Business Law and Legal System Analysis Report: Unit 7

This report delves into the intricacies of the legal system and its profound impact on business operations. It begins with an explanation of the legal system, exploring its various sources, the role of government in lawmaking, and the application of statutory and common law to businesses. The report then evaluates the strengths and weaknesses of the legal system, followed by an examination of key legislation, regulations, and standards that new businesses must be aware of. It further analyzes different laws that businesses must adhere to, including contract law, laws of torts, copyright law, and employment law, and their potential implications. The report also provides a detailed overview of different types and classifications of business organizations in the public and private sectors, including sole traders, partnerships, and registered companies, along with their legal structures, advantages, and disadvantages. Finally, it discusses the management and funding of various organizations in both sectors, such as limited companies, social enterprises, corporations, and co-operatives. The second part of the report presents case studies and proposes potential legal solutions to the problems discussed.

UNIT 7

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
1. Explanation of the legal system, different sources of law, and the role of government in law-
making and how statutory and common law is applied to businesses.........................................3
2. Demonstrate strengths and weaknesses of legal system..........................................................4
3. Explanation of the key legislation, regulations and standards that a new business needs to be
aware of.......................................................................................................................................5
4. Different laws that businesses have to follow and their potential implications on business...6
5. Different types and classification of business organisations in the public and private sectors
.....................................................................................................................................................7
6. Management and funding of different organisations in public and private sectors.................8
Part 2................................................................................................................................................9
Case 1...........................................................................................................................................9
Case 2.........................................................................................................................................10
Case 3.........................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Legal system can be defined as process and procedure for interpretation and enforcement
of law. Legal have a significant role in governance and regulation of organisations and also
direct activities organisation. are different sources from which laws and regulations are sourced.
This report will discuss different elements of a legal system and role of government in law
making. Further report will discuss about key legislation, regulations and standards in context of
business organization. Photo report will discuss about close that a business have to follow and
potential impact that can have on business. Because this report is based legal system in context
of business report will also discuss about different legal structures of Business and their
advantages and disadvantages. Along with this report will also discuss about management and
funding of different types of Organization in public and private sector. Second part of the report
involves discussion of different cases and possible legal solution for the problems discussed in
case.
PART 1
1. Explanation of the legal system, different sources of law, and the role of government in law-
making and how statutory and common law is applied to businesses
Legal system constitutes of laws on an international level that works in the form of
accords set for the states and the agreement set up for them. Some of the countries or unions
have designed their own legal system and those who are federal or constituent have some
additional level. Other than this there are sources from where law is obtained such as
Constitutional Law-
In this source it is believed to be stated that two constitutions are required such as federal
or constitution of US. The purpose of both of them is to help form and guide the action to
government. Companies that are operating in private sector are safe if they follow the
constitution.
Statutory Law-

This form of law is concerned only in the area of action which deals in private sector.
Most of them are formed by written agreement or votes and different states are allowed to use it
(Keizer and Wevers, 2019).
Case Law-
The origin of this law stands from English common law. This law in countries such as
UK works on the customs that were traditional and local. Another name of this law is common
law and that is because it works as common for every nation. It applies to business who serves
on a national level because if there any changes in law it will affect the working of the business.
2. Demonstrate strengths and weaknesses of legal system
Strengths
 The decision which is taken by the court is taken just before the case which gives them
the power to change the law when the situation demands it.
 Other than this there is no pressure on the judicial system of countries by their political
environment. This is why whenever a controversy rises they make law which settles it
and avoid the backlash.
 Even the growth of law is in their hands as they work on keeping it less rigid so that they
can maintain the aspect of flexibility and maintain the meaning of law.
 The strength of legal system is that even where parliament is lacking they can work on
removing the gap in many cases.
Weaknesses
 They cannot make changes in the law if no case is present and that also must be relevant
to the subject which is very rare. Legal standing is necessary if the business or individual
wants to take a case to court. This method turns out to be very expensive for the
company.
 Judges are considered to be conservative in nature also they do not seek for the assistance
of parliament. The main focus of legal system is to resolve the conflicts between parties.

