Business Law: Legal System, Sources of Law, and Implications on Business

This document provides an overview of business law, including the legal system, sources of law, and their implications on business. It also discusses different types of business organizations and how they are managed and funded. The document includes a case study on the variation of contract and employee rights.

UNIT 7: BUSINESS LAW

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
1. Examining legal system, various sources of law, role of government in making law and
application of statutory law.........................................................................................................3
2. Critical reflection of legal system to determine strengths and weakness................................4
3. Examining key legislations, standards and regulations...........................................................4
4. Various law and there implication on business.......................................................................5
5. Different types and classification of business organization. ..................................................5
6) Organisation managed and funded in business.......................................................................6
PART 2............................................................................................................................................7
CASE 1........................................................................................................................................7
CASE 2........................................................................................................................................8
CASE 3......................................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Business law refers to the such laws which is implemented on business and also take care
of the running and formation of various business activities. It mainly protect the right of the
parties in respect of dealing in any business or entering into any contract or also expanding the
business into different countries. Thus through this aspects it helps in protecting the i8rght of the
parties in respect of facing any illegal activities (Business Law and Regulation, 2019). The illegal
offences which is committed by any of the person are publishable under the courts of law. The
crime are related to civil and criminal matter as civil matter related to theft, fraud or trespassing
of any property which affects the right of the parties but not causes serious harm. In case of
criminal matter, the crime are related to rape, murder or infringement of any property which
affects the owner of the property in wider way. This report will includes the matter related to
nature of the English legal system and also the sources of law. It further carries the report in
respect of determining the potential impact of law on business. It also includes the types of
business formation and its procedure to managed and funding the business in better way. Lastly
the report ends up with the the legal solutions of the appropriate case study to provide the
accurate guidance to parties.
PART 1
1. Examining legal system, various sources of law, role of government in making law and
application of statutory law.
Legal system is referred to as an effective procedure which helps in enforcing and
interpreting laws (Nelken, 2017). This is useful in elaborating rights and responsibilities in
various ways. It helps in providing legal, predictable, systematic and orderly mechanism for
resolving any disagreement.
European community law: This is a body of law, court judgement and treaties which
mainly operates along the side of any legal system (Reimann and Zimmermann, 2019). EU law
tends to take precedence over the national law which in binded by national authorities.
Case law: This law is mainly supported by doctrine of stare decisive. It is the collection
of past legal decision which is mainly written by the court. This helps in resolving ambiguities in
order to make valid decision for current cases.
Legislation law: This law is created by the legislature and is considered to be the primary
source of law in United Kingdom (Barnard and Peers, 2017). This law main purpose is

regulating, authorizing, analysing, proscribing, funding, sanctioning, granting, declaring and
restricting. This mainly comprises of House of commons and House of Lords.
Common law: This is considered to be as a body of law which is mainly derived from
judicial decision making. This is considered a legal system of Wales and England, where senior
appellate courts decision tend to become part of the law.
Parliamentary conventions: These are not considered to be strict rule of law. This la w is
useful in compensating relationship between House of commons and House of Lords.
Role of government in law making.
The parliament of the UK perform various core functions which mainly includes drafting laws,
reviewing role of parliaments, amend law, pass law and effectively monitor the various actions
of the government (Haigh, 2018). The member bills of the UK mainly focuses on drafting the
laws. Government tend to focus on developing several new laws and policies. The legislative
branch is mainly responsible for approving policies and passing new laws in order to give legal
effect to policies.
Statutory laws are considered to be the most authoritative law of the England. They are
already written laws where they can be effectively applied to specific case. In the absence of
statutory law, then common law is considered to be the residual source of law with the most
common principle stare decisis.
2. Critical reflection of legal system to determine strengths and weakness.
The key strength of the legal system is that it helps in providing change and flexibility in
the law making process (Reimann and Zimmermann, 2019). Legal system tends to focus on
filling up the gaps in the laws in case the particular situation tend to arise. Judges tends to
critically evaluate the weakness and benefit of law for attaining valid conclusive points. On the
contrary, the major disadvantage of a legal system is that, the court tends to bound to outdated
precedent law which might result in unjust ruing.
3. Examining key legislations, standards and regulations.
Legislation is considered to be one of the important factor as it helps in protecting and
organizing activities of the business. It helps in determining responsibilities of each individual
within the organization (Nelken, 2017). Legislations such as environment, competition,
consumer, health and safety law, etc. largely influence the working of the business. Regulation is
a directive which is retained by an authority. It helps in setting rules which helps in smooth

