Legal Aspects of Business: Contractual Agreements, Authority, and Law

This report delves into the legal aspects of business, examining contracts, authority, and termination. It begins with an introduction to the legal framework governing business entities and then proceeds to analyze different types of authority, including express actual authority, express implied authority, and usual authority. The report further explores business contracts, covering essential elements such as offer, acceptance, and mutual consideration. It discusses various contract types, including partnership agreements, indemnity agreements, and non-disclosure agreements, and their significance in securing business interests. The report also addresses contract termination, outlining different methods such as rescission, completion, prior agreement, breach of contract, and impossibility of performance, along with their legal consequences. Finally, the report emphasizes the importance of understanding these legal aspects for effective business operations and risk management.

Legal aspects of
business

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................3
CONCLUSION................................................................................................................................6
REFERENCES ...............................................................................................................................7

INTRODUCTION
All business entities are categorised by the different laws under which they hold their
activities and functions. When starting up nay new contract and agreement with the parties, there
must have presence of legal aspects. Besides this, for every business, law is very necessary to
influence company in the future. Present report is based on legal aspects of business. Current
case will be based on legal contracts and their code of conduct. This makes legal companionship
between parties. Furthermore, it will discuss: express actual authority, express implied authority
and usual authority. In further section, it will look upon the definition and incorporation of terms,
confidentiality, penalty clauses, termination of contract and applicable law.
TASK 1
Actual authority
Actual authority is of two types: express or implied. It depended on the principle whether
it given express or implied to the respective agent authority.
Express actual authority
Express authority and apparent authority are quite independent of one another. It is
important to measure that whether it is Principle intended to give actual authority. Explicit actual
authority is given by the written form (Balwicki and et.al., 2015). In according to the case where
agreement has been held between principle, agent and third party. In accordance to the business
legal case agency done agreement. On that basis, they approve that Agent humble was appointed
license of a hotel by the principle that he could not purchase cigars on credit. Written actual
agreement and contract is very necessary to secure the contract by illegal circumstances. In the
case express actual authority. Parties may contract in oral or written form, this contract has been
done usually between tripartite. Agent plays a very important in commercial activity. All
transaction has been done by the agents. Like, according to the case, Humble is an agent who
tackles the overall case and needs to resolve the issues between the parties. Express actual
authority must be covered by the law (Buhmann, 2017). Principle only sue to another party if
they having any proof to confirm that contract have been made in the past. In case of any oral
form of contract, they fail to prove wrong to another party. It is the responsibility of the agent to
disclose all required information which is necessary for both the parties. Principle is responsible
for providing all specific information in the document required to carry out transaction. Another
responsibility of the Humble is to disclose all requirements and terms and conditions in between
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the contract. Due to oral form of actual contract, party cannot sue another party on the basis of
only claim (Burnett, 2016). In case of fraud agents, they may conduct false behaviour with the
principle.
Express implied authority
Implied authority is the authority which is binding the individual contract with law. It
makes some legal implication on both the parties in order to maintain the uniformity within
contract. This authority helps to make the safe and secure environment within the parties.
Implied authority is expressed in the form of express or written into the contract. It gives
effective performance that helps to make the effective working performance between the parties.
It also helps to make the effective contract between all three parties. All parties have limited
liability and responsible to share everything with each other. In within in case of any negligence
principle may sue to another party. For example, in case with Fenwick where they restrict the
uncertainties and risk. Implied authority creates legal obligation within the parties for the sack to
protect the contract with uncertainties (Cohen-Rosenthal and Musnikow, eds., 2017). In case of
any misconception, default party will be liable to pay loss. According to the case, agent did
purchase cigars on credit after restriction When seller get to know that he was in an agency
agreement they claim to take the money of cigars. This makes the effective presence of effective.
If in case of any breach of contract in that situation, Fenwick is liable to face high losses because
of breach of contract due to excluding his liability. Implied contract between parties are created
implied warranty provided automatically by law. The main purpose of the contract must be
fulfilled by the parties in order to make the effective process of working. It creates obligation in
terms of effective process of working, in case of any unfairly enriched by in order to make the
best effective process of working. In this case another party can easily take cation against fraud
party. It makes good appearance interns of party and for the contract as well (Eleftheriadis and
et.al., 2016). Like as per the given case where Fenwick make contract breach any purchase
cigars on credit basis. In that situation they liable to pay the credit amount to the sellers back.
These kinds of contract are also known as quasi contract. In these kinds of contract party will not
make any promise to each other when they entered to the contract.
