University Case Study: Corporate Law and Negligence Issues

This case study delves into various aspects of corporate law, presenting scenarios involving contract law, negligence, and legal enforceability. The first part examines the enforceability of promises made by an individual, Sergio, in different situations, considering the intentions of the parties, the requirements for a legally binding contract, and relevant case laws such as Jones v Padavatton and Price v Easton. The second part focuses on the tort of negligence, specifically addressing whether a company, Extortionate PLC, is liable for an injury sustained by Samantha. It explores the concept of duty of care, referencing the case of Donoghue v Stevenson and the Caparo Industries plc v Dickman test, and the application of working time regulations, referencing the Working Time Regulations 1998 and the Federación de Servicios de Comisiones Obreras (CCOO) v Deutsche Bank SAE (DB SAE) case. The analysis considers issues of retrospective consideration and the application of legal principles to determine the liabilities and obligations of the involved parties.

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Case Study
Corporate Law
1/14/2020
University
Student Credentials

Case Study 1
Part 1
1. Introduction
In case where there is an uncertainty where there is an inside meaning to the said contract, in
the year 2015, the Supreme Court as such held in the case Arnold v Britton that the intentions
of the parties as such by the reference where a person who in no manner is connected with the
case will take it and understand in the manner as it is with all the background information that
is available to both the involved parties. Here the intention that is a must for the contract to be
conducted so as to be enforceable (e lawresources.co.ukl, 2019).
Issue
Is the promise made by Sergio to give his son Alexander 5,000 British pounds in exchange
for changing his career from being a chef to a solicitor, legally enforceable?
Rule
Though there are no certain rules in respect with the case as the intention of the contract is
what matters the most. The intention of building legal relations is what is necessary in this
case so as to make a contract enforceable and legal (In Breif, 2020). As specified in Jones v
Padavatton [1968] EWCA Civ 4 it was held that the agreement in question was solely a
domestic one according to which, there is a notion as the parties involved are not really
intending to be in any way be bound with the said agreement. Also, there is no such evidence
in order to cancel out this presumption (e lawresources, 2019).
Application
Choosing a career path is a necessary step in every child’s life, though choosing the one they
have interest in is also required. Hence, the promise made by Sergio is not a binding one, as it
does not fulfil the basic requirements of a legal contract between two individuals. The

Case Study 2
promise made is a verbal promise and also does not fulfil all the requirements a contract that
is enforceable by law or be taken to court if not abided by. As per the case Jones v
Padavatton, the scenario here does in no manner clearly specify any legal intention of the
parties to get indulged in an agreement which is legally enforceable.
Conclusion
These basic requirements include first of all an offer that was made by Sergio, the second
requirement is the acceptance of his son, which was never mentioned if he agreed to, thirdly,
the competency of both the parties involved was never mentioned, and also there is no lawful
subject matter amongst them, it’s just a choice of both the individuals if they wish to do so or
not, and there is definitely an obligation between the parties to conduct a certain job, where
one has to provide compensation and the other one has to complete the task of becoming a
solicitor and last but not the least, consideration, which Sergio has agreed upon. Hence, the
promise here is not a one that can be legally enforceable in any form.
2. Introduction
As per the EU Legislation where Working Time Regulations 1998 is concerned, the member
states of the EU need to comply with the certain rules provided by the said legislation so as to
facilitate the work of the individuals as well as avoid exploitation of the employees as such
by the employees in any manner. Moreover, there is another clause that needs to be
mentioned here which is that any kind of consideration cannot be taken up in a retrospective
manner.
Issue
Is the promise made by Sergio to Liam, his secretary so as to pay 500 British pounds in
retrospective manner in exchange for Liam’s lunch hour legally enforceable?

