Law for Business Managers: Fraud, Negligence, and Corporations

This report analyzes business law principles relevant to business managers, focusing on a case of fraudulent misrepresentation in a car dealership scenario. It delves into the meaning of representation, the Fraud Act 2006, and the Consumer Protection Act 1986, highlighting the rights of consumers against unfair trade practices and fraudulent vehicle misrepresentation. The report then explores the tort of negligence, detailing the elements required to establish a claim, including duty of care, breach of duty, causation, and proximate cause, referencing the Blyth v. Birmingham Water Works Co. and Donoghue v. Stevenson cases. Finally, it provides a legal definition of a corporation, clarifying its status as a legal entity or artificial person within the framework of business law.

Law for Business
Managers

Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
Meaning of representation and along with appropriate law of case............................................3
Part 3................................................................................................................................................8
A corporation may be defined as a legal entity or artificial person’...........................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................10

INTRODUCTION
Business law refers all laws that give a framework to business managers for how to act and
operate business. which Business managers have to follow several rules and law and there is
requirement for business manager to have knowledge about all laws as it provides rights to them
against other businesses (Liao, Lebanoff and Liu, 2018). Understanding of business law can help
business manager in identifying legal issues and making better decision. This present study is
divided into 3 parts. Part 1 of this study is related to case of false misrepresentation of quality in
car dealership in which, car salesman sells second hand car to customer with false representation.
This study will discuss all cases and acts which can support victim in terms of false
representation. Part 2 of this study will discuss the tort of negligence and all rights which victims
can claim for negligence. Further, this study will discuss a corporation and its legal definition in
order to show whether it is counted as legal entity or an artificial person. The actual definition of
corporation can help in identifying appropriate laws relevant to this.
PART 1
Meaning of representation and along with appropriate law of case
Representation can be defined as an act of being another’s agent and a statement or fact. Or in
another legal form it can be said that representation is a statement which related to matter of fact
which is being made during contractual negotiation and other deals (Damonte, Cohen and Satta,
2016).
In the case of Jonna Vs Harron in which, Jonna does not have much knowledge about cars
and she tells this to car salesman Harron, that she wants to buy car. She asked to salesman that
represents some cars which are cheaper and reliable. So, Harron takes undue advantage of it and
represent a car by saying that it is a beautiful car and if she does not buy it then she would miss
out on the deal of the month. Jonna does not have any knowledge so, she believes Harron as he is
expertise as a car salesman but within 15 days, car breakdown. So, it is a case of
misrepresentation. It is a case in which Harron displays a car and represents it to Jonna with an
misrepresent quality and false representation. So, it is a case of false representation.
Fraud act 2006: In the fraud by false representation section (2) a person is considered in breach
of this section when he intentionally makes false representation. In fraud false representation,
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defendant has intention of making a gain or causing a loss to another and that is why conducts
dishonest representation (Furth-Matzkin and Sommers, 2020). Both these terms applied in the
case of Jonna where, car sales man represented car in a false or fraud manner in order to take
undue advantage and earning profit. In this fraud false representation, customers often affected
by this malpractice of salesman and believe that claims made by sales man because they are
considered to be experts. In such cases, victims or customers can seek help under consumer
protection act 1986. Under this act, a consumer is the one who buys any product or avail a
service for his/her own use or not for commercial purpose. And Jonna wants to buy car for his
personal purpose of going to office which is 20 miles away from his house. As per this act,
maximum sentence is being given to defendant for 5 years imprisonment.
As per this act, all retailers and sales man or defendants have duties to make sure that
products which they are going to sell are of a certain standard and if any contrary found in
products then they will be liable for unfair trade practice. So, as per the misrepresentation of
quality, Jonna has right to file complaint in the consumer Redressal commission in order to avail
a remedy. There is a similar case, registered in 2017. In this case, consumer proved that he
became a victim of odometer tampering of misrepresentation of quality by SLV car world
which is a 2nd hand car retailer. And in this case of SLV car world misrepresentation of quality,
defendant or retailer had to pay 1.5 Lac as per the Consumer forum for his unfair trade practice
(Relevant cases of False Misrepresentation, 2019).
