Law for Business Managers: Contracts, Negligence, and Employment

This report delves into critical aspects of business law, providing a comprehensive analysis of contracts, negligence, and business mediums. It begins by defining contracts and outlining the essential requirements for a valid contract under English and Welsh law, followed by an examination of Ringo's liability in a contractual dispute. The report then explores the criteria Jerry would need to satisfy in a negligence action, detailing the elements of duty, breach, causation, and harm. Furthermore, it identifies and evaluates various business mediums available to Ringo and his friends, discussing their respective advantages and disadvantages. Finally, the report emphasizes the importance of correctly identifying the employment status of workers, offering valuable insights for business managers on legal compliance and risk management. The report uses case studies and legal principles to illustrate key concepts and provides practical recommendations for business operations.

Law for Business
Managers

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1 (a). What does a contract mean and what are the essential requirements to form a valid
contract as per law of England and Wales?................................................................................1
(b). Would Ringo be liable to pay Paul based on the facts above?.............................................2
2. Discuss the criteria that Jerry (as the claimant) would need to satisfy in an action for
negligence...................................................................................................................................3
3. Identify the main business mediums available to Ringo and his friends John and Yoko and
the advantages and disadvantages of each of these mediums.....................................................5
4. Discuss why it is important for Ringo, John and Yoko to identify the correct employment
status of any workers that they recruit for their business............................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Legal system in a country is a set of legislation, rules and regulations enacted in order to
provide a direction in which all the activities are to be conducted. The main aim of law is to
assist individuals and business organizations to conduct the activities lawfully (Brown and Nagy,
2015). This assignment covers the aspects of ethics, code of conduct and regulations
implemented and makes it compulsory in the scenario of negligence, contracts and agreements,
different types of entities along with suggestions of several kinds of business. Furthermore, it
includes a case study which has been resolved with the use of relevant laws and acts to how these
can be used in managing the operations of business organizations. In addition to this,
recommendations have also been covered for investing the fund in a particular business type by
considering the statutes and regulations implemented throughout UK.
MAIN BODY
1 (a). What does a contract mean and what are the essential requirements to form a valid contract
as per law of England and Wales?
Contract law can be termed as a foundations for all commercial transactions or dealings
involved in an organization. The impact of such law is huge on the business operations as it
provides the directions or guidance to carry and completed a an activity or work. Every business
types enter into contracts to carry the dealings in an ethical manner without breaching any clause
or term (Bruneel and et. al., 2012). All the conditions given in a contract must be fulfilled by
both the parties and if a single or more than one clause is breach by either of the parties, then it is
termed as breach of contract. Furthermore, it is of two kinds viz. Written and verbal. The law
governing the contracts has been enacted for protecting the parties against any misconduct,
breach or fraud etc. Also, it acts as an evidence which can be submitted in case of any disputes or
conflicts resulted due to the contract. However, there is a pre-requisite to this, that a it must be
valid contract made by including all the essential conditions as provided by the contract act.
Some of the elements which should be incorporated in a contract to make it valid are as follows:
Offer- It is the first element in which an offer is made by the offeror to the offeree. It is a
promise which should be there in a contract to make is validly acceptable. In simple terms, offer
implies the terms and conditions of the contract which is put before the offeree.
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Consideration along with negotiation- This is about the value to be exchanged for the
goods or service mentioned in the contract. Also, the parties should adjust the terms according to
their wishes and desires but with mutual consent. This is known as negotiation and both of these
are important features in a valid contract.
Acceptance- An offer must be accepted by the other party. This is called acceptance
which must be clear with the rules and regulations. Also, it can be in writing or even made
orally. After the acceptance is made, the terms of the contract become binding on the parties
(How to form a valid contract, 2018).
Legal relation- Every contract must contain an intention to create legal relations. In case,
there is no intention to form a legal relation then it must be subject to a lawsuit. It provides a
protection to the parties against any breach. Also, legal actions can be sought and innocent party
can claim compensation.
Validity- This implies that the contract should be formed by following all the applicable
laws and rules on the contract. Without complying with these, there will not be a valid contract
therefore, it cannot be enforced in the court.
In nutshell, it is very important to prepare a contract by incorporating all the essential
terms and conditions to make a valid contract. In case, one or more than one element is not
included then such a contract is treated void and null which has no enforceability. In addition to
this, it is duty of the parties to go through all the details and clauses in order to avoid any mistake
which can make the contract void or invalid.
(b). Would Ringo be liable to pay Paul based on the facts above?
The case given states that there are two parties viz. Ringo (father) and Paul (son) who
have executed a valid contract. The offer was made by the son to his father in exchange of a
payment to be paid after the work is completed. Furthermore, it was accepted by Ringo which
made it a valid contract on the acceptance.
