Legal Solutions for Business Disputes

This assignment provides a comprehensive analysis of legal solutions for business disputes in the UK. It explores different sources of law, including parliamentary acts, delegated legislation, European Union directives, and case laws. The report also examines various business organization types, such as sole traders, partnerships, and limited companies, highlighting their features, advantages, and disadvantages. Additionally, it presents two real-world examples of business disputes, one involving a court lawsuit (Donoghue vs Stevenson) and the other involving an arbitration method to resolve a salary dispute between employees and a company. The report concludes by evaluating the effectiveness of both legal approaches and recommending the best solution for resolving critical business disputes.

BUSINESS LAW

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
P1. Different sources of UK Law...........................................................................................1
P2. Defining the role of government in law making and application of statutory and common
law..........................................................................................................................................2
in justice court........................................................................................................................2
M1. Evaluating effectiveness of legal system in recent reforms and developments.............3
LO 2.................................................................................................................................................4
P3. Elaborating with example the impact of company, employment and contract law on
business...................................................................................................................................4
M2. Differentiating between legislation, regulations and standards with impact on business.5
D1. Critically evaluation of the legal system and law............................................................5
LO 3.................................................................................................................................................5
P4. Formation of different types of business organisation on legal basis..............................5
P5. Management and funding aspects of different types of business organisation................6
M3. Advantage and disadvantage of different business organisation....................................7
D2. Critical review and evaluation of different types of business organisation.....................8
LO 4.................................................................................................................................................9
P6. Identifying & recommending appropriate legal solution for resolving two different
disputes ..................................................................................................................................9
with relevant examples...........................................................................................................9
M4. and D3. Comparison and evaluation of the different sources of legal advise and support
..............................................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business Law applies to the context of business operations and processes. Business law is also
known as Commercial Law, it is body of law which regulates and governs the trade and
commercial business practices of any company. A company should adhere to all the applicable
rules, regulations, laws. With the help of business law, dealings between public and private
matter can be governed. The present report is based on Global Solicitors, a law firm which
provides legal advises, solution to all dispute and employment related cases. The report will
explain different sources of law along with role of government in making of law. How company,
employment and contract law impact business will be defined. Formulation of different types of
business organisation and their management will be disclosed in the report. At last, the report
will shed light on different legal advices, solution and support available for effective dispute
cases resolution.
MAIN BODY
LO 1
P1. Different sources of UK Law.
Sources of law refers to origins of laws, rules, regulations which are binding guidelines
that enables any state in governing and regulating its territory.
Sources of law includes following:
1. European Law – It has been a source of UK law from 1973, which takes priority in case
of any conflicts or disputes. It has following sources included in:
Treaties – Are legal obligations directly enforceable by individual citizens under the Article of
119 of the Treaty of Rome. It emphasizes on factors related to the equal treatment of men and
women in employment (Alix Adams., 2019. Business Law file).
Regulations – Helps in imposing uniformity of law among all the community by taking into
effect all member states on immediate basis after being issued.
Directives – Is applied to all the member state with intention of harmonisation of law between
them by making it similar but not in identical form.
Decisions – It grants power to party either to do something or prevent it from doing something. It
lays impact on only particular member states, company and individual.
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2. Delegated Legislation – This are considered as the indirect or secondary legislation
made outside parliament by bodies with the exercise of legislative powers delegated by
Act of parliament. Four types of delegated legislation are:
Orders in council – In case of national emergency, the Emergency Powers Act 1939 and 1984
gives law making powers to the Pivy Council.
Statutory Instruments – Are developed by government departments for executing general
principles of policy and guidelines set out in the Act of parliament. It empowers State secretary
in formulation of rules for safeguarding credit facilitates of users.
Regulations to implement law from the European Union – Ministers and government
departments are empowered by the European Communities Act, 1972 for implementation of
provisions related to directives and treaties (Alix Adams., 2019. Business Law file).
Bye laws – Regulates all the facilities provided by local authorities and other regulatory bodies
having statutory powers.
3. Act of Parliament – On of the main source of UK law, a Bill after approval from
majority in the House of Commons and the House of Lords along with assent by the
reigning monarch becomes an Act of Parliament. It thus is enforced in all applicable
areas of the UK.
4. Case Law – It is based on the doctrine of stare decisis and known by name such as
Common law, Judicial Precedent. It is considered as accumulated principles of law which
is derived from centuries of decisions. All the judgements passed by judges are recorded
in important cases and thus become sources of law.
P2. Defining the role of government in law making and application of statutory and common law
in justice court.
The government of every country plays crucial role in formulation and implementation of
new law or for making amendments in existing law. The proposed law contains all the new rules,
amendments, guidelines and principles. It can also be used for implementing any changes in the
existing laws and rules which are helping states or member states in governing and regulating its
territory.