Fraudulent vehicle misrepresentation act 1967: Such kinds of frauds in which defendants
have intention of misrepresentation of earning profit by unfair method are known as fraudulent
vehicle misrepresentation. In this misrepresentation, car sales man or dealer tells a lie to
customers intentionally because of making profit. Lie is mainly related to the quality of product
and for misleading customers. they use several statements to urge the buyer for selling their
products. There are several examples of vehicle fraud and misrepresentation of quality in which
dealers or car salesman often tells to their potential customers that car is quite new (Vizier,
2017). So, there is a case of fraudulent misrepresentation and victim can claim for fraud and can
obtain a significant damage award. For this, there is requirement for Jonna to show and prove
that the dealer omitted or misrepresented material facts which leads to financial loss to victim.
After proving fraud, victim may be entitled to various remedies tailored to appropriate
circumstance. In such cases court may order to refund all payments made by customer towards
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the purchase. Victim has right to get compensation for wrongful repossession of vehicle. So,
according to this act, victim can get all damages and full payment against damages from victim.
In such cases, the maximums sentence for fraud by misrepresentation or false representation
is given for 6 months’ imprisonment. Along with 6 months of imprisonment, defendant is asked
for unlimited fine in the magistrate’s coordinate crown court, defendant is given 10 years of
imprisonment along with unlimited fine (Fraud Misrepresentation Cases, 2020). So, it can be
said that Jonna can contact to fraud solicitors according to her suitability and can seek for help or
compensation against false misrepresentation for quality of car, purchased by her. A mere
representation can be distinguished from a term of contract because a contractual term refers any
provision which form a part of contract. On the other hand, representation refers a statement
which cannot be amounted to the term of contract. But in the representation, makers of statement
like car dealers do not give guarantee about their truth. And due to this lack of guarantee of truth
it gives rise to no contractual obligations but may amount to a tort such as misrepresentation
(Zaffini, 2020). So, from this, difference between representation and a term of contract can be
defined and seen. Express term in contract of agreement can also be defined and understood
when all terms are being expressly agreed between parties. And in representation, speaker of
statement only tells customers whatever he wants to tell for earning profit and it may be right and
wrong.
PART 2
Tort of negligence
Negligence occurs when one avoids or fails to take reasonable care which cause damage to
another person. This have clear application in both individual and business. There are several
facts needed to be satisfied for an individual to be successfully sue for negligence. On the other
hand, negligence’s unintentional tort where in one party have been injured due to action of
another. In Blyth v. Birmingham Water Works Co, Negligence was defined as the omission to do
something which a reasonable man would do or doing something which a prudent or reasonable
man would not do.
In addition, under the legal sense, this have clear high lightening of the failure for performing of
care in all situation. It can be state as negligence’s have ben model looking around to type of
injuries without considering suitable precaution.
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As per the case, Haroon is responsible for tort of negligence on to Jonna. as she was not awre
regarding any information in relation to car. She has blind trusted Haroon expertise of being
successful car salesman. But due to the negligence of Haroon the car has ben break down in two
weeks. So, in term of tort of negligence there are essential element need to be properly
discussed.
Essential of negligence tort
Duty to take care
This is important condition under liability for negligence as the defendant owes a legal duty
towards the plaintiff. This have existence due to relationship between the both parties. In case
Johana and Haroon have customer, relationship which have arisen due to nature of job of
Haroon. Herron is in legal profession being sales executive of firm with obligation to provide the
best good and service to its customer in perfect manner.
Standard of care and breach of duty
It is very important plaintiff to prove negligence as defendant is not able to perform any duties.
In such situation, Herron owes the duty of care to Johana, as duties will be determined exactly by
court. This is considered standard of care as professional is held under certain standard to follow
its professionalism. In per circumstances, the standard of care with reasonable circumstances by
ensuring proper possibility of harm tends to be minimized. This is helpful in keeping up with
right balances between parties considering level of care. If the situations of standard of care is
not met, then the person will be acted as breach of duty owned to another per. in term of case
Haroon was not able to meet the standard of care its salesman professions. So, this will be
enacted as breach of duty to Johnna.
Damage a causation
A personable the another one for negligence’s, harm. This have been considered as
consequences of another person action must be clearly shown. Harmed caused due to negligence
could be physical or mental. in the situation is clearly falling on plaintiff for providing the harem
that is been a sue by the defendant breach of duty have caused. furthered, there ought can be
turned into the intervening events as the court a clearly asked if the person have suffered harm
‘but for’ the action of another person. The failure to exercise reasonable care must result in
actual damages to a person to whom the defendant owed a duty of care and a personal injury
claim must be brought to court within the appropriate time frame.