On analysing the case study, it is noticed that father has breached the contract by not
paying the amount so decided in the contract. Ringo clearly denied the payment to his son Paul
even when he completed the work as per the contract (Cuervo-Cazurra, 2016). One thing to be
observed is that it was a verbal contract which is absolutely a valid contract and cannot be
termed invalid on the grounds of not being in writing.
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The terms specified that Paul was to carry the work of mowing the garden in exchange of
a payment of 10GBP. Prima facie the case is about breaching the contract. If this is dragged in
the court, then burden of proof would lie on Paul to prove that a contract was valid contract was
there between them and it was breached by his father, Ringo. Hence, it can be concluded that
Ringo is liable to pay Paul as the breach was made by Ringo himself.
2. Discuss the criteria that Jerry (as the claimant) would need to satisfy in an action for
negligence
Negligence can be defined as the act of not taking adequate or reasonable care to avoid
causing injury or loss to another person. In other words, it refers to situations whereby some acts
may cause loss or injury to any person who is involved. The general condition or requirement is
to comply with all the norms in order to provide the service as per the demand of the customer.
Furthermore, professional negligence is breach of the duty of care between professionals and
their clients. It is unethical as the outcomes can make the person suffer from financial as well as
physical loss. The people providing services are required to follow certain standards and
maintain professionalism in the profession. This can cause a person to file lawsuit or take legal
actions against the company and also the practitioner. It can be judged on the basis of four
elements which are as follows:
Duty is the word which reflect the charge or the accountability of practitioner in which is
expected to be completed or provided without committing any mistakes or fault. Every service or
work should be completed without leaving any scope of mistakes. The professional are the
people who should keep in mind about the image and reputation of the organization while
completing the work. It has direct relationship with the demand or need in the market about the
work or the service (Hansmann and Kraakman, 2017).
Breach is a contravention of or not following the code of ethics or code of conduct or
negligence causing breach of contract. When a contract is made, it is expected that all the terms
should be fulfilled without making any default. In this, the breach is about the authentication as
negligence has been made due to which the conservatory destroyed. Hence, the duty has been
breached causing huge loss to Jerry. When either of the parties to the contract fails to comply
with the terms mentioned in the contract.
Apart from this, there are two more elements which define the liability to prove the
damage or negligence which have been explained below:
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In cause is the state which requires client to provide evidence of the mistake or damage
made by the practitioner or professional. One of the conditions is that mistake has been done by
the one providing the service. In case, any compensation is to be claimed from the company,
then it will be on the part of the client to prove the damage or loss by making the concerned
professional liable for the mistake. It focuses on proving the case.
In harm includes damage due to the negligence of person should be provided by client.
There could be numerous damages such as damage to client's property or image/reputation. This
provision provides ways through which compensation can be claimed so that damages can be
fixed which has resulted on the property or the image (Hayden and Bodie, 2012). It calls for
physical, mental or social damage to the clients property by which case can be filed in against the
practitioner's company.
Furthermore, negligence can be categorised into different kinds with their own
characteristics. The types are as follows:
Contributory negligence is the outcome when the person accountable for the work fails to
exercise reasonable care for their safety. In other words, mistake or damage is made by the
professional responsible for providing service. However, an important fact is that client is
already aware about the damage and forgot to notify the worker regarding it. This is the case in
which the liability is of both the parties wherein it is difficult to claim the compensation due to
the liability on the both sides. In simple terms, it is the duty of the owner or the client to provide
the information about the possible damages to the worker so that negligence can be avoided.
Comparative negligence is also known as non-absolute contributory negligence which
makes the liability to reduce or decrease. This is possible because none of the parties is liable
completely for paying the compensation for the damages. Also, the negligence on the part of the
practitioner is treated as the first stage of initiation of causing harm to the property. The
proportion in which the liability is divided is half i.e., half of the liability occurs in the part of the
client and half to be paid by the professional as it is assumed that mistake is the outcome due to
negligence for not following the guidance by both the parties (Johnson, 2012).
Gross negligence is the voluntary in nature which occurs due to extreme negligence in
following safety to others. The magnitude of the mistake is severe which resulted into failure to
act. Generally, the amount of the compensation is huge in this because of the high recklessness
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or carelessness that has caused damage to the property or injury to the person. Furthermore, the
award may include punitive damages in order to put strict liability on the wrong doer.
By analysing the matter presented above, it can be said that Jerry is absolutely liable to
claim compensation from Elixir Gardens for the damages caused to the property due to the
Negligence of George. With all the circumstances, the case can be proved by providing evidence
regarding the mistake. It was the duty of George to measure the distance of the conservatory in
order to protect it as well as cut down the trees without causing any damage to the property.
