Legal Aspects of Business Management: A Case Study Analysis

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LAW FOR BUSINESS MANAGERS

Contents
INTRODUCTION.......................................................................................................................................3
1. A..........................................................................................................................................................4
CONTRACT...........................................................................................................................................4
FORMATION OF CONTRACT.................................................................................................................4
OFFER:.................................................................................................................................................5
ACCEPTANCE:......................................................................................................................................5
CONSIDERATION:.................................................................................................................................5
INTENT:................................................................................................................................................5
CAPACITY:............................................................................................................................................5
1.B...........................................................................................................................................................6
2...............................................................................................................................................................8
ACTION FOR NEGLIGENCE.......................................................................................................................8
DUTY OF CARE.........................................................................................................................................8
BREACH....................................................................................................................................................8
CAUSATION..............................................................................................................................................9
REMOTENESS...........................................................................................................................................9
DAMAGE..................................................................................................................................................9
3.............................................................................................................................................................10
UNINCORPORATED LEGAL BUSINESS MEDIUM.................................................................................10
INCORPORATED LEGAL BUSINESS MEDIUM......................................................................................11
ADVANTAGES AND DISADVANTAGES OF BUSINESS MEDIUMS.........................................................12
4.............................................................................................................................................................13
IMPORTANCE OF EMPLOYMENT STATUS FOR BUSINESSMAN..........................................................13
CONCLUSION.........................................................................................................................................14
REFERENCES..........................................................................................................................................15

INTRODUCTION
Law is defined as the set of rules that are designed by government bodies and everyone must
follow the rules and regulations. The motive behind the making of law is to work and live with
peace and safety and higher government officials are responsible for making peace and safety
everywhere in every kind of work. Commercial law or Business law is defined as law which is
governed for maintaining rules and regulations in a business or commerce. These laws are
considered as a branch of civil law helps in dealing with matters related to private and public
law. Commercial law regulates laws which related to the corporate contract, terms and condition
of hiring, manufacturing and sales of goods it deals with business dealing and manpower
included in the business. This assignment is based upon business there is a contract for selling of
garden between Ringo and Paul, Later on, this contract comes to an end and Ringo decided to
expand his business with his two partners and undergone managerial contract for carrying out
business (Beatty et al.,2018).

1. A
Contract and requirement of a valid contract as per the law of England and Wales
CONTRACT
Contract is a written or oral agreement between two or more than two parties which is imposed
with the force of law. Contract is always legal because it is enforceable with the help of law and
meets the requirements of a valid contract. A contract is always followed by an agreement, when
there is a contract between two parties it comes with an agreement, the agreement is an exchange
of documents between two parties determine the terms and condition of a valid contract. A
contract is there when there are sales and purchase of goods and services. To protect buyers and
sellers from fraudulent activities in an organization it is mandatory to business under terms and
condition of the contract. For any kind of business for its proper functioning, it is good to go with
a contract for doing trade and associate activities like a partnership, employment, maintaining a
relationship with the tenant and performing activities of sales and purchase of goods and
services. As per the law of England and Wales formation of a contract requires an Offer,
Acceptance, Consideration and mutual intent to bound. Every partner entering in a contract
should have the capacity to fulfil the terms of contract (Poole 2016).
FORMATION OF CONTRACT
Contract law of England and Wales in the UK consist of laws also rules and regulations related
to trade in England and Wales. Some changes are there in European law because of UK
membership of the European Union. As stated by government bodies agreement that is imposed
with the help of law contracts, in every contract it is not necessary to pay the compensation, but
in case of loss of property, unclean environment, harm to peoples right in that case parties are
liable to pay compensation. Law for tort, restitution and unjust enrichment are included in
Contract law of England and Wales(Austen-Baker 2017). It is observed a contract is formed
when both the parties accept the offer of each other. Big contract in England like sales of land is
done with some formalities of signatures in the presence of a witness. An English law goes
beyond laws of other European countries as they need consideration from both the parties and

authorized agencies deal with terms and condition of contract for both the parties. Some
necessary elements of the contract are discussed below:
OFFER: As per contract law Offer is defined as it is a promise which is exchanged by two
parties and it is mandatory as per the terms of the contract. As per suitability of parties, an offer
can be terminated or declare void as per conditions and at times if possible it is negotiated. As
per the law, an offer is valid when the terms and condition of the offer are clear(Austen-Baker
2017).
ACCEPTANCE: As per contract law it is up to the parties whether they will accept the offer or
not. Acceptance of an offer is there when both the parties with mutual consent accept and bound
by terms and condition of an offer by exchanging something such as money or confirmation of
the deal. Agent who is a mediator between both the parties is liable communication between
both the parties.
CONSIDERATION: As per Contract law consideration in a contract is done in exchange for
consideration, both the parties bargain and agree on one common point that point is considered
as consideration as per Contract law. Consideration must be valid and should satisfy the
conditions of the contract (Beale et al., 2019).
INTENT: As per contract law intent is defined as the parties intend to enter into the contract,
parties agree to do a particular act as per the agreement. When both the parties accept
obligations of the contract considered as their intention of accepting the contract.
CAPACITY: As per Contract law capacity is defined as the legal ability of a person to enter into
the contract by following terms and condition of agreement in a contract. Party should be
legally competent to enter into a contract. It is mandatory that parties which are entering into a
contract they are of sound abilities to fulfil the contract (Beale et al., 2019).