Usual authority
This is the authority which is not an implied or express authority, this authority generally
act with agents of that character (Ghanavati and Hulstijn, 2015). It is the authority to do whatever
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an agent to the type in question to do. It depends that third party is reasonable or not. In this kind
of authority in its own rights and laws. In this part parties entitled to assume the agent holding
some responsibility (Ha, 2017).
On the basis of above types of authority where parties make contract weather in written
form or oral form. Oral form of contract may gives adverse effect in future due to negligence of
any of party. Due to which individuals are less responsible to take any charge against fraud party.
In terms of implied authority where legal regulations are implied on both the parties in some
short of manner. This authority creates legal obligations among parties. On the other side,
implied may also gives negative impact in case of breach of contract when one party fails to
disclose some important aspects of the contract.
TASK 2
Business Contract: dealing with parties and making agreements is the part of the
business activities (Mironov, 2015). Every contract having some objectives and purpose for
which business make contract in terms of entering into any legal obligations. In order to make
contract party needs to follows all essential business contracts such as offer acceptance and
mutual concern, specific decided consideration, competence, legal purpose etc. these all are the
essential element of contract which needs to be fulfilled. Business make many contracts with
customers, employees, shareholders, suppliers etc. this helps to make the different changes which
gives losses to the party. Business contract provides different facilities to the party as well.
There are different types of contracts which discovers new obligations and code of
practise to secure the contract from void. Business make number of contract in day to day life,
with partners, with suppliers or with employees as well. Through which business can easily
protect there stakeholders. Contract creates legal obligations on the parties and create some roles
and duties in order to perform that contract (Mitten and et.al., 2015). There are some types of
general business contract as per the case:
 Partnership agreements: partnership contract has been make between two or more than
to individuals for specific period or for specific purpose. This defines the relationship
between partners and roles and responsibilities in order to contribute in business
activities.
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 Indemnity agreements: it is the another business contract in which one individual
agrees to indemnify for another person for damages. This contract protects business from
future uncertainties (Peracek, Mittelman and Strazovska, 2016).
 Nod disclosure agreement: this contract make to secure the company data from
outsiders. Business makes this contract with employees, suppliers, vendor.
 Property and equipment lease: This contract act spell out the terms and conditions of a
lease for a building or piece of equipment. This contract main purpose is to secure the
property and machineries.
Partnership Contract
Partnership contract is the common agreements in the business. Partnership agreements is
a contract between business partners that defines the rules and duties of the agreements. This
contract defines how partners will handle the business activities in future times. Partnership
contract in which all partners divides equal profit and loss area as per the capital investment. It is
necessary to invest equal capital in the business activities (Quill, 2018). There are some steps in
partnership documents which is necessary to adopt.
 Partnership name
 Purpose
 partner information
 Ownership interest
 profit/loss distribution
 Management and voting
 Partner addition and withdrawal
 Partnership dissolution
Penalty clause of partnership Act
Every partner has liable or honest with each other, along with that every partner must be
agree on every decision making approach of the company (Roberts, 2017). In case of any fault
and misconduct by the partners they have to face many challenges. Partners has to face
challenges and issues in case of any breach of contract between the party. Along with that, this
must be according to the changes and effective purpose of required changes. In case of any
misconduct in the business partners liable to pay their own debt by itself. In terms of partners
liability, in partnership contract all partner having equal rights and liabilities as per the law. If
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any case do mistakes or fraud they are own liable for their fault (Vagts, Koh, Dodge and
Buxbaum, 2015). This gives assurance to other parties that the contract has been secure from
legal obligations. Such as every partner liable maintain security of information, keep finances in
order, paying taxes of business, adopt all duties and responsibility, take initiatives in decision
making approach. Partners must be faithful among each other, it is beneficial for the organisation
in order to accomplish the target in effective manner. Moreover, partnership is the common
contract of business which creates equal profit and loss in the business. It is the most important
contract between all parties (Quill, 2018).
Termination of contract
In case of any impossibility of performance contract may get terminate. On the other
hand party may fails to adopt their duties in the contract. In that case contract become void and
invalid. Party terminate contract through many ways such as ignorance, breach of contract, prior
agreements, rescission of the contract, completion of the contract, this may gives negative impact
on the results of contract. Termination of contract is considered to be lawful
Rescission of the contract: this is the type of termination of contract in which individual
person did wrong activity on the behalf of full contract. Besides, individual misrepresented
themselves due to which contract become terminate (Ghanavati and Hulstijn, 2015).
