Business Law Report: Analysis of Legal Concepts in Business Operations

This business law report delves into several critical areas of commercial law, providing a comprehensive analysis of legal principles relevant to business operations. The report begins with an examination of the Sale of Goods Act, 1979, focusing on implied terms, transfer of property, remedies for buyers and sellers, and product liability. It then explores consumer credit, differentiating between various credit agreements and examining legal rules surrounding termination rights and default notices. The report further investigates agency law, outlining its general features, types of agents, and the rights and duties of agents. The analysis extends to UK competition law, covering monopolies, anti-competitive practices, and the roles of regulatory bodies. Finally, the report addresses intellectual property law, discussing different forms of intellectual property rights and the principles governing their protection, including inventions, copyright, and trademarks.

Business Law

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Analysis of legal rules of implied terms related to sale of goods ........................................1
1.2 Analysis of statutory provisions on transfer of property and possession..............................2
1.3 Statutory provisions regarding remedies available to buyer and seller.................................3
1.4 Product liability legal rules and statutory provisions for faulty goods.................................4
TASK 2............................................................................................................................................4
2.1 Differentiation between different types of credit agreements...............................................4
2.2 Legal rules on termination rights and default notices in case of failure to pay future debts.5
2.3 General features of Agency and differentiation between different types of agents..............5
2.4 Rights and duties of agent.....................................................................................................6
TASK 3............................................................................................................................................7
3.1 Monopolies and anti-competitive practice legislation in the UK .........................................7
3.2 Role of Competition Commission and Office of Fair Trading.............................................8
3.3 Dominant position within EU common market ...................................................................8
3.4 Exemptions under EU law for anti-competitive practices....................................................8
TASK 4............................................................................................................................................9
4.1 Different forms of intellectual property rights......................................................................9
4.2 Principles relating to the protection of inventions................................................................9
4.3 Principles relating to copyright protection and their infringement.....................................10
4.4 Comparison and contrast between protection of trademarks and business names..............10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
..............................................................................................................................................13

INTRODUCTION
Sale of Goods Act, 1979, UK is the law established to govern the activities related to the
buying and selling of goods. Sale of goods can be determined as a contract that exists in the eyes
of law and formed with the purpose of exchange of goods, services or property from seller to
buyer at an agreed amount (Haselmann, Pistor and Vig, 2010). The present study highlights the
legal rules of implied terms relating to the sale of goods and supply of services and remedies
available to buyer and seller in sale of goods contract.
In UK, consumer credit is regulated by Consumer Credit Act, 1974 which seeks to
govern the purchases made using credit card and provides protection when any loan or hire
agreement is entered. The report provides an understanding of different types of credit
agreements that can be used in the given scenario and further, an analysis of the general features
of agency is done.
The UK competition law is established so that any arrangements, agreements or business
practices that intend to restrict, distort or prevent competition and which may impact the trade
can be prohibited. The assignment outlines and explains the anti-competitive practices and
monopolies legislation.
Intellectual property law tends to prevent people from stealing and copying other's brand,
copyrights, trademarks, patents and designs (Wild, Wild and Han, 2014). In this report, various
types of intellectual property rights and principles related to their protection are discussed.
TASK 1
1.1 Analysis of legal rules of implied terms related to sale of goods
Terms implied by sale of goods act are the terms implied in the contract and in case of
breach of implied terms, defendant would be liable to pay damages. The implied term related to
sale of goods and supply of services are explained below : Implied condition as to title : As per Section 12(1) of the Sale of Goods Act, there is an
implied condition that unless circumstances shows a different intention, seller has the
right to sell the goods (Sale of Goods, 2015). It was held in the case of Rowland v Divall,
1923 that rejection of goods would be considered as a breach u/s 12 and buyer will be
entitled for recovery of full purchase price even if he has used the goods for some time. Implied warranties as to title : Section 12(2) of the act provides implied warranty that the
goods sold by the buyer are free from any charge or encumbrance not disclosed to the
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buyer and he will enjoy quiet possession of the goods as held in the case of Microbeads
AG v Vinhurst Road Markings Ltd, 1975. Sale by description : According to the provision of Section 13(1), there is an implied
condition that whenever there is a contract for sale of goods by description, the goods
must correspond with such description and this principle was laid down in the case of
Beale v Taylor, 1967 (Sale and supply of goods, 2017). Implied conditions as to fitness : These conditions are stated in Section 14 which
provides that when the goods are sold in the course of business, there is an implied
condition that the goods supplied under the contract are reasonably fit for the purpose for
which they are bought.