 The legal system has some restrictions that is the precedent is outdated and the level of
cases are unjust which is difficult to rule for the system and that creates difficulty for
them to come to a decision.
 Another weakness of the legal system and its measures are that they cannot make changes
in the law until there is a presentable case against them which forces them to take
assistance of the parliament and wait for them until they make the necessary changes in
law legal system will not be powerful. Most of the changes that are made to law are done
after the case. No one can anticipate the situation and changes that can take place in law.
 Resources of the legal system are believed to be limited as they can only focus on the
issues that they observe in the case through different parties for settlement. Due to this
measure they are not able to concise a clear decision which affects their skills to
comprehend the facts and this results in the process of law making (Clarkson and Miller,
2020).
3. Explanation of the key legislation, regulations and standards that a new business needs to be
aware of
Licensing-
In order to maintain the flow of work in legal manner it is necessary that company gets
registered. It is necessary for business venture to cope up with the bodies of government and ask
for the requirement of license so that no action can be taken against them.
Employment Laws-
There are different laws under this aspect which the company needs to be aware of such
as standard act for labor which states that no labor must work below minimum wage, other than
that give equal opportunity to all of the employees and laws which have guidelines for leaves and
measures for their safety.
Advertising-
It is important that company must not display any lies when they are promoting
themselves so that no customer is ever cheated.
Tax Laws-

It is necessary for the business to pay off all of their taxes such as federal tax, medicare,
social security. It will be helpful for them to take the assistance of accountant on regular basis so
that they never miss it (Beatty, Samuelson and Abril, 2018).
Online Business laws-
It is necessary for the companies dealing their business with this model to comply with
the laws of making sales internationally. The business will have to deal with the regulations,
customs etc.
4. Different laws that businesses have to follow and their potential implications on business
There are several types of laws that a business become subject to follow. Some of the laws and
their implication on business are as follows-
Contract law- contract law is one of the important that has impact on business. Business comes
in contract with several parties and contract law guide their behaviour and actions for formation
of contracts and what terms they can include in contract. Key elements of a contract law include
agreement contractual intention and consideration (Savelyev, 2017). Having this elements in a
contract make it legally enforceable and any of the party not following terms of law become
subject to legal actions. Contract law include elements like offer, acceptance, consideration,
contractual intention and form. On this basis a contract is formed.
Laws of torts- a tort is an act of omission other than a breach of contract because of which one
causes harm and injuries to another person. This is concerned with civil wrong on the basis of
which jurisdiction imposed liability. Negligence, duty, breach, causation, harm, defences to
negligence, and intentional torts are different laws that are included in laws of torts. Business has
to ensure that their activities do not include any kind of civil law, which can make them liable
under laws of tort.
Copyright law- This is another law that businesses have to consider. Copyright is a type of legal
protection and right to creator of literary dramatic musical and artistic work to control ways in
which their material may be used. It is important to ensure that organizations do not use
copyright content of others without their permission. Along with this, organization can also get
copyright for their created work.

Employment law- This law is concerned with employees of the organisation and outline
different rights and duties that employees and employer have for each other (Ben-Shahar and
Porat, 2019). This has significant impact on organisation having employees, not following these
rules can create difficulty for organisation.
5. Different types and classification of business organisations in the public and private sectors
Types of business organisations
Sole Trader - Sole trader business organisation is one in which business is owned and operated
by individual business owners. They start and run business by taking all the risks of the business
and also enjoy all the profit earned through the business.
Partnership- Partnership business organization is one which organization is owned and operated
by two or more people. These are known as partners and share profit and loss of the
organization. Partners can be different types like general partnership limited partners, limited
liability partners.
Registered company- registered company is one that is registered under companies act and is
governed as per laws and regulations of the company (Barnard, 2020). Such companies require
having a memorandum and an article of association at the time of incorporation.
Legal structures of the company is as follows-
Unincorporated legal structure- Unincorporated companies and legal structure refers to
companies that do not have any legal identity outside of the people who are management
committee. Member and owners of unincorporated groups are liable for actions of the
organisation (Gamede and Uleanya, 2019). Sole proprietorship is a type of unincorporated legal
structure in which organisation and owner are not considered different from each other. Along
with this general partnership is also unincorporated legal structure.
Advantages
 This structure does not involve any legal liability and owners can make decision for their
business
 This also does not require organisation to undertake any legal formality