functioning of the business. Standards are considered to be an agreed way of doing something. It
is useful for business because it helps in mitigating risk and provide high quality services.
4. Various law and there implication on business.
Company law: It is a law which has been broken down into two main fields which is very
useful in mediating the various rights and duties of the shareholders of the company. This law is
useful in protecting the right of the shareholders.
Employment law: This law is useful in regulating the relationship between employees
and business (Faúndez, 2016). The implication of this law helps in governing what employers
expect from employees and various other rights associated with the tight to work in a particular
organization.
Contract law: This law helps in regulating contracts in Wales and England. The
implication of this law helps company in legally binding contracts between parties which is
enforceable by law (Barnard and Peers, 2017). This law helps in providing a product or service
to the business in a legal and lawful manner.
5. Different types and classification of business organization.
Limited companies: This is a company where the personal liability of the shareholders
are limited by the shares hold by them in the company. This is mainly classified as private
limited and public limited company (Tushnet, 2017). Private Ltd. company do not tend to offer
shares to the public. But on the contrary, public Ltd company can raise capital by effectively
offering shares to the public.
Advantages of Limited companies
 Shareholders of the company have limited liability.
 Tax efficient and is considered to be separate legal entity.
Disadvantages of Limited companies
 Complex to set up limited company. Liable to pay corporation tax which leads to high cost to the business.
Corporations: This is a legal entity which are considered to be separate legal bodies.
They have their own set of liabilities and privileges (Haigh, 2018). The corporations in the UK
tends to corporation tax.
Advantages of Corporations
 Shareholders are not liable for debt.

 Easy to transfer the ownership and also easier to raise capital.
 This company has perpetual lifetimes.
Disadvantages of Corporations
 Various number of legal formalities, regulations, federal or state rules. Expensive to form this business as compared to proprietorship.
Sole proprietorship: This is one of the most simple form of business where the owners of
the business is whole and sole liable for the profits and debt of the company (Reimann and
Zimmermann, 2019).
Advantages of Sole proprietorship
 This company is easy to form.
 The owner of the business has whole control over the business.
Disadvantages of Sole proprietorship
 Personally liable for loss and liabilities of business.
6) Organisation managed and funded in business
In respect of business, they can manage the overall activities in business through this
aspects such as:
 Sole proprietorship: They are managed by the person itself and in respect of funding they
manage it with friends or family. For e.g. If they are planning to buy new equipment, they
can invests funds from the personal saving only.
 Partnership: It is managed by the partner and also funding is invested equally by all the
partner. They also take help from banks (Ahammad and et.al., 2015). For e.g. in respect
of expanding business, all the partner invest equally to gain profits.
 Limited company: The company is managed by the owners and directors and also the
funding is undertaken through offering share to public. For e.g. Issuing share in market so
that public invest in such share to gain more profits.
 Social enterprises: This company is managed through organising charity functions. By
this funding is undertaken to help people in better way.
PART 2
CASE 1
Issue:

In this case study, the issue is raised regarding entering into the variation of contract
when the Orange computers Ltd store is facing financial crises in respect of providing wages to
their employees. Thus, the case is between Gordon V Fred, the manger of the orange computer
Ltd and the agreement is signed regarding not getting the wages for the period of the 2015, 2016
and 2017. As the reason which the Fred had given is regarding for the survival of the remaining
employees. In such aspects the deal in made regarding forgo of the salary. But after having the
support of the government through investment, the company maintain the stability in market.
Thus, in such aspects the issue is identified in relation to relieving back the wages which Gordon
earned in respect of undertaking the work but left such amount due to not having sufficient
money.
Rules:
Under the employments and labour law, 2016, it is imposes in respect of maintaining the
strong relationship between the employer and employees. As this laws is mainly designed in
respect of attaining the right and duties of the employer to take care of the employees in respect
of fulling their needs (Bayern and et.al., 2017). As in other hand it is the responsibility of the
employee to follow the order which is given by employer in respect of attaining such task
according to their guidance.
Under the Contract act, 1919 it is mainly applicable to the parties in context of entering
into any agreement. As usually contract is the agreement which bounds parties to follow all such
terms and condition which is mentioned in the agreement and also it is signed by both the parties
to maintain the authenticity in contract (Bouch and et.al., 2018). This contract is applicable in
case of breach committed by any of the parties, so by implementing this contract, it secure the
rights of the parties in respect of dealing in any such matter which helps to avoid any illegal
transaction.
This laws are based upon the case study of the Pimlico Plumber v Mr. smith. This case
reflect the understanding of the contract laws which is mentioned under the employment act. As
Mr. smith considered to be himself as the employees of the Pimlico Plummer under which he
carries the task which is assigned by the employer of the company. The issue which is arises in
this case study is relevant to termination from the job (Pimlico Plumbers Ltd & Mullins v Smith
[2018] UKSC 29, 2019). As Mr. smith cases major injury and due to this aspects he cannot
further carry the work and demanded the time compensation. Thus, in such aspects it results in