 Satisfactory quality : There is an implied term in a contract of sale of goods that goods
are of satisfactory quality i.e. they meet the standards that a reasonable man would
consider satisfactory in relation to its price, description, fitness, safety, durability etc.
From the above provisions and principles laid down in different cases, it can be concluded that
there is a breach of implied terms by the Car Dealers as the car was not as per description, not fit
for the purpose and Ben was not satisfied with the quality. Therefore, car dealers would be liable
and Ben can return the car and recover the amount from the seller.
1.2 Analysis of statutory provisions on transfer of property and possession
The property in goods is transferred from buyer to seller when the proprietary rights in
the goods and obligations i.e. ownership is transferred (Kess, Kanchana and Phusavat, 2010).
The transfer of property is central to the existence of a contract of sale of goods because of
following reasons : Ownership : The ownership of the car is acquired by the Ben and ceases to be with the
Car dealers as soon as goods are transferred from seller to buyer. Risk : Risk passes with the property in the goods.
 Suit for price : Seller can suit the buyer only after property in goods is passed to the
seller.
Following statutory provisions can be applied by Ben :
Section 16 : The property in the goods can be transferred only when the goods are ascertained as
held in the case of Healy v Howlett and Sons, 1917.
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Section 17 : It is must that the product is ascertained or specific but the ownership is passed only
when the parties have the intention of such transfer.
Section 18 : It provides 5 rules -
 Rule 1 : In case of unconditional contract, when specific goods are sold, then, ownership
is passed at the time of sale (Weber, 2010).
 Rule 2 : If any specific condition is imposed, then, it must to fulfil such condition for
transfer of ownership.
 Rule 3 : The transfer of ownership should be measured and weighed.
 Rule 4 : If for the sale of goods, it is necessary to approve or return, then, goods cannot
be sold until such approval or return basis is completed.
 Rule 5 : The ownership would be transferred even if the goods are unascertained.
Section 19 : When the goods are sold by the seller, then , right to retain the title is also provided
to the buyer.
Section 20 : The risk related to the goods is passed at the time goods are sold to the buyer.
1.3 Statutory provisions regarding remedies available to buyer and seller
As per the provisions of Sale of Goods Act, the remedies available to buyer and seller are
mentioned hereunder :
Remedies available to Ben
 As per Section 20 and 22 of the Act, he has right to reject the goods in case of breach of
Section 9, 10,11,13 and 14.
 According to Section 23(2), consumer has the right to repair or replace the product.
 Section 25 provides right to seller for either reduction of price or final right to reject.
 He has right to recover damages if goods are not delivered.
 An order of specific performance can be obtained.
 Right to recovery for liquidated damages.
Remedies available to the Car Dealers
 Seller has the right to stop the goods in transit, if he knows buyer has become insolvent.
 If the buyer does not make payment, seller has right to recover the goods.
 Specific performance can be demanded.
 Seller has right to cancel the order made by the buyer.
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1.4 Product liability legal rules and statutory provisions for faulty goods
Defective goods can be determined as goods which possess some shortcoming in relation
to quality or quantity of the product and this caused injury or loss to the buyer of such defective
goods (McAdams, Neslund and Neslund, 2015). The manufacturers, sellers and distributors are
required to ensure that the goods sold to consumers are safe.
In case, if due to the defective car purchased by Ben, an accident occurred which causes
injury to a family member, then, such family member can claim under the following laws and
need to prove his claim :
 Consumer Protection Act, 1987 : He can file a suit under this act and is required to
prove only one thing that the goods were defective.
 Contract law : As per contract law, plaintiff is required to prove that the product is
defective and also, there is a breach of obligation which was imposed on the defendant at
the time of entering into the contract.
 Tort law : Under tort law, as per tort of negligence, plaintiff needs to prove three things
to be successful in his claim :
- Defendant owes a duty of care
- There was a breach of duty of care
- Such breach has caused loss or injury to the plaintiff.
TASK 2
2.1 Differentiation between different types of credit agreements
A credit agreement can be defined as a legal contract which is made for arrangement of
certain sum of money for a specified period between bank and lender (Different types of credit,
2017). All the terms and conditions are outlined in the contract which is signed and agreed by
both the parties. Different types of credit agreements that can be entered by Ben to buy the car
are : Credit cards : Credit card will enable Ben to borrow money from the bank and purchase
the car. No interest is charged on the use of credit cards. Bank loan : Ben can take a loan in which he has to pay monthly instalments over a
specific period. He can use mortgages as type of credit for the purchase of car which are
secured against a property and are paid in monthly instalments.