Also, it was his duty to do the work patiently without rushing to the work in order to leave for
the home by 5PM. This was the main reason for doing the work inappropriately which caused
the damage to Jerry's property. It can be treated as gross negligence because there was serious
carelessness and in such as situation, practitioner is held liable. In this case, George is
responsible for the damage which is caused by immense negligence hence, the company shall
pay the amount of compensation in order to recover the damaged property.
3. Identify the main business mediums available to Ringo and his friends John and Yoko and the
advantages and disadvantages of each of these mediums
A business can be set up in different organizations based on the requirement and capital
available with the owners. In the current scenario, Ringo was carrying the business as a sole
trader, when his friends John and Yoko joined the it. Therefore, they can opt for any of the types
for investing their funds in order to earn profit. Before establishing a new entity, it becomes
imperative to have the information and knowledge about the laws, regulations and standards
which might affect the business (Kolk, 2016). In addition to this, their pros and cons should also
be considered for making the final decision. Thus, different kinds of business types or mediums
that are available to them are presented below:
Sole proprietorship- It is the business type which is is generally small in size and owned
by a single person called owner. There is no requirement to register the entity and the profit or
loss is also not shared. It is easy to manage as the whole administration is done by the owner
only. It has limited sources for raising the funds which do not include investors. It has
advantages and disadvantages as follows:
Advantage: It is easy to set and dissolve also the paperwork and other formalities are less
as compared to other kinds of business.
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Disadvantage: The losses are not shared. Furthermore, there is no right to sue the name
of the organization because the entity and owners have no separate identity.
Partnership firm- It is an association of persons who establish the business with motive
of making profit. The partners execute a partnership deed which governs all the activities. It is
easy to manage the operations of a partnership firm which requires two or more people to form
it. Furthermore, it has greater flexibility which makes it easy to perform the tasks involved in
this. Pros and cons of this entity are mentioned below:
Advantage: The amount required for setting it up is very low. In other words, capital
requirement is low (Macey, 2013).
Disadvantage: The partners or the firm do not have the right to sue or be sued by using
the name of the entity. Apart from this, partners have limited liability.
Limited Liability company- The features in this entity comes from a company as well as
partnership. It is a hybrid form which is made by combining the characteristics of both of these.
It is a preferred type of business in which the work is easy to manage and perform. Since, it
mixes two different kinds of organizations, it is liked by many people for establishing their
business. The advantages and disadvantages are provided below:
Advantage: The operations are carried as per the legal provisions provided by Company
law. This helps in providing a legality in the business for running the business smoothly.
Disadvantage: There are increased legal and financial formalities which contributes to
higher cost and expenses.
Company- It is an artificial judicial person having a separate legal entity distinct from its
members. The existence is not affected with the death, removal or bankruptcy of the owners. It is
called perpetual succession which keeps it alive. It is expensive to incorporate and the
registration is compulsory (Nielsen and Parker, 2012). Furthermore, the liability of the company
is divided into two types viz. Limited by shares and limited by guarantee. The decision making
is done by the directors who are appointed for the management of the affairs. Since, it has to
comply with all the legal provisions and rules of Companies Act, 2006, the operations are carried
lawfully which minimise the errors.
Advantage: Members have limited liability as well as perpetual succession which gives
the authority to the law only to wind it up.
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Disadvantage: The formalities are huge which takes number of months in making a
single decision. This affects the profit and revenue.
Hence, it is recommended that Ringo and his friends should invest the funds in
partnership firm which will offer them to have equal power to make decisions. Furthermore, the
business can also be taken to a new level by converting the business entity. Also, the partners are
held liable for the acts and negligence of other partners. The decision making is usually a rapid
procedure which automatically lowers the cost and increases the efficiency of the firm.
4. Discuss why it is important for Ringo, John and Yoko to identify the correct employment
status of any workers that they recruit for their business
Selection process- This is the beginning of choosing candidates who will be suitable for
the entity. It is done by following selection process which comprises of number of steps and
examination in order to judge the skills, talent, confidence and knowledge on the basis of which
the final result is obtained (Pearce, 2013). Some of the things which are analysed are
communication skills, background, qualification, knowledge, competencies and many more.
Furthermore, every company can choose their selection process accordingly. The possible steps
which can be taken by Elixir Gardens for selecting the appropriate individuals are as follows:
Application process: The whole procedure begins by filling the form. It contains name,
residential address, qualifications, interest, goals, reason to join the organization. This gives a
clarity to the company about the skills and ability of the the individuals to tackle the difficult
circumstances. Furthermore, the entity can shortlist the candidates according to the specifications
and requirements.