1.B
Is it mandatory for Ringo to pay Paul .
With the help of analysis of case study it is found that following are the points for to form the
contract :
OFFER: Ringo father of Paul offered his father to reduce the price of the lawn by £10. This is
the example of an offer, paul asked his father for a decrease in price. Here two parties are there
in contract paul and Ringo, Paul who offer service to another party Ringo who entered into
contract receive the offer given by Paul. Therefore this contract is valid and enforceable as per
the law.
ACCEPTANCE: Offer is given by Paul to accept the services for at £10 for moving the lawn
to his father Ringo and Ringo accepted Pauls offer and given his consent to accept the offer
therefore it contract is legal and valid as per the law(Beale et al., 2019).
CONSIDERATION: According to the case study it is clearly understood that Paul has given
offer to his father Ringo to give £10 for moving of land to Paul. in this case Ringo consider the
Paul services of moving land and in exchange of £10 Ringo get his land moved by Paul this is
Consideration as per contract law and it is legal.
INTENT: As per the contract law there oral contract between Paul and Ringo for moving of land
and in exchange of services of moving land Ringo is giving £10 to Paul. The intention of Ringo
and Paul is clear for entering in an oral contract. Therefore in this situation contract is
enforceable as per the law.
CAPACITY: As per the given case study both the parties Ringo and Paul who are bounded in
an oral agreement and thus form a contract, both the parties are having ability Paul is a
university student thus can take his own decision. Both the parties are fulfilling terms of
contract(Beale et al., 2019).

FORM: It is observed with the help of a case study that contract between Paul and Ringo is an
oral contract. As per the agreement Paul mov, the land at a given time but later on Ringo
refused to give £10 to Paul, this is the breach of contract as Ringo did not fulfil the terms and
condition of the contract (Beale et al., 2019).
.

2.
Criteria for Jerry act as claimant had to satisfy action for negligence.
Facts observed from case study:
 George is an employee works in Elixir Garden.
 Jerry is customer demands services from Elixir Garden for landscaping.
 George is the person who is landscaping Jerry’s garden, George is doing his duty of
landscaping in Jerry's garden.
 While doing work George forgets to count the approx. fall of trees some controversy
arises due to falling of tree unknowingly which cause damage and Jerry is suffering from
loss.
ACTION FOR NEGLIGENCE
The action of negligence is there when there is a breach by the defendant who takes care there is
damage in a property while doing work. In the given case study defendant is George and Elixir
garden and the claimant is Jerry. Negligence is said to prove when Jerry established the duty of
care and legal causation to damage caused. In the case of negligence, a claimant is responsible to
present proof for the case to prove the balance of profitability (Berry 2017).
DUTY OF CARE
Duty of care defined as the legal obligation for the safety of others, a duty of care is imposed on
an individual when an employee is performing his duty and is responsible to work with care and
safety as this could harm others in any way. Duty of care is the element of action of negligence.
According to this case defendant under an obligation has the duty of care. George is landscaping
Jerry’s garden as an employee of Elixir Garden and it results in some damage to property as
George forget to measure the falling trees and in a hurry, this loss happens. In this case, the
three-stage test is imposed as a case of the legal duty of care (Berry 2017).
BREACH
As per the case, it is seen that George is an experienced and expert in landscaping and working
with Elixir garden but he forget to measure the fallen trees and in hurry, there is damaged caused
to jerry's property. A breach in contract law is determined as the if there is a breach as a standard

set of care which is defined in Donoghue v Stevenson[1932] AC 562, as George failed to
maintain the standard set of care.
CAUSATION
It helps in identifying the reason for the breach of contract, is damage is the cause of the breach
of contract. George cause for the damage is the reason for the loss of Jerry’s property. This case
is all about legal causation because there is direct damage to Jerry’s property by George work.
Factual causation applied with “But for Test” from the case11Barnett v Chelsea &
Kensington Hospital Management Committee, [1968] 3 All ER1068 (Berry 2017).
REMOTENESS
According to the case study damage cause to Jerry’s property is unforeseeable. George knows
earlier that trees could tumble on the building and it will create controversy nut then too in hurry
George forget to measure the distance of fallen trees towards a building. Therefore, in this case,
property damage is considered as foreseeable.
DAMAGE
As per the case, Jerry suffers an economic loss due to George mistake, therefore, Jerry can claim
for compensation from Elixir Garden as George work as an employee of Elixir Garden and
contract is established for the services offered. Compensation for the damaged part could be
claimed which is mention in the case of Spartan Steel & Alloys Ltd v Martin & Co
(Contractors) Ltd [1973] 1 QB 27 (Egbchue, 2012).