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 Hire purchase : In this agreement, possession of car would be transferred to Ben but
ownership will be passed only on the payment of last instalment.
 Conditional sale : In this agreement, a condition is imposed that the party has to purchase
the goods on the end of contract.
Restricted and Unrestricted use :
Restricted use – When the credit can be used only for the purpose which is stated in the contract;
in the given case – to purchase the car, it is known as restricted use.
Unrestricted use – When there is no restriction imposed by the contract for use of credit, it is
referred as unrestricted use.
2.2 Legal rules on termination rights and default notices in case of failure to pay future debts
Ben is under legal obligation to make payment if he purchases the car on credit but if he
has problem and unable to pay future debts, he can terminate the contract (Abdi and Aulakh,
2012). For termination, following rules are required to be followed :
 Both parties can terminate the contract if the circumstances demand so.
 They can demand to make settlement within a reasonable time.
 In case of termination, debtor is under obligation to return the goods to the seller.
 Creditor can terminate the contract in case of breach of contract by debtor.
In case, Ben is unable to pay make payments and breach the contract, then, creditor would give a
default notice to him before taking any further action.
 Default notice is given to the debtor.
 Creditor has the right to terminate the contract and demand for early payment.
 Creditor will recover the goods from Ben.
 Seven days time period is granted by creditor before taking any further action.
 The court can order enforcement of the contract.
2.3 General features of Agency and differentiation between different types of agents
Agency can be defined as a special contract between principal who agrees that the agent
can act on his behalf.
Features of Agency
 There should be an agreement between principal and agent and it is not necessary to enter
into a contract.
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 It is important that the agent intends to act on behalf of principal as held in the case of
Krishna Vs. Ganapathi, 1955.
 The agent is entitled to perform all such activities that principal is liable to perform but
this does not include acts which are of personal nature (Chaney and Martin, 2013).
 Principal would be liable for all the acts of agents carried on his behalf.
 No consideration is required for the formation of agency.
Different types of Agents
1. General agents : The general agents are the ones who have unlimited authority of the
principal for carrying out the contracts.
2. Agent of necessity : This type of agency is created as a result of circumstances. There is
no formal appointment of agent but he steps in to reduce the damages of principal.
3. Del Credere agent : This type of agent provides guarantee of the goods or agrees to
indemnify principal for any loss arising due to agency transaction.
4. Factor : This type of agent has possession of goods and he can sell or pledge the goods to
raise amount in the name of principal (Hammond, 2012).
5. Special agent : Special agent are appointed for particular task and on completion of such
task, the agency terminates.
2.4 Rights and duties of agent
Following are the rights and duties of an agent that would be required to be performed by
Ben once he becomes an agent :
Duties
 Agent must act as per instructions of his principal.
 He should not make any secret profits.
 He should fulfil fiduciary duty i.e. must act with honesty and integrity.
 He should protect principal's property in case of death or insolvency.
 He must act in good faith.
 He should maintain proper accounting records and remit the amount to principal
properly.
Rights Right of retainer : Agent has the right to retain the amount which is due to him from
principal.
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 Right of stoppage in transit : He can stop the goods in transit when he is personally liable
(Ye, Law and Chen, 2011). Right to claim remuneration : Agent has the right to claim remuneration as per terms of
contract. Right of indemnity : Principal would be liable to indemnify the agent where principal is
implied indemnifier and agent implied indemnity holder.
 Right to lien : Agent can exercise right to lien.
TASK 3
3.1 Monopolies and anti-competitive practice legislation in the UK
When any firm has control of more than 25 % over the market, then it is known as
monopoly of that firm. Monopoly exists when there is a single supplier in the market who
controls larger section of the market. This is also known as scale monopolies and complex
monopolies (Eren, Jaeger and Sremaniak, 2012). Monopoly is a threat for other existing
competitive organisations in the market place. Competition act regulates such monopolies so that
competition is enhanced in the market and as a result, consumers can get better quality products
at lower prices.
Competition Act, 1998 : The competition law prohibits two main types of anti-competitive
activities : Anti-competitive agreements : Chapter I, Article 101 of the act provides for prohibition of
all such arrangements, agreements or practices of business that seeks to prevent, distort or
restrict competition and which affect trade within UK and EU.
 Abuse of dominant market position : Chapter II, Article 102 provides for prohibition of
businesses which have significant market powers and such strong position is used for
unfair exploitation.
Enterprise Act, 2002 : The act provides for numerous measures to enhance enterprise including
strengthening of UK's competition framework and provides for consumer protection.
