Negotiation, Mediation, and Litigation Strategies

This assignment delves into the complexities of negotiation, mediation, and litigation in resolving business disputes. It presents three scenarios (Annie vs Otis, Raj vs Gladys) where negotiation, mediation, or litigation are applied as strategies for conflict resolution. The importance of choosing the right approach depending on the situation is highlighted, with factors such as cost, time, fairness, and potential outcomes considered. A summary of key points related to each scenario is provided, along with references to relevant legislation and court cases.

Name: Bui Khanh Linh
Class: F12D
Student ID: F12-081
Table of Contents
I. Unincorporated business.......................................................................................................2
1. Sole trader:..........................................................................................................................2
2. Partnership:.........................................................................................................................3
II. Incorporated business........................................................................................................6
III. Legal structure..................................................................................................................12
IV. Duties of director..............................................................................................................12
V. Evaluation formation of sole trader. partnership, private and public company...........12
VI. Critical evaluate................................................................................................................14
VII. Business problem..............................................................................................................14
Reference:.....................................................................................................................................21
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I. Unincorporated business
Unincorporated business related to organizations that not separate of legal identity from the
owners. The owners are bear all of the liability of the business. There are two types of
unincorporated business which are sole trader (sole proprietorship) and partnership (Australian
Government, 2010). The owner of unincorporated busines is personally liable with the liabilities
of the business. As long as the owner live, the unincorporated business still exist.
1. Sole trader:
Definition: Sole trader is a type business that is own and manage by an individual. The owner of
sole trader responsible for all the profit and loss of his or her own business.
Characteristic:
- Single ownership: the business is owned by one person. He or she personally contribute
a whole capital for his or her own business
- Personally control: The owner wholly control of the business. He or she may ask
someone for advice but the decision-making right belongs to the owner.
- No legal entity: There is no separation between the legal entity and the owner of the
business. In case the owner is passed away or incapable of insolvency, the business is
considered to be dissolved.
- Unlimited liability: The owner must responsible for all the debt incurred during business
operation. If the asset is not enough to pay for the debt, the owner has to use personal
property to pay for it.
- Personally own profit and losses: The sole trader personally bear all the profit as well
as losses of the business
- Small scope: As the sole trader has limited source of fund then the operational scope is
limited
- Legal formation is unnecessary: Legal formalities in terms of establishing, management
and dissolve is not require
Formation
- General requirement: It is required to inform the HMRC in order to pay tax through
self-assessment. Therefore, sole trader have to filling the tax return annually.
- Responsibility: 'Sole trader have to register for the National Insurance number if the
business is operated in the UK
+ Sole trader must keep all the business records in terms of sales and expenditure
+ Filling the tax return through Self-assessment yearly
+ Paying the personal income tax based on the profit as well as national insurance in
terms of class 2 and 4
+ It is required that in case the revenue of sole trader exceed £85,000. Sole trader can also
register for VAT voluntarily if it is appropriate with his or her business
+ In case the business related to construction industry, sole trader have to register with
the HMRC for CIS (Construction Industry Scheme)
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- Business name: Sole trader can use his or her own name to name the business and it do
not have to be registered. The name the owner as well as the business must be consisted
in paperwork related to the business
+ The name of sole trader must not contain the terms ‘limited’, ‘Ltd’, ‘limited liability
partnership’, ‘LLP’, ‘public limited company’ or ‘plc’. Also, the name must not be
insulting and as same as the already existed business name. Moreover, the name should
not include sensitive terms or any related to government or local authorities unless there
is permission
Management:
- It is unnecessary for sole trader to answer any questions from board of directors or
business partner
- As sole trader personally own the business, there is no need to form any regulations or
agreement between partners with the purpose of management and operation
- The owner can decide how to run on his or her own business without any involvement
Source of funds
Equity capital Debt capital
- Owner’s money: the owner can contribute to the
business’s equity by his or her own money
- Retained earnings from reinvestment: Profits are
created in the previous trading year and its able to
cover all the daily expense of the sole trader
- Sales of inventory and assets: This source of
fund not only can attract customers but also
release the inventory
- Money borrowed from relatives and friends:
these are common source of fund for sole
trader’s business
- Sponsor from credit card: Credit cards funds
through cash in advance or covering expense
- Bank loans: The owner is required to have
collateral or personal property so as to ensure the
debt
- Grants: It is unnecessary for sole trader to pay
back this source
- Trade credit financing: the sole trader can
receive this fund whenever he or she need but it
requires deadline of repayment.