3.
Find out the business medium for Ringo and his friends John and Yoko, also mention
merits and demerits for the business medium
Till date, Ringo is a sole trader as he individually running his business of landscaping and
gardening of Elixir Garden. Now Ringo has decided to do business with his two friends John and
Yoko to expand his business and to share the responsibility of employment and functioning of
the business. When other people added in business then this type of business is partnership this
change the structure of doing business. In UK alternative business medium is divided legally it
can be incorporated or unincorporated. Only the difference between incorporated or
unincorporated business medium is incorporated business is having separate legal entity opposite
to this is unincorporated business not having separate legal entity (Hillary 2017).
UNINCORPORATED LEGAL BUSINESS MEDIUM
An unincorporated business is legal and divided in three ways. The current business structure of
Ringo is he is the sole trader he individually does his business of landscaping Elixir garden.
Other two ways which are perfect to Ringo and friends for doing business is Partnership and
Limited partnership.
The partnership is a type of business medium where two individuals are legally bound by terms
of a contract where two or more peoples are legally bounded and share responsibilities of
management and profit also the motive of doing business of all the partners is same. There is an
agreement between all the partners which is legal and state terms and condition of doing business
which includes work and responsibilities, sharing benefits and easy sharing of profit and loss
amongst all partners of the business. Partners are responsible to collectively make further plans
for business and take important decision for the same, also important business transaction is
recorded carefully so that everyone refers it any time whenever necessary. All the partners bind
an obligation of paying taxes according to HMC (HM revenue and custom) (Hillary 2017).
A limited partnership has both a general partner as well as a limited partner. Difference between
general and limited partner is, the limited partner is not involved in managing their involvement
is only up to their invested capital in the company and they are registered firms. In case of any

change in management, terms of the partnership, way of doing business should be informed to
limited partners and updated as per Company House Gov.UK.
INCORPORATED LEGAL BUSINESS MEDIUM
An incorporated business medium like a limited company and Limited Liability Company is
suitable for Ringo and his friends.
Limited Liability Partnerships (LLP): It is that type of partnership where some partners have
limited liabilities or all the partners have limited liabilities as decided by management and leader
of an organization, therefore, it is said as limited liability partnership. Every partner is
independent, responsible and is not liable for any fault of partner negligence. In LLP kind of
business partners’ liability is limited up to his investment in the business. Partners are registered
as per HMRC and are taxable and they are also liable for annual returns as per Companies House
(Whittaker and Machell 2016).
Limited Company: It is that type of organization which is set up for running a business, in
limited company shareholders roles and responsibility in financial cases is limited for the value
of the shares they own but did not pay for this. In the case of a limited company, directors are not
responsible for the debts. It is a benefit to shareholders in this case their asset remain safe even
when a company is about to dissolve. As per Article of association, the company has the power
to control ownership, rules and decisions. A limited company is further divided into two parts
Private ltd. companies and public ltd. companies. Shares of a private ltd company are in hands of
the owner of the company and for public ltd. company shares deal in public market. There is a
difference in share and cost of operation of public ltd. company is higher. In the case of public
ltd. companies share of £50000 is needed. Limited companies must work with more directors for
managing finances and daily activities of the business (Ramanandham 2019).

MERITS AND DEMERITS OF BUSINESS MEDIUMS
Incorporated Business Mediums Unincorporated Business Mediums
Advantages
 Partners have limited liability and
individual legal status.
 Continuity in trading
 Tax policy of this business is earning
by trading (Ramanandham 2019).
 Business is controlled by the owner of
the business only.
 Creation and Operation of business are
easy (Hillary 2017).
 Rules and regulation are as per the
owner of the business.
Disadvantages
 The documentation process is lengthy
therefore the cost of documentation is
also high.
 Complete work of trading is not in
owners’ control, rules and regulation
should be strictly followed.
 Taxes are double as the company has to
bear income as well as corporate taxes.
 Owners are traders of the business and
have a full liability of doing business
and having only one legal entity.
 Financial institutions did not trust these
companies easily, therefore, it is hard to
get funds from financial institutions.
 Availability of capital is limited, a
company must issue share for funds
option, in case of the sudden demise of
owner continuity of business operation
suffer.