Case Study 3
Rule
As per the Legislation of EU, there is a certain set of rules that needs to be followed by the
member states as such; The WTD or WTR which is the Working Time Regulations is one
such law that has to be implemented by the United Kingdom being a member of EU
legislation. It regulates all the requirements of the employees which include all the rest breaks
or the hours that are included as the working hours as well as also the issues revolving around
the annual leaves where there is a pure intention of protecting the safety and health of the
workers. Apart from these, there is also a clause as in relation with the retrospective way of
providing consideration. The law in general does not allow the consideration to be paid in
retrospective manner (BMA, 2018). As per the EU Legislation every employee is entitles for
an hour’s break after every 6 hours under WTD (Spratt Endicott Solicitors, 2019). As per the
case law of Federación de Servicios de Comisiones Obreras (CCOO) v Deutsche Bank SAE
(DB SAE) there was a need to record the working hours of an individual working for the firm,
so that there are no issues related to working hours recorded and to make sure that companies
of firms are working as per the WTD or the Working Time Directives (EUR -Lex, 2019).
Application
This kind of arrangement is against the work time regulations in United Kingdom there is a
certain time period that has to be provided to the employees working in an organisation for
log time duration as specified in Federación de Servicios de Comisiones Obreras (CCOO) v
Deutsche Bank SAE (DB SAE). Therefore, the law shall be applied to the case where Sergio
even agreed to promise so as to pay Liam for extra services of paying him off in retrospective
manner for giving up his lunch breaks. This is in itself on many levels not acceptable under
the certain laws as mentioned above.

Case Study 4
Conclusion
Hence, the promise made by Sergio is not really legally enforceable by law here as it is not
legal to make employees work for more than six hours straight, a break is necessary to be
provided in certain time durations.
3. Introduction
In general, there just needs to be two major conditions that need to be fulfilled so as to make
a contract legally enforceable. These major two conditions are, the first is the parties of the
contract must be in agreement with the terms and conditions as stated in the contract as where
the offer and acceptance has already been conferred upon and mutually decided, and the
another condition that is the consideration which is necessary to complete the said contract.
Taking into consideration that, the subject of the contract is legal in all ways as well as there
is an intention to contract (Crystal, 2019).
Issue
Is the contract made between Natasha and Sergio legally enforceable?
Rule
When a contract is made, all the clauses and the rules or the work stated needs to be done
according to the contract itself so that there are no issues to pertain (Baker, 2019). As per the
law, the contract needs to be adhered to when entered into one with an individual’s own will
(The law society, 2019). In Price v Easton (1833) there was a contract made for completing a
task for another in exchange for certain consideration (Swaminathan, 2016).
Application
If the said promise is a part of the contract that binds Natasha to work as per what is being
told to her then it is definitely binding as stated in the case of Price v Easton, Sergio here
became an indirect employer of the individual and this can bind her to work in accordance

Case Study 5
with the conditions that have been mentioned to her. And specifically, if Natasha agreed to
the same in front of two witnesses then it definitely is a binding contract or binding promise
where Natasha if required, can file a suit against Sergio for non -payment.
Conclusion
Hence, in this case, if that certain clause is mentioned in the contract between Sergio and
Natasha, then definitely that contract or the promise in this case is enforceable by law.
Part 2
Introduction
The negligence tort is something that is wrong in the legal aspect, as according to it,
carelessness on an individual or one party’s part the other one faces kind of harm that is quite
a suffering for the other party. Here the first party dismisses the urge to go ahead for some
specific steps that need to be taken urgently so as to avoid further harm or a similar harm in
the future. As a standard rule, there needs to be a relationship that is authoritative which can
either be it implied or expressed among the parties in question, it can be either of them, that
of patient and the professional, worker or the employee and as well as the banker himself and
as in recently, it was a requirement so as to establish a legally binding relationship if the case
of negligence has to in any manner succeed (Fulbrook, 2017).
Issue
Whether Extortionate PLC is liable for Samantha’s injury?
Rule
Here the case that has on many occasions been cited so as to establish the law as stated above
in the introduction is the case of Donoghue v Stevenson (1932) AC 562 (e -lawresources,
2019). As per the said case, though there was no contract made, be it in a verbal manner or in