termination from the job and also not provide any major benefits being an employee of the
company. The issue also raised in respect of whether Smith is treated as employee of the
company or not.
Application:
From applying this above case study in the present case study, as Gordon is the employee
of the company and also work and enhances the company stability in market due to dealing the
matter in right way. Similar to this case, Mr. Smith is the employee of the company and also
engaged in undertaking all such norms which is imposed by the company. Thus, in such aspects
by undertaking the variation contract it results in signing the document when the partiers are
mutually agree on particular terms (Coulter and Hancké, 2016). Under the employment act, it is
the duty of the Fred to take care of the Gordon by fulfilling their needs in respect of managing
the company activities through government investment. Also in return if the Gordon is
demanding the wages for the years 2015, 2016 by which perspective they signed the document
relating to variation in contract. Thus, in such manner Gordon is not liable to get any wages if
Fred is agreed to pay it. As the agreement is signed by the mutual decision of the parties. Thus
the decision is to be respected by both the parties equally.
Conclusion:
From the above discussion which is stipulated in the above case study is relating to
getting wages for the year 2017. As Gordon is liable to get wages for the year 2017 as the
company is financially stable now and also pay wages to all the employees. Thus in such
circumstances, they can enjoy various rights being an employee of the Orange computers Ltd.
Stores.
CASE 2
Issue:
In this case study, the issue which is undertaken is between the Janet and the service
provider. As Janet is planing to install the internet at home and after conducting so much
research on the interest he decided to use the services of the virgin media to install the internet.
After making the contract with the service provider regarding the package installation of the
interest which cost around £35.00 per month. But due to facing various circumstances, the
procedure of installation was completed in time period of 3 weeks. After getting started, the
invoice bill of the internet packages in sent to Janet which charges the whole month internet

packages. Thus, the issue which is faced by Janet is not undertaking the full month payment as
the internet is installed after 3 weeks of dealing of the contract.
Rules:
Under the contract act, 1919, it is mainly related to bounding parties to fulfil the terms
and condition which is mentioned in contract. As it carries various elements to make the contract
valid such as the parties must be competent to handle the contract and must attained the age of
majority. The contract must be either oral or written and must be in consent with both the parties
to undertaking any terms in contract (Kraakman, 2017). Before entering into any contract it is
necessary that one party offer something to another party and such other other party accepts such
offer to enter into the agreement. As before entering into any agreement it is necessary that
contract must be made on the bases of some consideration or other valuable things.
The importance of the contract law is supported with the following case studies which is
relating to Carlill v Carbolic Smoke Balls Company Ltd. As in this case study, the facts which is
examined is relating to accepting the offer and entered into the contract (Carlill v. Carbolic
Smoke Ball Co, 2019). But the company not fulfil the terms which is mentioned in the contract
and thus it resulting to breach in any of the terms in contract.
Application:
By applying this case study, to the relevant case it states that by determining the elements
of the contract as both the parties are capable to fulfil the terms of the contract and also they both
are mutually agree with such terms (Lee, 2017). In respect of Janet and Virgin media, there is
resultant of breach of contract terms as nothing the installation of internet is done after 3 weeks
of entering into contract and the cost of the internet packages is applied for the whole month.
Thus, in such aspects, it results in breach committed by any of the terms.
Conclusion:
From the above case disunion, it is examined that both the parties had enter into the
contract with valid terms but the virgin media commit breach in any of the terms regarding
charging the internet packages prices for whole month. Thus,m the matter are to be resolved
under the contract act.
CASE 3
Issue:

The issue arises in respect of not repaying the money to creditors by which the decision is
undertaken in respect of winding up of company.
Rules
Under the Companies act, 2006 it carries such rules and regulation which is imposed by
company in respect of smooth working of the business. Thus various regulation are also imposed
in respect of not repaying money to creditors timely (Westermann-Behaylo, 2018). This is
supported with the case study of the Salomon Vs A Salomon & Co Ltd in which the issue arise
in respect of not repaying the money to creditors after being engaged in converting the single
proprietor business into company (Salomon v A Salomon & Co Ltd [1897] AC 22, 2019).
Application:
From this case study, the matter are relevant to the stated case study which stipulated that
the company had another option instead of choosing the winding up procedure. This can be
undertaken through preferring the negotiation method which is one of the method examined
under out of court settlement (Willett and Koutsias, 2016). As through this aspects, they
negotiate the matter instead of reaching to court for winding up procedure. By this aspects they
settle the matter easily and also the creditors carry the right to reach to court if they are not
satisfied with the decision.
Conclusion:
Thus, from the above discussion, the matter are concluded that black horse limited can
prefer the negotiation method to resole the matter with creditors. As through winding up
procedure it affects the reputation of the company and also affects the right of the investors in
market. Thus, this is the best method to resolve issue which is faced by company in fulfilling the
creditors needs in better way.
CONCLUSION
From the above report, the discussion are related to study of the business laws which is
imposed in respect of smooth running of business and also protect the right of the parties. In
respect of undertaking the various sources of law, it is interpreted to gather information
regarding imposing of such laws and also the procedure behind making such laws which is
undertaken by government. It also carries various information regarding choosing the different
types of business and also it procedure which is undertaken by banks or parties in respect of

managing such business. It also carries various legal information which helps parties to get
justice under the contract act, employment act and companies act.

REFERENCES
Books and Journals:
Ahammad, M. F. and et.al., 2015, September. Factors influenceing the share of ownership
sought in cross-border acquisitions-UK perspectives. EuroMed Research Business
Institute.
Barnard, C. and Peers, S. eds., 2017. European union law. Oxford University Press.
Bayern, S. and et.al., 2017. Company law and autonomous systems: a blueprint for lawyers,
entrepreneurs, and regulators. Hastings Sci. & Tech. LJ. 9. p.135.
Bouch, C.J. and et.al., 2018. Developing alternative business models for smart infrastructure: a
UK case study. Proceedings of the Institution of Civil Engineers-Smart Infrastructure and
Construction. 171(2). pp.77-87.
Coulter, S. and Hancké, B., 2016. A bonfire of the regulations, or business as usual? The UK
labour market and the political economy of Brexit. The Political Quarterly. 87(2). pp.148-
156.
Faúndez, J. ed., 2016. Good government and law: Legal and institutional reform in developing
countries. Springer.
Haigh, R., 2018. Legal English. Routledge.
Kraakman, R., 2017. The anatomy of corporate law: A comparative and functional approach.
Oxford University Press.
Lee, J., 2017. Striking a Fair Balance in UK Takeover Law: Market Interests, Power of
Regulation, and Enforcement. European Business Law Review. 28(6). pp.829-846.
Nelken, D., 2017. Comparing legal cultures. Routledge.
Reimann, M. and Zimmermann, R. eds., 2019. The Oxford handbook of comparative law. Oxford
University Press.
Tushnet, M., 2017. Comparative constitutional law. In The Oxford handbook of comparative law.
Westermann-Behaylo, M., 2018. Andreas Rühmkorf, Corporate Social Responsibility, Private
Law and Global Supply Chains (Cheltenham, UK: Edward Elgar Publishing, 2015), 288
pp. Business and Human Rights Journal. 3(1). pp.149-151.
Willett, C. and Koutsias, M., 2016. UK Implementation of the Unfair Commercial Practices
Directive. In The European Unfair Commercial Practices Directive. (pp. 33-56).
Routledge.
Online:
Business Law and Regulation. 2019. [Online]. Available through:
<https://www.icaew.com/library/subject-gateways/law/business-law-and-regulation>.

Carlill v. Carbolic Smoke Ball Co. 2019. Online. Available through:
<https://www.casebriefs.com/blog/law/contracts/contracts-keyed-to-calamari/the-
agreement-process/carlill-v-carbolic-smoke-ball-co-2/>.
Pimlico Plumbers Ltd & Mullins v Smith [2018] UKSC 29. 2019. Online. Available through:
<https://www.magdalenchambers.co.uk/pimlico-plumbers-ltd-mullins-v-smith-2018-uksc-
29-2/>.
Salomon v A Salomon & Co Ltd [1897] AC 22. 2019. Online. Available through:
<https://lawcasesummaries.com/knowledge-base/salomon-v-a-salomon-co-ltd-1897-ac-
22/>.