2. Partnership:
Definition and characteristic
Partnership refers to organizations run by two or more people and share the income with each
other. Partners can represent for each other during the business operation and each individual
personally responsible for the company’s liability.
Characteristic:
Membership: the range of member is from 2 to 100 including individuals must have full
legal compacity to become partner, except people with mental disorder or mental problem,
people under 18 and people do not have the ability to pay for the debt.
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Unlimited liability: All the members are collectively and individually for all the debts of the
business. They have to use their personal property and asset to pay for the liability in case the
asset of the company is not enough to pay for the debt.
Sharing of profit and loss Profits and losses are divided proportionally based on agreement
between members. In case any terms in the contract is broken, the profit as well as losses is
divided equally
Mutual agency All the partners are represent for the company. Each of their action is binding
the company as well as each other.
Voluntary registration The registration to become a member of the partnership is not
mandatory but is recommended. One of the benefits is that it is possible to sue to the court in
case there is a dispute incur internal or external of the company
Continually Partnerships may dissolve upon partners death, bankruptcy or retirement. Or
else, the remain partners could continue the operations by making new agreement.
Contractual relationship It is possible to establish and maintain the relationship between
members by contract
Trader of interest Partners must be given unanimous is there is any transfer of interest
between each other.
Types of partnership
Partnerships can be divided into 2 types which are general partnership and limited
partnership which are general partnership and limited partnership. On the one hand,
general partnership means that all the members are partners, equally unlimited
responsible obligated to the company, and equally sharing profits as well as losses. On
the other hand, limited partnership composes of not only one general partner responsible
for running business operations but also one or more members who do not participate in
business activities and do not have any legal binding.
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Partnership
General
partnership
Limited
partnership
Limited
partnership
Limited
liability
partnership

Management of partnership
General Partnership: There is an equality in the responsibility between partners in managing
the business as well as profit and losses and the legal decision. Moreover, partner can represent
for the company in making decision.
Limited Partnership and Limited Liability Partnership
In terms of limited partnership, partners had unlimited liability with all decision, managing as
well as profit and losses of the company
In terms of limited liability partnership, unlike the limited partnership, partners do not have to
not only take responsible for profit and losses of the firm but also enter in the decision-making of
the business.
Setting up a business partnership
General requirements
Establish an agreement between partners to divided equally responsibility in terms of assets
as well as profits and losses. Moreover, they have to responsible for tax paying for their
shares as well as sharing profit with each other base on agreements. In addition, it is possible
that not only an actual person but also organizations or companies can become partners.
Steps to setting up business:
The first step is deciding the company’s name. In detailed, it is illegal if the name is identical
with the name of the previous companies because of the intellectual property right. The
second step is choosing the representator of the company or a nominated partner with the
purpose of managing tax returns as well as recoding business reference. The last step is
registering the company’s name to the HMRC (Her Majesty Revenue and Customs) to pay
tax later.
Deed of partnership (Article of partnership)
Partnership is an association from 2 to 20 partners. There has to be an agreement about
responsibilities as well as rights of partners (normally known as Deed of Partnership or The
Article of Partnership). Moreover, they must take responsibilities for all the debt of the
partnership.
Source of finance:
Equity Loan
- Savings, stocks and bonds:
- Funds from your personal circle of
family, friends and acquaintances
- Retirement account funds
- Business grant
- Business loan
- Venture capital funding from
investors
- Crowdfunding
II. Incorporated business
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A company refers to a registered organization that is established by an artificial legal person
or a group of artificial legal persons with the purpose of implementing business activities. In
case the business out of funds, the owners are not required to use personal property to pay for
it. The life cycle of incorporated businesses is not tie with the life of the owners. In other
words, the life of the business could be long-lasting. The incorporated business consists of
private limited company and public limited company.
1. Characteristic
Incorporated association: register limited liability of each shareholder
Separate legal entity: There is separation in terms of responsibility between shareholders and
the company. This means that the company does not have to liable with the actions of its
members.
Limited liability: The liability of the members is limited within the amount that they
contributed
Perpetual succession: As the life of the company is not stick with the life of the owner, the
change of shareholders or lack of solvency does not affect the life span of the incorporated
business.
Common seal: Every company should have a common seal which represent for a natural
person
Transferability of shares: The shares can be transferred by the shareholders in the stock
exchange market
Separate property: The personally property of owners of shareholders are separated from
company’s property
Capacity to sue and be sued: A company is able to sue and be sue by a third party
Artificial person: The owner of the company can be a person that is recognized by the law as
a legal artificial person.