Screening applications- This step is about selecting the application forms on the basis of
age, gender, experience, knowledge etc. The filtration of the candidates makes the company
closer to choosing suitable employees. Interview is the most common method which is used in
which a close observation given to the applicants appearing for it.
Employment test- The candidates chosen on the basis of interview are proceeded further
for the test in order to know the conceptual and analytical skills. Every entity may keep their
individual criteria and credential in this test. It can be conducted in any form such as written,
verbal, practical or technical test (Rong and et. al., 2012). The applicants qualifying the test are
chosen for further rounds.
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Second round- The above rounds do not stop with the aptitude test. Individuals who have
cleared all the preliminary rounds are enrolled for employment interview. The main aim is to
obtain comprehensive and more details about the candidates in order to have more clarity about
the skills. It can be taken directly as well as indirectly.
Medical examination- It is an important examination which by which organization can
know about the health conditions of the individuals (Schoonjans, Van Cauwenberge and Vander
Bauwhede, 2013). Being unfit for the job can be a ground due to which a person can be rejected.
It is not only restricted to the physical parts but includes mental state as well. There should a co-
ordination of these two in order to perform the assigned tasks accurately and efficiently. Majority
of the entities like to start the whole procedure with this which saves times and cost. However,
there are companies who may not considered it as an significant criteria for judging the
suitability of the candidates.
Final selection- This whole process mark closure with this step in which candidates have
cleared all the above rounds. With this, the name of eligible individuals are given to the
company. Following this, appointment letter are prepared and given to all those who have been
selected in the organization. This is to inform the candidates from which date they are required to
join their respective job positions. It is an official letter giving them authority to work as an
employee of the company. However, there is no compulsion on them to join. It totally depends
upon them to work in the concerned entity or not. However, the confirmation must be provided
by the joiners (Stewart and Hitt, 2012).
It is recommended to Elixir Gardens to choose the right candidate by including all the
above-mentioned steps. The benefit will be that eligible employees can be appointed who can
work efficiently and without making mistakes like Jerry did in this case study. Whenever a staff
does something wrong, it causes monetary loss along with destruction of public reputation or
goodwill. This reduces the chance errors in future due to application of skills and knowledge by
the qualified employees. Therefore, Elixir Gardens are expanding business who clearly in
demand for good practitioners in garden grooming to provide excellent and qualitative results
and increase profit ratios.
CONCLUSION
From the above report, it has been concluded that every person or entity should take
reasonable care while executing the contract. It is suggested that, every detail should be verified
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in order to assess the all the clauses entered into it. This is to avoid any breach or contravention
in the future which can cause damage or additional burden. Furthermore, different types of
entities can be considered for making investment in order to carry the business. Also, there
should be adequate knowledge about the law and rules which are applicable on the companies
and employees working in there. Furthermore, every organization should set its own recruitment
procedure in order to get suitable employees for getting number of benefits.
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REFERENCES
Books & Journals:
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Bruneel, J. and et. al., 2012. The Evolution of Business Incubators: Comparing demand and
supply of business incubation services across different incubator generations.
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Hansmann, H. and Kraakman, R., 2017. The end of history for corporate law. In Corporate
Governance. (pp. 49-78). Gower.
Hayden, G. M. and Bodie, M. T., 2012. The Bizarre Law and Economics of Business Roundtable
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Johnson, L., 2012. Pluralism in Corporate Form: Corporate Law and Benefit Corps. Regent UL
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Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Macey, J. R., 2013. Corporate Social Responsibility: A Law & Economics Perspective. Chap. L.
Rev. 17. p.331.
Nielsen, V. L. and Parker, C., 2012. Mixed motives: economic, social, and normative
motivations in business compliance. Law & Policy. 34(4). pp.428-462.
Pearce, J. A., 2013. Using social identity theory to predict managers’ emphases on ethical and
legal values in judging business issues. Journal of Business Ethics. 112(3). pp.497-514.
Rong, J. and et. al., 2012. A behavioral analysis of web sharers and browsers in Hong Kong
using targeted association rule mining. Tourism Management. 33(4). pp.731-740.
Schoonjans, B., Van Cauwenberge, P. and Vander Bauwhede, H., 2013. Formal business
networking and SME growth. Small Business Economics. 41(1). pp.169-181.
Stewart, A. and Hitt, M. A., 2012. Why can’ta family business be more like a nonfamily
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Online
How to form a valid contract. 2018. [Online] Available Through:
<https://www.rocketlawyer.co.uk/article/how-to-form-a-valid-contract.rl>
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