Business Law Report: Contract, Insolvency, and Financial Difficulties

This report delves into key aspects of business law, offering a comprehensive analysis of contract breaches, including breaches of warranty and conditions, and their impact on contract termination. It explores legal procedures for handling financial difficulties, critically evaluating legal solutions against alternative advice. The report further compares legal solutions to insolvency in the United Kingdom and Poland, examining their differing systems and effectiveness. The analysis covers insolvency procedures, including liquidation, schemes of arrangement, and company voluntary agreements, alongside bankruptcy and restructuring acts, highlighting the importance of legal obligations and proceedings in managing financial crises and preventing disputes between debtors and creditors. The report emphasizes the significance of risk management, financial counseling, and the implementation of effective legal strategies to mitigate financial instability.

Business Law

TABLE OF CONTENTS
Section one.......................................................................................................................................1
Explaining terms a breach of Warranty and breach in conditions and its effect in termination
of contract....................................................................................................................................1
Section two.......................................................................................................................................2
Legal procedure in case of financial difficulties and use of legal advice as compared to
alternative methods.....................................................................................................................2
Section three.....................................................................................................................................2
Comparison between various legal solutions to insolvency with regard to various countries
legal system.................................................................................................................................2

SECTION ONE
Explaining terms; a Breach of Warranty and Breach of conditions and their effect on potential
termination of a contract.
In a contract, breach of warranty and a condition are two major factors that are required
to be taken in consideration by firm that helps in suitable rise in operational capability and
functionality of a business entity. While a warranty is formal contract in between a seller and
buyer that helps him to get assurance that product is genuine and in a working condition. On
other hand, a condition is clause or term that is been placed within contract which is related to
maintenance of business relation in between two parties in an agreement.
A Breach of Warranty is situation when product or service purchased by person is either
damaged or discontinued before completion of warranty period. In such case, buyer is liable to
get products or services replaced or get suitable claim for inconvenience caused to customer by a
business entity. On other hand, Breach of Condition is situation when a clause or regulation
described in an agreement or contract is avoided or not followed. This causes termination of
contract and failing of legal agreement in between concerning parties.
In both conditions, business relation gets affected. While in case of Breach of Warranty,
conditions in an agreement are not affected. On other hand, Breach of Condition causes
termination of contract, impacting dissolution of warranty applicable on a product or service.
Various measures can be taken in consideration to prevent termination of contracts in case of a
dispute such as:
 In case of Breach of Condition, party breaking contract has to give out proper claim to
other members in agreement. If party wants to continue agreement, contract has to be
renewed in order to mitigate chances of loss.
 In situation of Breach of Warranty, party has to be provided with either proper
replacement of products and services or with claim in order to cover losses.
SECTION TWO
Legal procedure in case of financial difficulties and critically evaluating use of legal solutions in
comparison with alternative advice.
The legal procedure to handle financial difficulties by a firm will include following
considerations:
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 Defining risk boundaries and point out to determine the worst situations
 Proper diversification of risks by having more suppliers to meet operational needs
 Transferring of risk into other entities that help in increasing responsibility insurance
property insurance etc.
 Creation of cash reserves in order to meet financial requirements of firm.
legal obligations that are been taken in consideration in such situations are as follows:
 Reduction of extent of indebtedness by reducing expenses and wastage of resources at
workplace.
 In case of inability to pay debts and carry out financial operations any further, person can
opt to file for bankruptcy.
The legal management of the financial crisis that is been faced by the firm will involve
the following critical steps for better handling of situations.
 Identification the cause of crisis
 Accessing the reason that lead to financial shortage.
 Short-listing the major causes and finding suitable legal solution to it.
 Implementing it in order to reduce the chances of further loss.
Other than this, the financial counselling will also prove beneficial for firm.
SECTION THREE
Comparison between various legal solutions to insolvency in at least 2 European countries with
evaluating differing systems and their effectiveness.
The effective comparison between legal solutions for insolvency among various countries
is as follows:
United kingdom Poland
To meet issues related to insolvency, UK
follows Insolvency Act 1986 and Company
Directors disqualification Act 1986.
In Poland, insolvency is managed by
Bankruptcy law and Restructuring Act that
help in getting proper financial stability.
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Besides this, EC regulations for Insolvency
proceedings is been followed.
In this, debtor or creditor has to get approval
from court for arrangement.
Major procedures for insolvency are
liquidation, scheme of arrangement and
company’s voluntary agreement.
The bankruptcy proceedings involve initiation
of procedure, setting of main criteria, and
possible outcomes that can be received from
process.
On personal level, procedures like declaration
of bankruptcy and debt arrangement schemes
can be followed.
Other than this, investment funds, remedial
proceedings and accelerated arrangement
proceedings are followed by firm to manage
insolvency problem.
In both countries, legal system involves effective management of wide range of business
operations that impacts business firm and thus, it is required to be managed with effective legal
obligations and proceedings with helping individuals or a firm to manage conditions of financial
crisis or difficulties. Besides this, it also prevents issues related between debtor and creditor.
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