Separation of ownership from management: The Board of Director is selected by its
members. However, members cannot involve in the management of daily affairs
2. Differentiate public and private company
Public company Private company
Definition Listed in stock market, sale
share in stock exchange
market which attract more
investors
Only selling shares to
willing investors
Traded on Trade on stock exchange Traded by few investors
Regulations More heavily regulated by
the stock exchange
regulations the because
Unless the revenue of the
company does not exceed
100 million USD as well as
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listed in stock market. 500 shareholders, it does not
have to follow the
regulations by SEC
Advantages Have responsibility of public
the financial report for
potential investors
Having the rights of
refusing to disclose any
information related to the
company’s financial report
Size Public companies are big
companies
Private companies can be
big companies
Source of funds Money from selling shares
and bonds
Private investors and
venture capital.
3. Setting up limited company
a. Checking if the type of business is appropriate to form a limited company
How the business pay tax and be funded based on what kind of business is it.
b. Choosing the name of the company
It is impossible that the chosen name is similar to the one of previous companies. Also, the
name must be ended by ‘Limited’ or ‘Ltd’
c. Choosing directors, a secretary as well as guarantors, shareholders and SPCs
The company must have at least one director but it is unnecessary to have a secretary. To be
specify, the director of a company can be a shareholder or a guarantor. Moreover, the
company need to determine the SPCs who
- Owning more than 25% of the shares
- Having more than 25% of the voting rights
- Having the right of appointing or dismissing the majority of members in the board of
directors
d. Preparing documents related to agreement about business operation
It is necessary for companies to prepare both memorandum as well as article of association:
Memorandum of association
In case of online company registration, the memorandum can be created automatically. In
contrast, companies have to apply the available memorandum template.
It is impossible to have any correction or updating once the company is registered.
Article of association
Companies may either
- Using standard form
- Creating their own and send them when company registration
e. Checking documents to be kept
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According to the UK Government, companies must keep records about the company as well
as financial and accounting records.
Records about the company:
- Directors, shareholders and secretaires
- Results of voting and resolutions of shareholders
- Guarantee of debentures repayment with a specific of time and who to pay
- Guarantee of indemnifying
- Transactions of buying shares
- Loans and mortgages secured by company’s assets
- Register of SPCs
Accounting records
- Earnings and expenditures
- Assets owned by the company
- Debts that the company owe or is owed
- Company’s stocks by the end of fiscal year
- Purchasing and selling goods (including suppliers and buyers)
- The stocktaking you used to work out the stock figure
Financial records
- Receipts, petty cash records, orders and many others representing for the spending of the
company
- Invoices, till roll or sales book for the money received by the company
- Other relevant documents such as bank statement or correspondence.
f. Registering the company
First of all, it is compulsory to provide the official address of the company that have been
registered. In detailed, the address must be a real one and in the same nation as registered.
Next, the company need to choose the SIC (Standard industrial classification) code
describing the natural of its business.
After that, registering to the Companies House. The company can also register with HRMC
after register the company for any related tax.
4. Business operation of limited company
a. The responsibilities of Directors
- Following the regulations of the company
- Reserving company profile as well as documents of changes
- Filing accounts and tax return of the company
- Do not keep secret with other shareholders if the director can earn benefit from any
transactions made by the company
- Pay CIT
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The director can hire a person in charge of the activities listed above. However, the legal
responsible still belongs to the directors. In the case of the directors do not meet the
responsibilities then he or she might be fined, prosecuted or even dismissed.
b. Taking money out of a limited company
Salary, expenses and benefits
Only registered as an employer, it is possible for the company to pay salary, expenditure or
benefit for employees.
The salary payments include both income tax as well as National Insurance so it should be
taken out and pay for the HMRC along with National Insurance contributed by employees.
If anyone in the company uses the company’s belongings for personal purposes then it has to
be reported as a benefit and he or she must pay any tax due
Dividends
Dividend payment is not included in business cost when paying filing CIT.
Dividend must be paid for all shareholders. In order to pay dividend, it is a must to hold a
meeting with the purpose of dividend declaration. After the meeting, all the records must be
kept by the directors.
Tax on dividend
The company do not have to pay for taxes on dividend and it would not be levied on
shareholders unless it exceeds £2.000.
c. Directors’ loan
Directors’ loan incurred when directors or close family members withdraw the amount of
money from the company is higher than the amount of money invested.