The proposed new law is called a Bill which is represented in both the Houses viz.
Houses of Commons and Houses of Lords. The bill is introduced by First reading i.e. an official
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notice containing Bill is going to be proposed and what is Bill about has be declared. In first
reading, time is being given to all the Member of parliament for conducting process related to
preparation and discussion of bill. After first reading, Second reading is taken into consideration.
In this reading, principles are considered on the floor of House. The bill is thus sent to small
group of parliament members for having a look and examining the bill in detail.
At last, third reading takes place. In this stage the proposed new bill is debated and voting
take place for assessing the majority favour. On receiving government majority, the bill is then
passed to the House of Lords.
After getting passed by both the house, the bill is sent to the Queen for getting Royal
Assent. Once the bill gets royal assent, bills become an Act of Parliament and thereby new law.
Application of Common Law – The term Common law is legal precedent made by the
judges sitting in court having in effect (Alix Adams., 2019. Business Law file). The common law
or case law ensures that the law prevailing in the state or company should remains common
throughout the country land. The common law helps statutory law up to date, provides modern
problems and solutions and creates judicial precedent where there is no statutory codification
available.
Application of Statutory Law – The statutory law is defined as the law which is created
with the some meaningful purpose by the Legislature and thus made into law. Statutory law is a
written law which is set down by the body of legislature or by a singular legislator in the case of
absolute monarchy.
M1. Evaluating effectiveness of legal system in recent reforms and developments.
There has been significant changes in the Legal System which has laid down emphasis on
the recent reforms and developments in UK. Changes in legal and judicial system over the last
15 years has been taken into consideration. It is broadly categories into two phases viz. the
Labour administrations and second was Conservative administrations.
It includes creating Legal Services Commission to run legal aid & new approaches for
delivery of legal services to poor society, creating Supreme Court by replacing judicial functions
of the House of Lords, formulation of new court for hearing major international commercial
disputes, creation of the Ministry of Justice by replacing the Department for Constitutional
Affairs and the Lord Chancellor’s Department etc.
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LO 2
P3. Elaborating with example the impact of company, employment and contract law on business.
Company Act – The Companies Act, 2006 defines the law related to the incorporation of
the new company. It helps company by defining the applicable laws, provisions, guidelines and
regulations. It is applicable to the business operations of both the private as well as public
company. It assists company by providing the required procedures for the formation and
dissolution of company as per the rules, regulations and other applicable provision of this act.
The Companies Act also regulates the role and responsibility of a company, its directors, auditors
towards stakeholders and investors. Every company should make compliance of all the
applicable provisions to avoid being penalise with heavy fines and striking off the name of
company from the registers. The act also defines that company is having separate legal identity
from its owner and limited liability. This feature can be understand in Salomon v A Salomon &
Co Ltd case, in which judgement was passed that the company is a separate legal entity distinct
from its members and thus insulating Mr. Salomon owner of Company from personal liability
towards the creditors of the company.
Employment Act – The Employment Act, 2002 is defined as a set of laws which deals
with the rights and powers of employees and the roles and responsibilities of the employers of
company. Employment law covers business and employment related issues such as pension
plans, retirement, occupational safety, discrimination in the workplace (Alix Adams., 2019.
Business Law file). It also emphasizes on providing equal opportunity and pay to employees,
physical and mental safety. This act can be better understand with case Pimlico Plumbers Ltd.
V Smith. In this case, company denies reducing working hours, sick and holiday pay of its
employee named Smith (who was a tradesman worker) after suffering from heart attack. As a
result, smith files claim for unfair dismissal, discrimination on grounds of disablement under
both the Employment Rights Act and the Equality Act.
Contract Act – Any contract or agreement made between two parties can be made
enforceable by law by entering into the Contract Act, 1999. This contract act is an agreement
made between two or more parties with the objective of performing a service, providing or
delivery of product or committing to an act in exchange of some price consideration, which is
enforceable by law. The party entering into contract should not be minor. Specification in
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contract has to be made at the time of entering into contract. This act can be better understand
with case Thornton v Shoe Lane Parking Ltd. Which has shown that no additional clause can
be included without prior notice, after conclusion of contract has been made.
M2. Differentiating between legislation, regulations and standards with impact on business.
The term legislation is defined as the law which has been enacted by the legislature or
any other governing body. It is the process through which any amendments in provisions,
regulations or statutes are enacted by a legislative body which is established and empowered to
do so.
Regulation is a process of controlling an activity by way of rules, regulations. These are
rules made by the government or other regulating authority so as to control the mechanism of
doing something or the way people behave.