Case Study 6
the physical manner either, the act of negligence would in any manner go through. As the
claimant here stated specifically in this case that, the qualification for where duty of care is
concerned was under her, apart from the said fact that the merchandise that was insufficient
so purchased, without any input from someone else, yet through a companion, hence, there
was no existing agreement amongst the individual who suffered the harm as well as the one
party that was negligent.
When the above mentioned case is discussed, a notion has been developed in accordance with
which there is a rule where every person in some or the other way owns a duty of care
towards the people who are around them, or else, in their place someone reasonable from
whom there is hope to be in some manner be influenced through certain demonstrations or
any exclusions. Duty of Care in itself is the component which is quite primary that must be
cleared out or stated clearly in order to succeed. Later this might amount to such a case where
the obligation of care could be held to apply generally thus case law has made it
progressively hard to build up that such an obligation exists (Chamberlain, 2019).
As per the case of, Anns v Merton London Borough Council (1978) AC 728 a two phase test
was utilized to set up if there was an adequate relationship of closeness dependent on
predictability and, if such was the case, then were there any reasons which were not to be
included in the obligation of care or the duty of care (United Kingdom House of Lords
Decisions, 2019). Afterward, in Caparo Industries plc v Dickman (1990), 2 AC 605, a three
overlay test was utilized to decide whether an obligation of care existed (Dick, 2019).
These major three components that establish the tort of negligence are:
 The injury or any kind of harm that has been caused must be a sensibly predictable
aftereffect of the litigant's direct.
 Proximity of a relationship is a must.

Case Study 7
 It must be reasonable just and fair to make the person liable for the damage (Keren-
Paz, 2018).
Application
The component here that is required is however for rising up that therein this case has been a
kind of breach in the duty of care. Whereas such an activity is concerned, here the court shall
take into consideration the point of care which any reasonable individual shall have taken at
that moment as was done in the case Donoghue v Stevenson. In event where the respondent
avoided the task that they were supposed to perform in order to satisfy the mentioned
guideline, here in this scenario, the court shall consider only to the point where the conditions
of the case are genuine and also the basis should be maintained. The norms which are
Proficient might require some certain time to be observed properly by a reasonable person,
according to which, in the said case these guidelines might be used. Regular practices or
guidelines of industry, in the case where those measures that shall be considered, except if, it
might be considered as sheer carelessness.
As mentioned in Anns v Merton London Borough Council, there was an established
relationship between the parties as well as Samantha in this case was the client who wished to
obtain a loan from the defendant. Where there is an off chance, it was quite sensible decision
to think of more than what was expected as consideration on account of a handicap or
breakage of the party that has been offended contrasting along with a proper fit or solid
person. On the off chance that, there might be quite a high level of danger in the activity by
the litigant, at that point where the honourable court might expect that there are certain
additional safety measures that need to be taken. As per the conclusion from the case of
Caparo Industries plc v Dickman it could be said that all the three requirements are being
fulfilled in Samantha’s case. When cases as such are talked about, even for the pragmatic
reasons, insurances that were sensible could not be taken, because of them being so costly

Case Study 8
without any reason as such, in this case the court might have opted the litigant if it had met
the duty it had of care. In the event that there was a social advantage to the respondent's
activity the court may choose they had not ruptured their obligation of care.
Conclusion
Similarly in Samantha’s case, there was a definite chance of people getting hurt. In fact, it
was not just Samantha, but many other people apart from Samantha faced similar scenarios.
Even they faced physical injuries and as such in very similar manner. The Duty of care was
avoided on part of Extortionate PLC. And moreover when they knew that due to their lack,
people were suffering through this, they never got it repaired or anything as such, which is
another level of negligence on their part.
All the three components to establish the tort can be established here,
1. A physical injury could be at any time being predicted, and specifically when other
people already had gone through a similar scenario by any reasonable person. Hence,
the injury or the damage was foreseeable.
2. There was careless ness on part of the defendant that they did not take proper
measures so as to help out the people coming to their own firm.
3. There was a casual connection where the defendant and the plaintiff were connected
as the plaintiff came to apply for a loan in Extortionate PLC casually, and the
defendant faced such fate which resulted in such physical harm.
4. There was infringement of the duty of care on many levels by Extortionate PLC.
Part 3
An Artificial Person is the one that has been created in order to provide rights just as the real
person where a particular person cannot be relied upon or when there is no person to provide