Any payments or borrowings that related to directors’ loan must be kept in the director’s loan
account. At the end of the fiscal year of the company, the money that the directors owe the
company or vice versa will be on the balance sheet in the annual count of directors.
d. Changes of the company the needed to be recorded
Changing the company’s registered address
The requirement of changes must be reached to Companies House. If it is approved then
Companies House will inform the HMRC. The new registered address must be in the same
part of the UK as registered before.
Other changes
These changes needed to be informed to the HMRC:
- The directors’ business’ contact detail changes
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- Appointing a secretary or tax advisor
The following changes must be informed to the Companies House within 14 days:
- Where the records is and which records are kept
- Directors and their personal information
- SPCs or their personal information
- Company’s secretary
In case the company want to issue more share, it must be informed to the Companies House
within a month.
Changes approved by shareholders
It is necessary to have votes form shareholders if:
- Changing company’s name
- Dismissing a director
- Change the company’s article of association
Most of the resolution need the majority of shareholder to be passed. In some cases, special
resolution need 75% of agreement to be passed. The changes as well as resolution must be
reported to the Companies House.
Shareholder voting
The amount of share that a shareholder contributed decided whether he or she has the voting
right or not rather than the number of shareholders. The number of shareholders that attend to
the meeting is limited based on the amount of share that they contributed.
e. Company and Accounting records
The company must have responsibility of reserving the documents and records related to the
company itself as well as financial and accounting records (point e in the Steps to setting up a
company). Otherwise, the company can hire an accountant to help the company with taxes.
Moreover, the records must be kept carefully for the HMRC to check whether the company
pay the right amount of tax or not.
The records must be kept in 6 years from the end of the fiscal year of the company. In
contrast, it is possible to reserve the records more than 6 years unless:
- The transactions consists of two or more accounting periods of the company
- Purchasing an asset that it’s life span last more than 6 years
- Late tax return filing
- HMRC start to check the tax return compliance
In case of the records are lost or stolen, the company must inform to the Corporation Tax
office immediately and mention about this situation in the Company tax return.
f. Confirmation statement
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Companies need to check the information of the company registered to Companies House
annually to ensure its correct
Checking company’s information
- Information about register office, directors, secretary as well as the place where the
record is
- Information about the company’s capital statement and shareholders
- SIC code
- SPCs list
Reporting changes
It is possible to report changes in terms of information about capital statement and
shareholders as well as SIC. On the contrary, companies could not report changes using
confirmation statement as it should be filed separately with Companies House including
company’s officer, registered address, where the record is kept and SPCs.
Due dates
The deadline for confirmation statement will be sent through emails or letters to the office.
The due date often a year after the establishment of the company or the filling latest annual
return date. The statement confirmation can be filled exceeding 14 days after the deadline.
There would be penalties up to £5,000 and the company would be removed if there is no
confirmation.
g. Signs, stationery and promotional material
It is required to show the sign that is easy to read and recognize of the company at the office
or anywhere there is business operation of the company.
Besides that, the name of the company must be included in all the business records related to
the company. On the business letters, order forms as well as official website, it is the must to
perform:
- The registered number of the company
- Officially registered address
- The place that the company register in
- Limited company
- Directors’ list
- Shares (must include the amount of money that is paid up which is owned by
shareholders)
5. Source of finance
Debt Capital Equity Capital
- Bank loans
- Personal loans
- Bonds
- Selling shares of stock
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- Credit card debt
III. Legal structure
Sole trader Partnership Public companies Private companies
Liability Unlimited Unlimited Limited Limited
Life span Existence rely on
the existence of the
owner
Existence rely on the
existence of the
owner
Permanent Permanent
Registration HMRC HMRC Companies House Companies House
Tax liability PIT PIT CIT CIT
Legal entity There is no legal
person
There is no legal
person
Legal person Legal person
IV. Duties of director
Organizing: The director needs to divide the works equally and coherently among employees so
as to gain the goal of the company
Planning: The director has the responsibility of setting up the plan in order to evaluate the
internal as well as external environment, as a result, will be able to determine and develop
objectives, scope and field.
Controlling: The director needs to not only ensure that the business operation of the business is
stick to the plan but also set up principals, standards and policies for the business.
Commanding: As a leader of the company, the director responsible for managing, leading,
communicating and promoting the workforce in the most effective way so as to succeed in the
path to achieve the set goal.
Coordinating: The director can not only manage the business by his or her own but also hire an
expert or qualified manager with the purpose of controlling, supporting in business operation as
well as boosting up the willpower of the employees for the most working efficiency.