Disadvantages
 Liability of firms becomes liability of the owners and members
 Organisation also does not have separate identity that affects image of the business by
image of the members
Incorporated legal structure- Incorporated legal structure is one in which company and
organisation has its own identity and is different from its members (Martin, 2019). Incorporated
legal involves registered company.
Advantages
 Business has separate identity and is artificial person
 Liability of the business does not become liability of the members of the business
Disadvantages
 This is difficult to get this legal structure and requires completing several legal
formalities
6. Management and funding of different organisations in public and private sectors
Limited companies- Limited companies are managed by appointment of directors, company
secretary, and auditors. These are responsible for management of the organisation and also are
liable to owners and shareholders of the company.
Social enterprises- Social enterprises are managed by appointed managers and are funded
through different types of fees (Moffitt, 2020). This involves for-profit and not-for-profit
organisation. Such organisations are funded through charity and donations.
Corporations- These are organisations that are managed by board of directors, company
secretary and different officials that are appointed to manage organisation. Funding of the
organisation is done through different ways like bank loan and shareholders capital and other
types of debts.
Co-operatives- Co-operatives is associations of people that are owned collectively and managed
democratically. Management of the organisation takes place on the basis of democratic selection
of managers and board of directors.

Part 2
Case 1
Case
This case is about Gordon who is a salesman in the Orange Computers Ltd Stores. Contract of
employment of Gordon provides for an annual salary of £10,000 and commission on the sales of
computers and peripherals sold by him. However, in 2015 due to competition business adversely
affected and manager of business informed Gordon that because of negative financial condition
of business, they will have to reduce outgoing of firm. This required Gordon to forgo his salary
and accept payment of commission. But then in 2016 economy began to improve and store
started to make healthy profits. Gordon in this situation felt that he should be able to get wages
for 2017 and also wish to know if he can claim for their wages from 2015 and 2016 because
Orange Computers Ltd Stores has sufficient profits to repay this money.
Possible solution for Gordon
Concerned with situation of Gordon, case becomes subject to compromise agreement
between business and its employees in which employees agree to settle their financial claims and
in return employer will agree to pay financial compensation (Urban and Gaffurini, 2018). As
Gordon also compromised his salary and become ready to accept commission for the sales of
computer, this also comes under compromise agreement. This also involved a severance
payment, this is concerned with payment which is less and has been cut down which is
receivable by employees. As now business is performing well and has position to pay back to
Gordon, Gordon can ask for salary from 2017 because condition for severance of payment was
underperforming and financial crisis of the organisation. However as there are certain conditions
for an compromise agreement and contract to be valid and this involves agreement must be in
writing, should e related to particular complaint and proceedings (Drobyazko and et.al., 2019). In
case these conditions are not involved in case of Gordon, there is no valid contract and Gordon
can claim his wages from 2017 and can also claim previous wages as company now can pay it.
Case 2
Case

Case involves Janet and Virgin Media Janet decided called Virgin Media to arrange the purchase
and installation of the internet package costing £35.00 per month, including the phone lines
(monthly line rental of £11.00). The engineer came on the arranged date at 9am and installed the
internet but did not installed phone line and saying that he could not find telephone point on the
switchboard and suggested that he will call his supervisor and come back. However he never
came back. After this she called Virgin Media and complaint about unfinished task and also for
not connecting phone line. After several calls and emails they sent another engineer after 3
weeks to fix phone line. Later when Janet received invoice from Virgin Media Janet was charged
for the whole package from the day the internet was installed including the monthly phone line
rental. But because phone line was connected three weeks later Janet believes that she should be
charged after 3 weeks.
Legal position of the service provider and the consumer
On the basis of contract law and its different terms and elements, contract between service
provider and the consumer was valid. This is because contract involved offer, which was made
by Janet, acceptance by service provider and an intention to create legal relationship. This means
that both became customers and service provider (Murphy, 2017). And this contract also
involved money which is consideration. Contract was verbal and as contract involved collecting
internet connection and phone line service provider could not fulfil terms of contract and this
became breach of contract. Because of this service provider could not fulfil agreement to provide
services on the pre-decided date.
Legal solution
This means that Janet is not liable to pay bill and payment of three weeks on which she was nit
provided phone line (Rowan, 2017). Because even though package involved phone lines monthly
rental for phone line was different.
Case 3
Case
Case involves Janet and Virgin Media Janet decided called Virgin Media to arrange the purchase
and installation of the internet package costing £35.00 per month, including the phone lines