Case Study 9
a particular power. Hence, an artificial person is created, who is in the eyes of law an actual
person who can be relied upon legally as a person. The major example of any artificial person
is a Company. A company in every term is known to be an artificial person and is legally
recognised as a person also. Any corporation or a company being incorporated becomes an
artificial person which means it tends to get certain rights and liabilities which can be used or
utilised as per the situations then, with the help of the law if required. Hence, there is no
certain employee or the participant of that company who needs to take action when required,
it is all the members of the company, be it staff, workers, employees, employers, and even
authoritative people, each one functions in order to make the company work or succeed. As
an individual person, it holds the rights to be sued by others as well as sue people if they
commit any wrong with the company (Bayern et al., 2017).
One case since when the initiation of taking a company as a separate legal entity apart from
its shareholders or directors was the case of Salomon v A Salomon & Co Ltd. In this case,
after various discussions and decisions on various levels it was declared that a company is a
different legal entity in the eyes of law apart from its shareholders and directors. After this
case, every company was provided a corporate personality according to which the people
who were the creditors of the company that is insolvent cannot file a suit against the
shareholders of the company so as to pay up for the pending amounts of the company (Law
Case Summaries, 2019).
A company or a corporation has its own set of rights and duties just like any other actual
person. This artificial person as such, has the provision of being owned by at least a single
shareholder and also managed by at least one director. There are provisions in law where one
single person can become the director of a company in order to manage the company well.
The participants are quite different from the company itself as company is an artificial person
while, the participants of the company contribute to make things work fine for this artificial

Case Study 10
person (Mitchell, 2019). This legal personality has different aspects to it, as it has perpetual
succession and is in no manner affected by death, or injury or disease for that matter. Since it
is immortal, it does not get affected by the mortality or any disease; hence, it is a person that
stays for a long time and is legally enforceable. The participants of the company keep on
changing from time to time as per the requirement, while the only thing that stays constant is
the company itself. The company in no manner gets affected by such changes. It does get
affected when the company law of the country changes or any kind of amendment is done.
Unlike a normal person, company works upon the efforts of others and since it is an artificial
person it does not get affected by disease or, disability of a shareholder or even the situation
of a shareholder financially on personal level does not affect the working of the company
(Pollman, 2016).
Another case that established a landmark in order to prove that the company is a different
legal entity from the people who have built it up or the directors and other members of the
company is the case of Lee v Lee's Air Farming [1961] AC 12 in which at first when the
widow of Mr Lee applied for worker’s compensation under the law in UK, was denied by the
Court of New Zealand stating that Mr. Lee was also the employer in this case. Later the Privy
Council was held and it stated that a company was a different legal entity as stated in
Salomon v A Salomon and Co Ltd. and hence, there is no owner in a company, therefore
technically, Mr. Lee was working for the company as its director and was not the owner.
Hence, the Mrs. Lee’s application for workers compensation was reconsidered. Providing an
organization with a status of being an “artificial person” gives them the liberty to have certain
rights and duties, amongst these is the right to stand up for themselves be it in a court. An
“artificial person” has been provided by the law the right to stand up in a court in order to
assist or specify for that matter their very own ideas or points as such to prove their own

Case Study 11
points in relation to any case. It is done so as to go into legally enforceable understandings,
and to be viewed as answerable for their offenses as well (Casemine, 2020).
The only time when a company gets affected is when it gets insolvent or winds up, with the
due legal procedure. Here in such case, the assets that the company holds and every such
similar aspect are covered where the company goes bankrupt, then it loses its identity later. A
company loses its existence as a whole when it is wound up as per the conditions and laws
made in the companies act. An artificial person is that entity which in every manner under the
law is considered a legal person and is bound by certain rules and duties as well as this
legally being a person helps the company or as such enjoy certain rights as well. By being a
legal person another thing that a company enjoys is, owing a property or asset in its own
name. Though the main set back here is that, an artificial person can never enjoy the rights
provided as such as a legal natural person.
Bibliography

Case Study 12
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Case Study 13
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Case Study 14
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