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Proximate cause
Proximate cause has the scope for deferent responsibility in negligence case. In such situation,
negligence is only responsible for the hard causes that the defendant could have foreseen through
his or her actions. On the other hand, if the condition around the scope of risk of defendant, the
plaintiff will not be able to prove defendant action as the proximate assume of plaintiff damages.
for example
There was a case of Liebeck v. McDonald’s
This was case of sever burnt issue to customer. There was issue in quality control of
MacDonald. They found McDonald’s 80% responsible for the incident and awarded Liebeck
$160,000 in compensatory damages. They also awarded Liebeck 2.86 million dollars in punitive
damages because they deemed McDonald’s actions willful, wanton, and reckless.
On the other hand per case of Donoghue v. Stevenson (1932) has evolved the principle that we
each have a duty of care to our neighbour or someone we could reasonably expect to be affected
by our acts or omissions
Successful in claim for negligence
In addition to be successful in claim for negligence, the claimant complete significates
requirements with balance on probabilities. As per the case of Johana and Haroon, there are
differ essential element of negligence are responsible for event taken place. As per the case,
Johana was not aware of any important consideration to be keep under the mind for purchasing
car. The car has collapsed within two weeks. This have followed up the different element of tort
of negligence.
As implication of case is with duty of care as Haroon is need to look around the important
aspect of professionalism. Johana have taken round the statutory violation without discussing of
different element will clearly lead to negligence’s as per claim. The basic way to proof of
negligence’s by providing evidence support of the claim.
Direct evidence
This can be with handling of personal accounts of the events, there will be question from
witness testimony, video, photos and document pertaining to the events n question. Johana can
show the proper documentation regrading the paper of car and video recording of the showroom
where she has purchase car.
Circumstantial evidences
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These are inference-based evidences which are clearly derived from the party testimony use d to
establish proof in negligence case. There are special rules existences depending on different
circumstance of case. Johana claim will have requirements of evidence which is proving there
statuary violations to establish the persuasion of negligence. After collapsing of care, Johnna
have resumed that Haroon have negligence to responsibility and provided the car which but not
as per the usage for long run. In addition, Johnna can as per the doctrine of res Ipas loquitur
allows for the inference of negligence with proof of misconduct in cases where the plaintiff can
prove the injury causing event does not happen in the absence of negligence and the defendant
had exclusive control of the cause.
Part 3
A corporation may be defined as a legal entity or artificial person’
In the context of corporation, it can be said that a company and corporation is recognized
as an artificial person created by law. Incorporation term is known as artificial body which needs
to be recognized by legal person or law, exist independently with all appropriate liabilities and
rights. The meaning of this incorporation is it is treated as a separate entity from its all
participants. In another words corporate entity refers business structure which is being formed to
perform all business activities like holding assets and others. It can also be said that it is a legal
entity exist independently and there are main 3 forms of legal entities via which business
activities are being conducted such as: corporation, sole proprietorship and partnership (Abd
Gheadas and Aziz, 2017).
One of the main reasons of knowing it legal entity because it is distinct from its owners
and it is the reason as many people refers it as a legal person. The meaning of this legal person
means it needs to follow all rules, laws and stakeholders can take part in all profits occurred by
dividends and stock appreciations. Section 2 of companies’ act 2013 also defines and considers
company as a company incorporate because it is created by law, having independent or separate
entity with perpetual succession. So, overall, it can be said that a company can be defined as
incorporation association, artificial person, created by law, having independent entity with
perpetual succession. There are some reasons which show purpose of considering corporation as
an artificial person under laws such as: creating new legal entity via which several owners can
act as one. This new artificial body require to taking on same legal status as owner have and
assume responsibility for them. From this it cannot be said that corporation is a person in the
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ordinary terms so, the meaning is corporate entity is an artificial person which can take same
legal actions as owner of the company (Heizer, 2016). There are some features of artificial
personality and one of the main features of it is allow all entities to be considered artificial body
who are independent from their individual members. It also has right to sue, to enter contract, to
own property and to be sued. Artificial personality is made us from several characteristics such
as: behavioural quirks which assigned to digital assistant. It also holds all legal rights which
make them differ from individuals whom they comprise for example: a registered company
because it can sue and can be sued.
