Business Law Case Study: Analyzing Partnerships, Contracts, Directors

This assignment is a comprehensive case study focusing on key aspects of business law. It begins by advising Mary and Gina on the most suitable business structure for their organic vegetable venture, considering the advantages and disadvantages of unincorporated (sole proprietorship, partnership) and incorporated (private, public) organizations, with reference to relevant legal provisions and cases. The assignment then examines whether a valid contract exists in a scenario involving a pricing error, referencing case law on offer and acceptance. Finally, it explains the sources of a director's authority to act on behalf of a company, the implications when a director acts outside their authority, and the effect on third parties. The document provides a thorough legal analysis of partnerships, contract law principles like 'invitation to treat', and the legal powers and limitations of company directors.

MAIN ASSESMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
PART 1 ...........................................................................................................................................3
Advise Mary and Gina on the most adequate business type for them and explain the
advantages and disadvantages of each option. In formulating your advice, you must give due
regard to the relevant cases and key legislative provisions....................................................3
PART 2 ...........................................................................................................................................6
Does valid contract exists between parties? ........................................................................6
PART 3 ...........................................................................................................................................8
With reference to relevant legislation, explain the sources of the director’s authority to act on
behalf of a company. How are third parties affected in case a director acts outside his
authority?................................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Business laws are the laws that has been used in order to form business organizations
according to legal structure present within an organization. These laws has been used in order to
make business organizations run as per the legal operations that has been conducted in relation
over business perspective(Salbu, 2018). Further, these laws are applied with contract an
company law which helps in making organizations achieve goals and objectives in more
effective manner. In these law various organizations that can be formed has been covered with its
funding and management. Then advantages and disadvantages is explained of these
organizations. Business law through company, employment and contract law helps in creating
balance within different operations of business. The file is based upon three parts within which
first part explains about various kinds of business organizations with there advantages and
disadvantages. Then comes second part dealing with contract law and binding contracts. In the
end third part covers about directors of an organization.
MAIN BODY
PART 1
Case scenario: In the case it can be observed that Mary and Gina are best friends and decided to
open their own business of buying and selling of organic vegetables(Orts, 2017). They come
over decision to set up business under the name “VegeLove” but are not sure what business type
would work best for them. Mary is slightly concerned about Gina's history of unpaid debts and
like business type that would offer more security.
Advise Mary and Gina on the most adequate business type for them and explain the advantages
and disadvantages of each option. In formulating your advice, you must give due regard to
the relevant cases and key legislative provisions.
In order to conducts business within a country various options are available which are
used for making business performed in more effective manner(Nersessian, 2018). There are
various kinds of business organizations helping in conducting business and has been explained as
follows:
Unincorporated organization: The organizations are formed without any kind of legal
obligation existing within process of performing business. These organizations makes business

entity formed within no time and involves less money within it. It contains two organizations
which are sole proprietor and partnership they are explained as follows:
Sole proprietorship: These are those organizations that has been used most commonly
for making execution done over business. In this organization single owner is there and is known
as sole proprietor(Nersessian, 2018). All aspects of business entity is handled by owners of
business and various other aspects of business is seek by them. These organizations are formed
through INHRC number and named is used in order to start the business. Management of such
organizations is done by single owner and is responsible for all conduct performed during
commencement of business. Funds for these organizations are done through personal source like
family and friends. There are various kinds of advantages and disadvantages possessed by the
organization and has been explained as follows:
Advantages
 All kinds of profit earned out of business is kept by owner themselves that helps in
making organization run smoothly.
 Formation process is also very easy and less time consuming making establishment
possible of business organization.
Disadvantage
 Arrangement of funds is arranged late ad makes business organization collapse at times.
 These organization faces heavy loss in relation to activities handled by one person.
Partnership firm: These organizations has been made with the help of two individuals that has
common motive for earning profit(Orts, 2017). The business organizations is formed out of
various elements which are risks, costs, benefits and responsibility involved within running of
business. Partnership are of two types general and limited which makes responsibility divided
among partners. The registration process includes INHRC number and partnership agreement is
formed only when legal process is formed. Funds for the organizations are arranged through
investment made by partners. There are certain advantages and disadvantages which has been
explained as follows:
Advantages
 Lower legal obligation is there which makes business run more smoothly.
 All aspects of business is handled by the partners themselves.