It is required that directors of 4 types of business which are sole trader, partnership, private
companies as well as public companies have to complete all of their duties. Clearly, they have to
fulfill the OPCCC (Organizing, Planning, Controlling, Commanding and Coordinating). The
obligation is separated equally between directors. Nevertheless, there is only one director in sole
trader while the others have more than one.
In addition, on the one hand, in terms of partnership, the responsibility of the director would be
decided based on the Deed of Partnership. On the other hand, like sole trader, directors of limited
companies have responsible to fulfill the OPCCC, however, they do not have to combine
personal property with business’s equity.
V. Evaluation formation of sole trader. partnership, private and public company
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Advantages Disadvantages
Sole trader - It is easy to establish and
inexpensively
- The sole trader only have to pay PIT
as the business income is already
income of the owner
- Establishing sole trader does not
required legal formalities
- Sole trader can combine personal
property with business’s asset
- The owner must responsible for all the debt,
liability as well as losses incur of the
business
- The owner is unable to call for capital by
selling interest of the business
- In case the owner of the business pass away
or the business is insolvent, the sole trader
hard to survive from this suffer.
Partnership - Establishing partnerships is not as
costly and as hard as that of
companies because the procedure is
not complicated
- As this kind of unincorporated
business consists of many partners so
this means that there would be many
resources as well as expertise
- Organizations and companies can
become partners
- This kind of unincorporated
partnership is easy to manage as
profits and losses are divided among
partners based on the agreement
between them
- Because partnerships may choose not
to publicize their profit and losses.
This means that the level of privacy
is higher than that of companies.
- All the members must take unlimited
responsibility or joint liable for all the debt
of the partnership. This means that besides
their liability, they have to obligated to
others’ when it incurs.
- As partners are taxable to personal income
tax (PIT), the more earnings the company
has, the higher amount of tax that they have
to pay.
- In some cases, incurred disagreements as
well as disputes between members might be
a barrier for business operation
- Because members in partnership are bind
with each other, it is impossible to transfer
ownership to some else outside the
partnership unless there are agreements of
other partners.
Limited
companies
(including
private and
public
companies)
- Tax efficient: Companies only have
to pay CIT with the tax rate of 19%
of the earned profit while sole trader
have to pay not only 20-45% PIT
based on their profits
- Pany Limited liability: While the
sole proprietorship has to take
responsible for all the business
activities, the director of the limited
company has limited liability.
- Separate entity: Limited company
business is separate from the director
while the sole trader and the owner
are one entity.
- Professional status: Limited
companies have the right to protect
the name that legally registered, any
- Complicated to set up: In order to set up a
limited company, the owner has to not only
register with the Companies House but also
pay for the company formation fee.
Meanwhile, the sole trader only register to
the HMRC to set up
- Complex accounts: The accounts of a
limited company is complicated as it
requires the directors hire an accountant for
helping with the tax filling, business
operation expense as well as update the
accounts
- Accountancy costs: As the director needs
to hire an accountant to deal with tax-
related problems, the accountancy fee incur
- Ownership: Shareholders have words in
limited company which means the level of
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companies must not use the same
name as in their own SIC code.
- Company pension: The director of
limited company could save much
expense on company’s pension
scheme by invest the pre-tax money
instead of taking the money out of
company’s budget and put in the
personal pension scheme which bear
both CIT and PIT.
- Maximizing tax-free income: In
case the director have spouses or
children that are shareholders, the
company would minimize the taxable
income.
the ownership depends on how much share
they contribute. In other words, the opinion
of the shareholders need to be considered
before decision making.
- Public records: As the limited company
businesses having been registered with the
HMRC, all the company’s records are
public and can be reached by everyone.
VI. Critical evaluate
For setting up the business, it is required that the firm should have good reputation, easy call for
investment as well as limited liability of owners.
Firstly, maintaining the reputation of the company good leads to attraction of potential investors.
This means that the owner of the business must ensure the financial documents in under
controlled along with prevent the situation of bad debt of losses. In addition, by registration to
Companies House, the company can legally become a limited company. Therefore, sole trader
and partnership is not appropriate for this condition as reputation is not their priority. In other
words, limited companies is the most fit for this aspect.
Secondly, there should be separation between the owner’s property and the asset of the business.
As a result, when there is losses incur, owners do not have to responsible fully as well as do not
have to use personal property to pay for it. Hence, it can be easily seen that both sole trader and
partnership do not meet this requirement. In another way, public and private company is the best
choice for this condition.
Lastly, one of the most important factors that any types of business should have which is
investment easy. To specify, companies can find investment or attract investor by joining in the
stock exchange. By this way, this would increase the funding as well as capital of the business.
