she does not get paid a monthly salary or wages.
CONCLUSION
By analysing the above study it can be concluded that negligence of civil liability that has
resulted in suffering injury or damages to another party, would lead in paying damages against to
the injured party. There are various types of business forms through which an organisation can
be operated for example, limited liability partnership, limited liability corporations, sole traders,
etc. Further, for the purpose of creating a valid contract, an agreement needs to comply with
several requirements such as offer, acceptance, consideration, etc. On the basis of this, it has
been concluded that there is no valid contract between Carol and David as the terms of contract
are under negotiation phase.
Further, the study has also concluded that as per the rules of employment law, for the
purpose of being an employee, various requirements are needed to be fulfilled. If the
employment contract between employer and employee does not comply with all the conditions,
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the employee is considered as a self employee. In this regard, it has been concluded that Luciana
is not an employee of Fenchester university rather she is independent contractor for university as
she fulfilled the condition of being self employed instead of employee.
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