Completion of the contract: Termination of contract also terminated after completion of
object of the contract. Party needs to keep the documentation to show that contract has been
fulfilled.
Prior agreement: prior agreement is the another type of termination of contract in which
both the parties make mutual decision to terminate the contract. Both the party having some
evidence for termination.
Breach of contract: it is the another form of termination of contract in which
intentionally honoured by one party which become breach of contract. Breach of contract has
been done in which one party failed to meet his obligation at certain level of time.
Impossibility of performance: in the contract all party require performing his work in
proper manner. If any of the party fails to perform his task contract become terminated
automatically. In this case innocent party has right to claim on another party (Eleftheriadis and
et.al., 2016).
What impact when contract is terminated
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Contract termination may give legal consequences, which parties needs to face. In some
cases, contract terminate with simple form and on the other hand contract become terminate
intentionally. Termination of contract gives heavy losses to the parties. Or may party can make
another contract in future with the help of mutual desire. It helps to accomplish the objective and
consideration (Cohen-Rosenthal and Musnikow, eds., 2017). On the other, sometimes party will
take fraud party into the court in case of heavy losses.
Applicable law
Each state and territory of UK has a partnership act. All kinds of business contract
applicable in UK. Every business adopt partnership contract act when the make agreement with
the partners for specific purpose. It is the necessary contract between parties which gives legal
obligations or rights on the all parties (Burnett, 2016). This act may dome between two or more
than two parties. In which all partners mutually share equal rights and duties between them.
CONCLUSION
From the basis of above section it can be concluded that legal aspects are very necessary
for the organisation or business to maintain the legal secure environment. Business law creates
legal implications and obligation for the parties. Legal consideration protects contract from
uncertainties. Preset report based on the case between Fenwick and Watteau in which they adopt
agent in order to resolve the issues. In which Watteau sue Fenwick due to purchase cigar on
credit bases. This contract of law become breach due to negligence of Fenwick. In further next
part in which report discussed about the business contract of partnership in which they explained
the definition and legal clauses of partnership. Apart from that, they also discuss about the
termination of breach of contract and their reasons as well. On the basis of present study. All
businesses need to adopt legal contract in terms to secure the future uncertainties. This helps
party to secure their own interest.
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REFERENCES
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Buhmann, K., 2017. Business and Human Rights: Connecting the Managerial and Legal Aspects.
Burnett, R., 2016. Outsourcing IT-the legal aspects: Planning, contracting, managing and the
law. Routledge.
Cohen-Rosenthal, E. and Musnikow, J. eds., 2017. Eco-industrial strategies: unleashing synergy
between economic development and the environment. Routledge.
Eleftheriadis, P. and et.al., 2016. Legal aspects of withdrawal from the EU: A briefing note.
Ghanavati, S. and Hulstijn, J., 2015, May. Impact of legal interpretation on business process
compliance. In Proceedings of the First International Workshop on TEchnical and LEgal
aspects of data pRIvacy (pp. 26-31). IEEE Press.
Ha, H. T. H., 2017. Legal aspects of pension product-review of the client's rights and tax
incentives related to voluntary pension insurance business.
Mironov, S. M., 2015. Municipal-private partnership as a tool of community development:
financial and legal aspects of the Business. Education. Law. Bulletin of Volgograd
Business Institute. (4). p.33.
Mitten, M. J., and et.al., 2015. Eligibility and disqualification recommendations for competitive
athletes with cardiovascular abnormalities: task force 15: legal aspects of medical
eligibility and disqualification recommendations: a scientific statement from the American
Heart Association and American College of Cardiology. Circulation. 132(22). pp.e346-
e349.
Peracek, T., Mittelman, A. and Strazovska, L., 2016. THE LEGAL ASPECTS OF
ADVERTISING IN THE SLOVAK REPUBLIC WITH THE SPECIAL FOCUS ON THE
PROMOTION OF CHOSEN PRODUCTS. Economic and Social Development: Book of
Proceedings, p.181.
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Quill, T.E., 2018. Voluntarily Stopping Eating and Drinking Among Patients With Serious
Advanced Illness—Clinical, Ethical, and Legal Aspects. JAMA internal medicine. 178(1).
pp.123-127.
Roberts, P., 2017. Peter D. Cameron and Raphael J. Heffron, Legal Aspects of EU Energy
Regulation: The Consolidation of Energy Law Across Europe.
Vagts, D. F., Koh, H., Dodge, W. S. and Buxbaum, H.L., 2015. Transnational business
problems. West Academic.
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