Therefore, it can be said that public company meet this requirement.
In conclusion, establishing business needs to meet some essential requirements as mentioned
above in order to maintain the operation. Therefore, public company is the most appropriate
option that meet all of the requirements which means this type of business is highly
recommended to formed.
VII. Business problem
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Scenario 1: Kane v shopkeeper
Facts: Kane saw a clock in the store but the shopkeeper refused to sell it to Kane. Was the seller
bound to sell the clock to Kane?
IRAC analysis:
- Issue: Did the shopkeeper offer to sell the clock to Kane?
- Regulation: In this case, there will be an application of offer, invitations to treat,
agreement and acceptance. Also, there will be a previous case which is Fisher v Bell
(1961) with the judgment of the Court that would support this case
- Analysis:
According to Cornell Law School (n.d), an offer can be defined as a proposal to do or to
give something in exchange for something by legal biding conditions between parties.
Meanwhile, an invitation to treat means that a person invites others to generate an offer
with the purpose of forming a binding contract (Faryadi, 1961). However, this term
cannot be considered as an offer. There are four types of invitation to treat which are
auctions, advertisements, exhibition of goods for sales and tenders. Besides that,
acceptance means an agreement to the terms mentioned in the offer made by the offeror.
To specify, the acceptance should match with the terms in the offer in order to make a
binding offer.
In this case, it can be easily seen that the shopkeeper did not give Kane any offer at all.
The seller just only displayed the clock in the store so this can be only considered as an
invitation to treat.
In addition, according to a previous case with similar facts which is Fisher v Bell (1961).
In specific, a seller exhibited a flick knife on the window of the store with the price tag
behind it. Hence, he was alleged of having offered to sell that knife that violated Section
1 in the Restriction of Offensive Weapons Act 1959. However, the Court had concluded
that displaying the knife did not imply an offer to sell but the invitation to treat for it. As
a result, the shopkeeper was innocent. Looking into the detail, commonly, it might be
assumed that exhibiting the knife means the salesperson offer to sell it. In contrast, when
it comes to the legal site, it is considered to be an invitation whether the buyer wants to
buy or not rather than an offer. In short, there is no offer incurred.
- Conclusion: From the analysis above and the holding of the Court for the case Fisher v
Bell (1961), it can be concluded that it is likely that the shopkeeper will prevail in this
case if the Court were to settle this case.
Scenario 2: Otis v Annie
Facts: Otis offered to sell a dog for a price of £1,200 but Annie wanted to buy it for £1,000 and
Otis refuse to sell. Therefore, Annie agreed to buy with at original price but Otis still not sell it to
her.
IRAC analysis:
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- Issue: Is Annie’s acceptance to buy a dog at £1200 considered to be a valid acceptance to
original invitation of Otis?
- Regulation: In this case, the rejection of offer, counter offer as well as acceptance and
agreement would be considered as factors to deal with the case. Moreover, a previous
case having similar facts which is Hyde v Wrench (1840) along with the Court ruling will
be involved in solving this case.
- Analysis:
Counter-offer incurs when the offeree response to the offer by forming another offer but
in different terms (Kelmendi, 2017). This means that the offeror would become offeree
and vice versa. Additionally, a rejection of an offer can be an outright rejection, which
might call off not only the offer but also the counter offer, leads to the termination of the
original one. Moreover, the acceptance of the offer must be exactly the same with the
terms without any adjustment which can be called the mirror image rule in the contract
law.
Turning into this case, it is obvious that Annie had made a counter-offer by rejecting the
original offer of 1200 pounds given by Otis which means terminate the original offer and
violate the mirror image rule.
Furthermore, looking into the case Hyde v Wrench (1840) having similar facts, the
defendant offer to sell a farm with the price of £1,000. However, the `claimant agree to
buy but with £950 which is refused by the defendant. As a result, the claimant accept the
original price but the defendant refuse to sell.
According to the Court, there is no contact in this case as the claimant had made a
counter offer which had break the original offer. Hence, it was longer be accepted by the
offeree.
- Conclusion: In conclusion, basing on the interpretation above as well as the decision
from the Court for Hyde v Wrench (1840), it can be seen that Annie will lose if this case
is brought to the Court.
Scenario 3:
Facts: Raj, an employee of Trumpet Ltd, reports to his manager named Gladys about him
receiving anonymous message with flight ticket attached with the implications that he should go
back to Pakistan. However, the manager ignore it.
IRAC analysis:
- Issue: Has Raj been discriminated by race at work?