3.2 Role of Competition Commission and Office of Fair Trading
Competition Commission : This is the authority established under Competition Act
which monitors and regulates the anti-competitive practices in the market. It has the authority to
investigate the competition in the market (Hamilton and Freer, 2010). Competition Commission
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has been reformed as new Competition and Markets Authority (CMA) to regulate the
monopolies and anti-competitive practices.
Office of Fair Trading (OFT) : Office of fair trading has been merged with Competition
and Markets Authority which helps in decision making and publishes various information and
suggestions for regulating anti-competitive activities and monopolies in the market. It also deals
with suspected breach that can be made by a firm.
3.3 Dominant position within EU common market
A firm is said to have dominant position when it has control of 50% over the market. Any
abuse of such dominant position is illegal as per UK competition law. Article 102 of the act
prohibits the businesses who have strong market power and abusive use of dominant market
position (Law, Qi and Buhalis, 2010). Such dominant position creates monopoly in the market
by wiping out other suppliers.
Such firms can exploit consumers by :
 imposing unfair conditions
 limiting the product supply
 charging high and different prices
 adopting unfair practices of trade
The EU treaty seeks to
 provide protection to consumers,
 prohibits unfair practices of trade and
 prohibits abusive use of dominant position.
3.4 Exemptions under EU law for anti-competitive practices
The instances under EU law where exemptions are made to potentially anti-competitive
practices are :
 Individual exemption : The firm having dominant market position and indulged in anti-
competitive practices have to prove that such position and practices would have no
impact on the competition in the market and it would help in development of economy. Block exemption : It is applied to the agreements of the firm who have met individual
exemption.
 Parallel exemption : It is applied when the firm meets individual and block exemptions.
 Such practices are allowed in the cases where abuse is necessary.
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 In all these cases, profits would be distributed among consumers without any
discrimination.
Royal mail and postal services are the examples of such businesses in UK.
TASK 4
4.1 Different forms of intellectual property rights
Intellectual Property Act, 2014 regulates and deal with intellectual property and prevent
people from stealing and copying other's brand, copyrights, trademarks, patents and designs
(Intellectual property and your work. 2017). Patents : When any invention is done by a person, he has full right over such invention
and can use, sell and also prohibit the use of such patent by any other person. Trademarks : This includes signs, symbols, colours or marks that is used to distinct the
goods and services of one organisation from other. Copyrights : It is provided for the protection of original work done by any author so that
it is not copied or used by others.
 Designs : Design act provides for protection of designs such as 3D functional designs.
These are protected for a period of 15 years.
4.2 Principles relating to the protection of inventions
Patents are regulated by Patent Act, 1977 in UK and it provides protection to original
invention made by the patentee (Nica, 2013). He has full control over the patented invention and
get protection from patent office.
Section 1 to 4 of the act provides for process of registration of patents whereby three tests
are required to be fulfilled by patentee for availing protection of his invention :
 invention must be new
 it should have industrial use
 must not be obviousness.
Infringement of patent : In case patent has been used by an unauthorised person without the
permission of patentee, then, he can file suit against the person who infringed his rights. Court
can pass an injunction order and also order to destroy the infringing copies.
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4.3 Principles relating to copyright protection and their infringement
Government provides protection of original work done by any author so that it is not
copied or used by others (Chaffey and White, 2010). Copyright is the protection of expressed
new ideas and views of authors in tangible form. The original work of the author is protected by
various laws and statutes and the owner of copyright has the right to use, sell or reproduce their
original work. In UK, copyright work is regulated by Copyright, Design and Patent Act, 1988
which prohibits the unauthorised use of copyright work.
Section 9 to 11 of the Act provides the process of getting copyright protection and such
work is protected for 70 years after the death of owner.
Copyright is infringed when any other person uses or sells such work without the
permission of the copyright owner.
But certain defences are available to the infringer for use of copyrights :
 personal use
 religious purpose
 research work
 review
 library.
4.4 Comparison and contrast between protection of trademarks and business names
 Trademarks can be defined as any signs, symbols, colours or marks that is used to distinct
the goods and services of one organisation from other (Bowie, 2017). On the other hand,
business name is the name under which the operations of the company are carried out.
 Trademark is regulated by the Trademark Act, 1994 whereas business name is governed
by the Business Name Act, 1985.
 Trademark user has protection under laws and statutes and therefore, he can take legal
action in case of use of trademark by any unauthorised person but such protection is not
provided to business names (Trevino and Nelson, 2010).
CONCLUSION
In a nutshell, it can be concluded that various laws and regulations are established in UK
such as Sale of Goods Act, Consumer credit and agency, Competition law and Intellectual
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