(monthly line rental of £11.00). The engineer came on the arranged date at 9am and installed the
internet but did not installed phone line and saying that he could not find telephone point on the
switchboard and suggested that he will call his supervisor and come back. However he never
came back. After this she called Virgin Media and complaint about unfinished task and also for
not connecting phone line. After several calls and emails they sent another engineer after 3
weeks to fix phone line. Later when Janet received invoice from Virgin Media Janet was charged
for the whole package from the day the internet was installed including the monthly phone line
rental. But because phone line was connected three weeks later Janet believes that she should be
charged after 3 weeks.
Legal position of the service provider and the consumer
On the basis of contract law and its different terms and elements, contract between service
provider and the consumer was valid. This is because contract involved offer, which was made
by Janet, acceptance by service provider and an intention to create legal relationship. This means
that both became customers and service provider (Murphy, 2017). And this contract also
involved money which is consideration. Contract was verbal and as contract involved collecting
internet connection and phone line service provider could not fulfil terms of contract and this
became breach of contract. Because of this service provider could not fulfil agreement to provide
services on the pre-decided date.
Legal solution
This means that Janet is not liable to pay bill and payment of three weeks on which she was nit
provided phone line (Rowan, 2017). Because even though package involved phone lines monthly
rental for phone line was different.
CONCLUSION
From the above studies it has been assessed that it is necessary for the business to comply
with the set legislations and guidelines so that they are able to achieve their objectives and
expand freely with the support of legal aspects. Companies have to work as per their legal
structure and understand the guidelines of different countries so that they do not let themselves
stuck in a legal obligation. This report also consist different cases which has been clearly

analyzed and rationale. If the companies do not meet with the requirements and statutory of legal
code then they will be held liable. If they practice their work with being fair to the general public
then they have met with the requirements of business law.

REFERENCES
Books and Journals
Barnard, C., 2020. EU ‘Social’Policy From Employment Law to Labour Market Reform.
Beatty, J.F., Samuelson, S.S. and Abril, P., 2018. Business law and the legal environment.
Cengage Learning.
Ben-Shahar, O. and Porat, A., 2019. Personalizing mandatory rules in contract law. U. Chi. L.
Rev. 86. p.255.
Clarkson, K.W. and Miller, R.L., 2020. Business law: Text and cases. Cengage Learning.
Drobyazko, S and et.al., 2019. Factors of influence on the sustainable development in the
strategy management of corporations. Academy of Strategic Management Journal. 18.
pp.1-5.
Gamede, B.T. and Uleanya, C., 2019. Impact of entrepreneurship education on business
organisations. Journal of Entrepreneurship Education. 22(2). pp.1-11.
Keizer, J. and Wevers, H., 2019. A Basic Guide to International Business Law. Routledge.
Martin, F., 2019. Unincorporated associations: Legal and tax consequences. Taxation in
Australia. 53(8). p.420.
Moffitt, F., 2020. Compliance risks: Setting up an Incorporated Legal Practice under the'Uniform
Law'in NSW. LSJ: Law Society of NSW Journal. (70). p.88.
Murphy, T.H., 2017. Nondisparagement Clauses in Severance Agreements: A Capstone
Contracts Exercise. J. Legal Stud. Educ. 34. p.5.
Poole, J., 2016. Textbook on contract law. Oxford University Press.
Rowan, S., 2017. The new French law of contract. International & Comparative Law
Quarterly. 66(4). pp.805-831.
Savelyev, A., 2017. Contract law 2.0:‘Smart’contracts as the beginning of the end of classic
contract law. Information & Communications Technology Law. 26(2). pp.116-134.
Urban, B. and Gaffurini, E., 2018. Social enterprises and organizational learning in South
Africa. Journal of Entrepreneurship in Emerging Economies.