- Regulation: The Equality Act 2010 (Section 4, 26 and 109 in specific) will be the source
of law that support for this case. In addition, a case with similar facts which is Martin v
Parkham Foods Limited 2006 with the holding of the Court that would help to solve this
case.
- Analysis:
According to Section 4 in the Equality Act 2010, it had listed 9 protected characteristics
in which race is one of them. Applying in this case, due to different origin, Raj is
considered to be one of the protected characteristics.
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In Section 26, A is considered to harasses B when A “A engages in unwanted conduct
related to a relevant protected characteristic” and A has the behavior that violate the
dignity of B or create an environment that intimidate, offence or humiliating B.
Therefore, this case can be attributed to harassment behavior as the coworkers of Raj
harass him by sending anonymous emails and the flight ticket. In other words, Raj was
targeted of discrimination by other coworkers.
Also, Section 109 specify liabilities as well as principals of the employer. In detail, in this
case, the manager who is Gladys should liable regardless of whether she know about the
case or not by taking all the reasonable steps to solve it.
Besides that, the case Martin v Parkam Food Ltd (2006) having similarities would
support more for this case. To specify, Martin, a homosexual subjecting to offensive
graffiti and remarks. He complaint to the company then his name is deleted but the
drawing still on the wall. After that Martin continue to complain the company due to his
name is again wrote on the wall. The company release notification that employees should
not draw at the wall but not mentioned about homophobia. As a result, Martin was
suspended because of the stress that he suffer from.
The Court, then, judged that Martin’s claim was successful except he was not a victim.
Although the announcement about discrimination restriction had been released but it was
not effective. In other word, the company only deal with the graffiti but not homophobia
which is the root cause in this case. Furthermore, the company had not apologized Martin
and also had not investigate his complain properly.
- Conclusion: From the provided analysis as well as the judgment from the Court, Raj had
been resisted by his colleague and the manager, Gladys, had done nothing about this.
Hence, it is likely that Raj would win this case over Trumpet Ltd Company.
VIII. Legal advice
Example Advice
given
for
Source of legal
advice
Similarities Differences Evaluation of the
effectiveness for legal
advice
Scenario 1:
Kane v
Salesperson
Kane Solicitor: a
website enable to
reach to the
database of legal
adviser.
Citizens Advise:
provides free,
confidential legal
advice
Both of them are
able to reach
online, provide
legal advice with
high reliability.
The citizen advise
provides advices
freely while the
other source cost
fee
The solicitor can be
accessed online.
Meanwhile, citizens
advise can be
reached both online
and offline
By getting legal
advices from these two
sources, Kane can
know more about his
current situation
without going to the
Court which
unnecessary. Although
using citizen advise is
more convenient as it
can be accessed by
phone or at many
locations within the
UK. However, the legal
advice from solicitor is
more reliable as it
17

provided by legal
adviser despite of the
cost. Therefore, it is
likely that going to
solicitor is the most
suitable source of legal
advice for Kane
Scenario 2:
Annie v
Otis
Annie Advice Now: a
website providing
free guidance in
terms of legal
problems
Law Centers:
offer free legal
advice deeply
about social
welfare but also
other areas for
local
communities.
Both of the
source gives free
legal advice with
highly reliable.
While Advice Now
can be access as in
the form of website,
law center require
to go on the center
of law.
Furthermore, law
center only
provides advices
for local people
while everyone can
be given the
solution for legal
issues.
It can be seen that both
of the source provide
free and reliable legal
advice. However,
although the law center
can deal with other
area, it specialize in
social welfare. On the
other hand, Advice
Now not only provide
legal advice in all areas
but also require no cost.
As a result, Annie
should access to
Advice Now for useful
legal advice for her
situation.
Scenario 3:
Raj v
Gladys
Gladys Solicitor: a
website supply
assessment to the
legal adviser
database
Trade Union:
provides free
legal help for its
membership.
Both of the
solicitor and trade
union provide
legal advice with
high reliability.
Also, both of
them can be
accessed through
website
The legal advices
from solicitor cost
fee while the trade
union are free.
However, everyone
can have legal
advice from
solicitor.
Meanwhile, the
trade union only
provides for its
membership
Although the two
recommended sources
have advantages, it is
appropriate for Gladys
in this case that she
should use the solicitor
for legal advice.
Although the trade
union provides freely
but only for its
member. Nevertheless,
solicitor may cost a fee
for legal advice but
they are all from
adviser specialize in
law field.