Disadvantage
 The organization does not posses legal status which makes functions performed with
difficulty(Lee, 2017).
 If an partner dies or conflict arises then partnership dissolves
Incorporated organization: These organizations are formed by complex process and
includes private organizations within it. Also public sector organizations are involved within it.
They are explained as follows:
Private organization: These organizations does not sell there share in public and used
Pvt. Ltd in its end. Registration of the organizations is done through collecting all documents and
then submitting it to Companies House for getting authentication. Funds for such organizations
are collected with the help of bank loans and debentures. Its advantages and disadvantages are
discussed as follows:
Advantages
 These organizations are separate from its owner and enjoys right of succession which
makes it separate entity from its owners.
 Business privacy is another important example making business organization run
effectively(Salbu, 2018).
Disadvantage
 Formation process includes huge amount of money and time
 Ownership is divided which makes it complex to run and perform functions.
Public organization: These are the organizations that has Public Limited in the end of its
name and sell shares in public. The organizations requires to collect documents like digital
signature, memorandum of association signed by partners in order to make registration done.
These organizations requires two directors and a company secretary to be submitted.
Management is done by the owners themselves. Its advantages and disadvantages has been
explained as follows:
Advantages
 Public corporations can formulate and implement policies which promote public welfare.

 In a public corporation red-tapism and bureaucratic delays are minimized to a great
extent.
Disadvantage
 It enjoys immunity from parliamentary inquiry into its day-to-day functioning(Hansen,
Rutt and Acheampong, 2018).
 Public corporation incurs losses, the government provides subsidies to make good the
loss.
From the discussion over various business organizations and comparing it with case
scenario it can be observed that Mary and Gina should use partnership form of business. Since
they are easy to form and no legal obligation is involved within it. This makes business run in
smooth and effective manner.
PART 2
Case scenario: Under the case Catherine has spot guitar within shop window with the
price tag of £1200. As she is willing to buy the guitar and shop assistant says that price tag is
incorrect and says that actual price is £2200. Also the shopkeeper refuses to sell it for £1200.
Does valid contract exists between parties?
Contract law are the laws that is related to formation of agreement which takes place
within two or more then two parties. These laws has been used in order to create agreements that
has been formed between parties. It has helped in making contract formed in more stable manner
by following legal structure existing within contract laws. This makes transactions of various
kinds done in effective manner(Schmitthoff, 2020). Contract can be in written and unwritten
form which means it can be expressed or implied as per the nature of contract. It leads upon
making contract formed through promise also. Under contract law there are various elements
which is used in order to form contract in more effective manner. These elements are offer,
acceptance, obligation, legality and validity. In offer the idea of contract is presented to another
party making an contract to be initiated. Then comes acceptance that is created towards offer
which has been presented by parties in this mindset of parties matters with there ideology. Third
element is obligation which has been formed regarding rules and regulations existing within
contract in this partners discuss with each other about contract. All partner are bound to follow
these obligations as they makes execution of contract done effectively. Then come legality

making contract attain legal status over the laws which is used within them. The last elements is
validity related to base of contract(Halbert and Ingulli, 2020). Contract cannot be formed on the
basis of any illegal activity like smuggling and betting. The laws enshrines the concept of
binding contract which means valid contract to be formed. Further, as per the case scenario it can
be observed that invitation to treat exists in this condition as only offer has been presented but no
acceptance has been shown. This condition exists within offer and acceptance.
Relevant Case law
Fisher v Bell
In this case it has been observed that defendant had an flock of knife which is displayed
in his shop window a had pricing tag upon it. As per statute it has been considered to be criminal
offence for offering such knife or performing sales of it (Schmitthoff, 2020). The conviction was
quashed as good over display within the shop is not an offer and in technical sense invitation to
treat exists. Also the court applied literature rule over statutory interpretation.
Pharmaceutical Society of Great Britain v Boots
Boots has introduced new self service system within the shops wherein customers pick up
goods from shelf and then put them in basket which makes cash to be paid. The Pharmaceutical
society Of Great Britain has brought action for determining legality of system with regard to
sales of pharmaceutical products. These products are sold by pharmacists only or in the presence
of pharmacists. The court was required to make determination possible where the contract come
into existence. It was held by the court that goods on the shelf constitute an invitation to treat not
an offer(Sewu, 2019). A customer takes the goods to the till and makes an offer to purchase. The
shop assistant then chooses whether to accept the offer. The contract is therefore concluded at the
till in the presence of a pharmacist. Spencer v Harding in this case defendant has been
advertising for sales by tender of stock in trade belonging Eilbeck & co. In this advertisement
specifies about the goods that can be viewed at the time of opening for tenders and that goods
requires to pay cash for it. In this no reserve was stated and claimant submitted highest tender but
defendant refuses to sell it another person. The court held that advertisement has been specified
in relation to highest tender that accepts with no obligation of selling person submitting highest
tender. The advertisement only amount over invitation to treat and tender was an offer which is
chosen in relation to acceptance and offer. Heathcote Ball v Barry the claimant has been
submitted over highest bids at an auction which has been stated to be without reserve. The item