Standards are defined as the quality level which is set by company for adherence of
activity performed. This standards help company in improving its performance and profitability
level.
D1. Critically evaluation of the legal system and law.
The legal system and law can be critically evaluated as application of regulations and
legislation is compulsory without raising question over its applicability. Rather, applying
standers is voluntary and on the wish of a business. Such as application of equity act 2010 is
compulsory for an organisation to treat every one equally. In its continuation the maternal and
paternal leave etc regulation, 1999 defines how it inequity and discrimination must be avoided
for specific people in organisation. On the other hand the standers related with giving maternity
treatment in business is on the discretion of the organisation to follow or not.
LO 3
P4. Formation of different types of business organisation on legal basis
Sole proprietorship – Also known as Sole trader, proprietorship which is a type of
business enterprise owned and run by one person under his or her name. In this business
enterprise there is no legal distinction between the owner and business entity. Has independent
control over the business and its profits. The sole trader is responsible for all the financial losses
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and risk associated with the business. Each business asset is owned by the sole proprietor and is
liable for all business debts.
Partnership – One of the type of business organisation is Partnership business. In this
type of business organisation, two or more number or persons or partners having common
objectives come together for conducting a business operation. The amount of profits earned or
loss incurred is shared by each partner of the business in the decided profit sharing ratio. Each
partner comes up with some additional amount of capital to start the operation of business. The
liability of each member or partner is decided i.e. up to the extent of capital contributed or it can
be unlimited. Partners in partnership business are held personally liable for the debts of its
business and for other legal obligations.
Limited company – Company registered under the provisions of Companies Act can be
either limited company by shares or limited by guarantee. A company is an artificial person
which is having a separate legal entity from its member and owner. Limited Company is that
company in which the liability of its members is limited up to the amount invested by them in the
company in form of capital or guarantee provided by them (Alix Adams., 2019. Business Law
file). Every company should make compliance of each rules, regulation or provisions which is
applicable on it for not being penalise from the regulatory bodies of company. Limited company
can further be categorise as Public company or Private Company.
P5. Management and funding aspects of different types of business organisation.
Management of different types of business organisation are as follows:
Sole Proprietorship – This type of business organisation is regulated and governed by
one single person or individual. The business activities and operations of sole proprietorship
business is undertaken by the sole trader himself. For smooth functioning of business operations,
sole trader is required to employ a team of self sufficient, skilled, creative and knowledgable
candidate.
Partnership – Under partnership business, the business operations and activities are
managed by the partners of business. Each partner is having different role and responsibilities
towards company. Partner in partnership business can bring in more capital as well as goodwill
for the better future and success of the business.
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Limited Company – The business activities of limited company can be managed and
controlled by the manager, key managerial personnels, directors etc. having management
authority. Company should appoint auditor, compliance officer for ensuring the compliance of
applicable business regulations, provisions or rules timely.
Funding of different business organisation are discussed below:
Sole Proprietorship – The sole trader can finance its sole proprietorship business by
using own savings, funds or bank balance. The business operations can be started by making
proper and effective utilization of available funds and cash amount. Also, sole trader can take
financial assistance from bank, friends and relatives.
Partnership – In this business type, each partner entering into the partnership business
comes up with some capital amount or cash amount for undertaking the operational function of
the business. Additional capital requirement can be fulfilled either by taking loan or by bringing
on more capital contribution by partners (Alix Adams., 2019. Business Law file).
Limited Company – In limited company, funding can be done either by issuing of new
shares in the market, bank loan either secured or unsecured one, term loan, debt financing etc.
Different types of internal sources such as retained earnings, sale of assets etc. as well external
sources of funding like bank loan is available for company to get its financial requirement fulfil.
M3. Advantage and disadvantage of different business organisation.
Sole Proprietorship Business – Is a business type in which a single person is considered
as the owner of business.
Advantages Disadvantages
Ease of formation - Sole proprietorship can
easily be formed by one person by starting any
legal business activity for earning profit.
Flexible management - Sole proprietor has
right to make decision regarding business
policy formulation, production, reducing or
increasing the prices of product or services etc.
Burden of unlimited liability - In case if the
claims of the creditors exceed or increase
against business, then the personal property of
the sole trader is used to pay business debts.
Absence of specialization – Because of lack of
specialization in this business, the owner is not
able to get the specialised services of experts
like accountant etc.
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Partnership – Formation of partnership business comes up with following advantages
and disadvantages to the partners of business.
Advantages Disadvantages
Combination of Skill & Balanced Judgement
- The partnership business organisation has
benefit of the skilled, capable, experienced and
talented partners which can carry on smooth
business operations (Alix Adams., 2019.
Business Law file).
Sharing of Risk – Partner borne equally all
benefits and losses taking place in the business.