IX. Evaluation of the effectiveness of the legal solution
18

Examples Advices
given to
person
Alternative
dispute
resolution
Advantages Disadvantages Evaluation of the effectiveness
for legal solution
Scenario
1: Kane v
Salespers
on
Kane Negotiation
and
mediation
In this case,
negotiation is
completely
private between
parties.
Moreover, this
method is quick
and helps
parties to
maintain the
relationship
after
negotiating.
Besides that,
mediation
involve the
third party
which would be
fairer and there
is no favors for
anyone. Also,
mediation does
not include
additional cost
However,
negotiating using
solicitor may incur
additional fee.
Moreover,
negotiation would
not be protected by
the law as it does
not involve in the
law.
In addition, like
negotiation, one of
the most
considerable
weaknesses of
mediation is that it
does not involve
the law which
might not follow
any rule.
Moreover, the
settlement between
parties cannot be
right judged due to
lack of law
capable and
knowledge of the
third party
In the case of Kane v the shop
seller, he should consider to
negotiation first as it easy and
include no cost. During the
negotiation, some attractive
conditions might by include so
as to increase the level of
successful as well as convince
the other party. Nevertheless, in
case Kane cannot negotiate with
the other person then they con
choose to mediate as an
intermediary is involve in
Scenario
2: Annie
v Otis
Annie Negotiation
and
mediation
As Annie has little chance of
winning in this case, she should
choose to negotiate with Otis
first as it cost no fee. After that,
if the negotiation did not go well
then Annie can have a third
person to solve this problem. As
a result, that person would help
both Otis and Annie to make a
deal with each other.
Scenario
3: Raj v
Gladys
Gladys Negotiation
, mediation
and
litigation.
Similar to 2
case above,
using mediation
and litigation
can bring about
some benefits.
Moreover, in
terms of
litigation, it
require parties
to follow the
judge which is
fairer.
Similar to the two
mentioned above
cases, negotiation
and mediation may
cause some
drawbacks when
apply. Besides
that, in the case of
Raj v Gladys,
litigation can cost
much time basing
on the
complication of
Applying in this case,
negotiation should be the first
chosen by Gladys as it would
save much cost and time. Also,
after negotiating, both parties
can keep the relationship.
Nevertheless, if the they cannot
go to the final decision then
Gladys should apply mediation
by asking a third person to
judge. Hence, this would be no
biasness as well as it also save
cost.
19

Moreover, some
potential
outcomes can
be predicted
the case.
Moreover, if the
sue party did not
win the case then it
would lose the
significant amount
of money.
However, in case the mediation
does help then the final decision
would be going to the Court.
This method may break the
relationship between Raj and
Gladys but it would be much
effective as the Court can solve
the case with the law base. As a
result, this would be more
reasonable.
Reference:
“Equality Act 2010.” Legislation.Gov.Uk, 2011,
www.legislation.gov.uk/ukpga/2010/15/contents. Accessed 4 Jan. 2021.
Faryadi, Quais. “WHAT IS INVITATION TO TREAT? - PDF Free Download.” Docplayer.net,
2012, docplayer.net/40813447-What-is-invitation-to-treat.html. Accessed 4 Jan. 2021.
gov.au. “Unincorporated Business.” Aihw.Gov.Au, 2013,
meteor.aihw.gov.au/content/index.phtml/itemId/327462#:~:text=A%20business%20that
20

%20does%20not,proprietorships%2C%20partnerships%20and%20family%20trusts.
Accessed 4 Jan. 2021.
Government Digital Service. “Running a Limited Company.” GOV.UK, 3 July 2012,
www.gov.uk/running-a-limited-company/signs-stationery-and-promotional-material.
Accessed 4 Jan. 2021.
“Limited Company Advantages and Disadvantages - Company Bug.” Company Bug, 21 Dec.
2020, www.companybug.com/limited-company-advantages-and-disadvantages/.
Accessed 4 Jan. 2021.
“Offer.” LII / Legal Information Institute, 2021, www.law.cornell.edu/wex/offer#:~:text=A
%20promise%20to%20do%20or,wex%20definitions. Accessed 4 Jan. 2021.
“Set up a Limited Company: Step by Step.” Www.Gov.Uk, 2021, www.gov.uk/set-up-limited-
company. Accessed 4 Jan. 2021.
Zahir, Nerissa. “Hyde v Wrench (1840) 49 ER 132.” Scribd, 1840,
fr.scribd.com/document/244471636/Hyde-v-Wrench-1840-49-ER-132. Accessed 4 Jan.
2021.
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