were two Alan Smart engine analyser which were worth £14,000. In this claimant has submitted
bids of £200 each. The auctioneer refused for selling price at such price. The claimant has
brought and action for breach of contract upon damages of claim of £27,600. In this case court
held that claimant is entitled over damages at the place where auction takes place without reserve
the auctioneer making an unilateral offer is accepted by submitting the highest bid(Hair, Wood
and Sharland, 2019). It was this binding contract and the claimant entitled over damages
covering the loss of bargain. Carlill v Carbolic Smoke Ball Co Mrs Carill purchased some smoke
balls and used them as per the directions and caught flu. The sought to make claim which stated
to be of £100 reward. In this defendant has been raising following the demonstrate advertisement
that is a mere invitation to treat rather then an offer. In this advert was a sales puff and lack intent
to be an offer(Sobkowiak, 2018). It is not possible to make an offer to world. There was no
notification over acceptance and the wordings were to vague over constituting an offer since it
was no state limited as to catching of flu. Then there was non consideration that has been
provided since 'offer' did not specify that the user of the balls must have purchased them. It was
held in the Court of Appeal that Mrs Caroll has been entitled to reward as an advert and
constitute an offer within unilateral contract that is accepted by performing conditions stated in
the offer and court rejected arguments put forward by defendant.
These cases has made sure that all kinds of aspects in relation to invitation to treat has
been covered which shows that offer has been made but no acceptance is shown which makes no
valid contract exists within the above scenario.
PART 3
With reference to relevant legislation, explain the sources of the director’s authority to act on
behalf of a company. How are third parties affected in case a director acts outside his
authority?
Company law these are the laws that has been used in order to make all kinds of
perspective in relation to corporate organizations working with more effectiveness. These laws
has been dealing with various operations of business which is handled with more efficiency. The
law covers its perspective Companies Act 2006 making an business organization work in more

effective manner. The act has made various kinds of important things covered they are as
follows:
 The incorporation process for new companies has been simplified(Greenleaf, 2018).
 Many company duties and submissions can now by fulfilled electronically, as can
communications with shareholders.
 Company directors’ duties have been codified for the first time, including an obligation to
promote the success of the company, to consider the community and the environment, the
interests of employees, and to be fair to shareholders.
 Indirect shareholders have more rights, including the right to sue the company’s
director(s) if fraud or negligence is suspected.
 Nominee shareholders can elect to receive company information electronically if they
wish(Wallinga, 2019).
 Limited companies are no longer are required to have a company secretary, and can be
run by one director.
 The company naming rules have been upgraded.
 Company directors can now provide a service address, in order to keep their residential
address off the public record.
 Companies can use new ‘model’ Articles of Association, provided by Companies House.
 Private companies are no longer obliged to hold an Annual General Meeting (AGM).
 The share capital rules have been simplified for private companies.
 The legislation supersedes the Companies Act 1985.
Through these key aspects there are various duties of directors which has been given as follows:
These key duties are contained in the Companies Act 2006:
Duty to act within there powers which should be related to companies constitution. Duty
to make promotion done in relation over organizations success of an organization(Burke and
Cowling, 2020). This is based upon interest of an organizations employees community and
environment the organizations reputation and organization's members. Duty to exercise
independent judgement which helps in taking decisions which is related to positive development
of an organization. Alos main duty of director is related to reasonable care, skill and diligence

which is based upon employee's wellness and well being. Also directors has duty for avoiding
conflict over any particular interest. A duty not to accept benefits from third parties – to avoid
potential conflicts of interest, and accusations of bribery, for example(Giubboni, 2018). A duty
to declare interest in proposed transaction or arrangement – again, to minimise any potential
conflicts of interest. Then comes financial responsibility which is used for making sure that an
organizations amounts over an accurate decision which is financial in nature and is related to tax
which has to be submitted within time. This is mots likely for undertaking preparation work and
submitted over relevant form making work to be submitted forms where directors ultimately
responsible within law. There are certain other responsibilities which are statutory and financial
duties of an organization that includes complying with current law relate to hiring and treating
employees. Ensuring that an organization is able to accomplish Health and Safety regulations.
Ensuring that the company is adequately insured. Some types of insurance cover may be
mandatory(Zhu and Xing, 2019).
All these duties is required to be followed by the directors in order to make sure that an
organization work in more effective manner. In this all kinds of aspects regarding different
process of organization. Also the directors is able to improve organizations performance helping
in accomplishment of goals and objectives in more effective manner. These duties leads over
making organization deal with various problems and issues that can impact business growth and
stability. Thus the duties have drastic effect upon business and makes directors work as per legal
perspective that has been taking place within an organization.
CONCLUSION
From the above discussion it can be concluded that business laws are the laws that has
been helping in making business organization establishes and run without any legal issue which
has been faced by an organization within country. Also these laws has been dealing with various
kinds of business organization that operates under the law. Further, in these laws contract laws
are used which helps in making and organization operate legal with legal agreements created in
relation to business transactions. In then end directors and there various duties has been

explained with more effectiveness making business organisation deal with perspectives of
corporate organizations.

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