On the other hand, corporation is considered as artificial person for the peruse of tax. A
corporation is an association of different person recognized as legal entity’s having the
independent legal existences. it has a body corporate or justice person. on the other hand, A
corporation is an artificial person as inter alia. It is created through a legal process for example
charter, statute or by registration. The person formed is by juristic or abstraction of law. This
case has been refer as per rule of Salomon V. Salomon and Co. Ltd.
Rights
Since corporations is acting as place of owners, this may clearly seem that corporation will have
same right as owner. this will have inclusion of right to property, the right to enter into contracts
and equal protection under the law. On the other hand, there are many things which cannot be
perform by corporation as owner as marry, vote or run for office.
Responsibility
When people act in group have to look around the legal responsibilities. There is need to make
proper obey of policy and procedure, following up of regulation and avoid damaging the
property. There is need to treat employee as per labour code. government and court will treat
corporation in same manner assuming having responsibilities of full artificial person under laws
corporation will be responsible for its action.
Legal proceeding
As a legal person, corporation may be sued as court will treat artificial person with same rights
and obligation taken by individual person. Corporation can Have hiring of lawyers, file lawsuits
and collect ages. On the other hand, courts have holding corporation liable for action and even
dissolution if proven guilty.
Taxes
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Corporation are artificial person for tax purpose. There is key difference in application tax rates.
corporation have the different tax treatment highlighting their corporation a legal person,
governments can treat them differently than individuals in specific instances.
CONCLUSION
From the above file, it can be concluded as misrepresentation of quality, Jonna has right to file
complaint in the consumer Redressal commission in order to avail a remedy. There is
requirement for Jonna to show and prove that the dealer omitted or misrepresented material facts
which leads to financial loss to victim Standard of care and breach of duty professional is held
under certain standard to follow its professionalism. in per circumstances. So, overall, it can be
said that a company can be defined as incorporation association, artificial person, created by law,
having independent entity with perpetual succession. There is need to make proper obey of
policy and procedure, following up of regulation and avoid damaging the property.
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REFERENCES
Books and Journals
Online
Damonte, M., Cohen, S.B. and Satta, G., 2016. An incremental parser for abstract meaning
representation. arXiv preprint arXiv:1608.06111.
Liao, K., Lebanoff, L. and Liu, F., 2018. Abstract meaning representation for multi-document
summarization. arXiv preprint arXiv:1806.05655.
Furth-Matzkin, M. and Sommers, R., 2020. Consumer Psychology and the Problem of Fine-Print
Fraud. Stan. L. Rev., 72, p.503.
Vazire, S., 2017. Quality uncertainty erodes trust in science. Collabra: Psychology, 3(1).
Zaffini, S., 2020. Real Unity and Representation in Hobbes, Schmitt, and Barth. Polity, 52(1),
pp.35-63.
Abd Ghadas, Z.A. and Aziz, H.A., 2017. Legal Framework of Shariah Corporations in Malaysia:
Special Reference to Waqf Corporation. Journal of Modern Accounting and
Auditing. 13(3). pp.121-127.
Heiser, W.W., 2016. General Jurisdiction in the Place of Incorporation: An Artificial" Home" for
an Artificial Person. Houston Law Review. 53(3). p.3948.
Cavico, F.J and et,al., 2016. The Tort of Negligence in Employment Hiring, Supervision and
Retention. American Journal of Business and Society, 1(4), p.205.
Goudkamp, J. and Ihuoma, M., 2016. A tour of the tort of negligence. James Goudkamp and
Melody Ihuoma,‘A Tour of the Tort of Negligence’(2016), 32.
Stace, V., 2016. Directors' Liability in Negligence-Challenging the Elements of the Tort
Approach. Victoria U. Wellington L. Rev., 47, p.485.
ONLINE
Relevant cases of False Misrepresentation. 2019. Online Available through: <
http://lawtimesjournal.in/odometer-tampering-and-its-remedies/.>
Fraud Misrepresentation Cases. 2020. Online Available through: <
https://www.stuartmillersolicitors.co.uk/criminal-law-cases/fraud-cases/#:~:text=As
%20with%20other%20types%20of,risk%20of%20loss%20to%20another >
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