Instability - On death, lunacy or insolvency of
any partner, the partnership business get
affected.
It may be closed if a single partner expresses
his desire to dissolve the partnership or to get it
dissolved by the order of court on account of
wrongful act.
Limited Company – This type of business organisation has following advantages and
disadvantages:
Advantages Disadvantages
Limited Liability – Members of company will
only be liable for debt in accordance with their
investment and guarantee made.
Separate Entity – Company is having separate
legal entity from its owners. It will continue in
existence even after members death and
retirement.
Paying corporation tax – Business is liable for
corporation tax on the profits of the business.
Complex Accounts – It has to follow complex
and restrictive rules, regulations related to the
preparation of accounts and bookkeeping
process.
D2. Critical review and evaluation of different types of business organisation.
The review about different types of business organisation can be done on the basis of its
features, advantages as well as disadvantages. The sole proprietorship business considered as the
easiest form of business. The sole trader or any individual person can form and operates this
business. It doesn't have to comply with stringent rules and regulations as compared to other
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business type. When it comes to the partnership form of business, it has one critic feature of
management conflict in the thoughts and decision making process. On the other hand, limited
company business is defined as the most complex type of business form as its requires
compliances of lot of legal formalities.
LO 4
P6. Identifying & recommending appropriate legal solution for resolving two different disputes
with relevant examples
Case illustration 1 – In the case of Donoghue v Stevenson, Donoghue along with her
friend went in the cafe in Paisley for enjoying ginger beer. She drank some beer and later poured
over her ice-cream. When she poured, was horrified to see the decomposed remains of a snail
exit the bottle. Due to this Donoghue suffered nervous shock and gastro-enteritis, but did not sue
the cafe owner instead suing the manufacturer named Stevenson.
Legal Solution – According to the duty of care, Stevenson has breaches the care to be
taken while carrying on the production function and manufacturing function. Negligence of duty
of care has been done for which Stevenson has been sued by Donoghue. The legal remedy can be
that Stevenson should follow proper quality standards during production and manufacturing
business operations so as to avoid such kind of accidents.
Case Illustration 2 - Case of KYC Company can be taken for understanding the process
of Arbitration method of Alternative dispute resolution (ADR). The company is facing various
financial issues during the year 2016 as a result is not above to pay its employee salary. For
resolving this situation, management request employees to forgo salary by accepting commission
of 10% of their salary for the period of 2 years till the time company retrieve its position back.
All employees agree to same & salary for 2016-2017 were not paid. In mid of 2017, company
seeks government aid for improving its business position and attain better situation by the end of
financial year. During 2017, employees asked for their salary of 2017 & last year on which
management of KYC is refusing to pay. Suggest legal solution as both company and employees
do not want to go to court for solving dispute.
Legal solution: As company and employees do not want court intervention against which
they are advised to go for Arbitration method of Alternative dispute resolution (ADR). Under
this method of arbitration, the arbitrator takes into account all the relevant facts and evidences
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related to case from both the parties. Then arbitrator, with the rights of employee of minimum
wages can pass award in their favour. This process is thus considered as easy, less time
consuming and cheaper than compared to court proceeding. Thus, it is the best solution for both
the parties to resolve their issue without litigating.
M4. and D3. Comparison and evaluation of the different sources of legal advise and support
The comparison of the legal solutions provided above can be stated that under the
litigation process, intervention of court is there and in the ADR method legal solution is given
without involving the court.
Both solutions are legal as per the law system and provide effective resolution to the
dispute. The evaluation of the legal advise can be done as for the case 1 Donoghue has the right
to go to court and sue Stevenson for the injuries suffered due to negligence and breach of duty of
care. Whereas in the case 2, both parties mutually agreed to not to go to court instead referred to
arbitration to ascertain decision. Both solutions gave effective remedies for case one it is through
court procedure of litigation and for case 2 it is outside the court which is must fast and less
expensive method.
CONCLUSION
From the above report it can be concluded that sources of laws includes act of parliament,
delegated legislation, European union directives and the case laws. The laws in UK are made by
following parliamentary procedure of receiving approval from both the houses of parliament and
thereafter the Royal assent from the Queen. The application of both common law and statutory
have been identifies different from each other in legal aspects. The employment, contract and
company law has different impact on business which have been explained with suitable and
relevant examples. Furthermore, different types of business organisation has been identified as
sole trader, partnership and limited company on different features such as separate legal entity,
legal formation, management and funding. Advantages and disadvantages of various business
types has also been outlined in the report. Legal solution through legal and alternative dispute
resolution method have been provided for solving critical dispute with two example along with
critically evaluation of the best one.
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REFERENCES
Alix Adams., 2019. Business Law file.
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