Legal Aspects of Business Management: A Case Study

Desklib provides solved assignments and past papers to help students succeed.

ROX: LAW FOR BUSINESS
MANAGERS

Table of Contents
INTRODUCTION................................................................................................................................................. 3
1. Contract and its requirements..................................................................................................... 4
b. Would Ringo be accountable to pay Paul based on the facts above?..........5
2. The criteria that needed to satisfy in an action for negligence........................6
3 Types of business mediums......................................................................................................................... 8
4. Importance of identifying the correct employment status of any workers
.................................................................................................................................................................................... 14
CONCLUSION.................................................................................................................................................... 17
REFERENCES.................................................................................................................................................... 18

INTRODUCTION
This assignment is prepared to provide insights into the laws formulated to
regulate the working of business managers. The business managers need to
abide by the laws for maintaining transparency and effectiveness of the
business operations. This assignment focuses on contract laws and its
application for the working of Ringo. In the given case the main issue is
Ringo has denied paying the amount to his son and second is George even
without thinking about the significance has cut down the trees. This has
resulted in damage to the customer’s shelter. Ringo is at present is running
efficacious gardening business known as Elixir Garden and approached for
legal consultation on a couple of matters.

1. Contract and its requirements
Contract in the UK is enacted through the supply of Good Act (HMSO 1994),
that is enacted for the protection of the rights of contracting parties. When
one party accepts the proposal of another party for engaging in business
activity contract comes into force. When two parties enter into the contract
with the other party they agree with the terms and conditions of the
contract. The contract is the agreement between the business parties. The
contract can be oral or written (Allen et al., 2016).
When two business parties decide to enter into a contract, they pledge to
comply with the norms of the agreement. This agreement assists the
contracting parties and the court to settle the dispute whenever arises. It is
also important to ensure the validity of the agreement by satisfying all
important constituents of business. In simple terms, the contract enters into
force at any time when one party offers something and the other party
accepts its proposal. It can be oral, written and also with actions. In this
case, the agreement between Ringo and his son can be called bilateral
agreement. A unilateral contract is something when one party promises to
return for the action of the other (Austen-Baker, 2017)
The essential of the business comprises offer, endorsement, deliberation
and objective of the parties, inevitability and capability. Offer is the initial
step of agreeing and it should be accepted to initiate the contract.
Acceptance is the offer protracted and in this step, the party who is offering
seeks the approval of the other party for the acceptance and rejection of the
terms and conditions of the contract. After this step comes to the
deliberation and in these contracting parties analyze the details of the
contract and agree with its obligations. The next step is a consideration and
as per this something must be swapped to have an authentic agreement.
Capability can be defined as each party must have legal capability and
competence to enter into the other party (Hudson, 2017).

Legality is the most important element of the contract and it is defined as
the products and services exchanged should be authentic and the intention
of the parties should also be clear. The contract to be valid should be
accepted by both the parties as per the terms and the conditions.

b. Would Ringo be accountable to pay Paul based on the facts
above?
The scenario given is that there is an oral agreement between Paul and his
father regarding the maintenance of the garden. The facts provided in the
case shows that there is no clarity of intention in the agreement which is a
crucial part of the contract. The agreement between Paul and his Father is
domestic and he along with his father did not follow any legal procedure to
enter into a contract. The terms and condition are not agreed on any paper.
All these factors show that there is no legal procedure followed and thus,
Paul is not liable to claim any amount from his father for the maintenance of
the garden. All the facts presented above do not make any concrete case
against Ringo (Hudson, 2017).

2. The criteria that needed to satisfy in an action for negligence
For the plaintiff to seek the compensation or win the case needs to satisfy
all the elements. The elements are damages, injuries and the losses to the
person or party suffering from the action of the other party. To hold the
defendant liable the plaintiff must prove that he has bear damages with
clear facts, testimony and proves. The elements are duty, breach of duty,
cause, in fact, proximate cause and damages (Graziano, 2019).
Law of torts covers the numerous remedies to prove the claimant wrong and
held him or her liable for his actions. The law of torts offers compensation
to the party suffering the damage. It does not have any provision of
punishment for the wrongdoer. In the given Jerry to seek compensation in
the court, he has to prove with clear facts, testimony that he is suffering
from losses due to the action or negligence of George. For the verdict in the
present case to be pronounced in the favour of Jerry, there is a need to
stratify three conditions. The first one is he should prove that George hold
the duty for taking care of the property and in the second clause he needs
to prove that George has failed in performing his duties and in the last
clause he needs to prove that due to the negligence done by the George,
jerry has suffered recoverable damage (Luntz et al., 2017).
In the present case, it was the responsibility of George to think about the
consequences carefully while performing his duty of clearing the trees from
the garden. In the similar case of Donoghue vs. Stevenson, the court has
pronounced that the defendant must show utmost care while performing the
duty and he or she should try to prevent from damages to someone‘s
property (Taylor and Elphick, 2019).
The second part consists of the actual breach of the duty, as the George just
to finish the task fast has shown no concern about the proper measurement
of the tree and they cause them falling on the customer’s roof. In the similar

case of Bolam vs. Friern, the clear process is established by the court for
assessing the impact of action causing damage.
It is crucial to identify that the damages done by the defendant are
recoverable or not. In the present scenario in the third condition, the
damages done are recoverable and the George must provide compensation
to the Jerry in monetary terms and it is justifiable. The amount to pay can
easily be established (Allen et al., 2016).

3 Types of business mediums
There are several business mediums which can be adopted by Ringo and his
friends John and Yoko. Some of the business mediums are also discussed
here along with their merits and demerits. These mediums are as follows –
SOLE PROPRIETORSHIP
It can be simply defined as the business carried out by a single individual.
This type of business organizations are completely managed and controlled
by one person only, who is popularly known as a sole proprietor. Since there
is no such government law which is required to follow in the organization.
Therefore, any special rules and regulations are also not required to carry
out business activities. For starting any sole proprietorship firm the person
needs to get the licence for the desired business (Dungan, 2010). If Ringo
and his friend John and Yoko want to start their business firms than sole
proprietorship is an appropriate business medium for them. They do not
need to follow any government guideline for carrying out their business
activities, also the profits if the business will not be distributed in others.
Advantages of a sole proprietorship
 Since the firm is fully owned and controlled by a single person, therefore,
the process of decision-making is quite quick.
 This business medium does not require any law to be followed by the
business entity for the activities such as maintaining accounts and other
business-related documents (Dungan, 2010).
 The main advantage of the sole proprietor is that all the revenue
generated from the business will not be shared by any other member it
will be enjoyed by Ringo, John and Yoko separately.

 Ringo, John and Yoko do not need to answer someone else as the owner
of the business for any casualty or mishappening of the business. They
are responsible and answerable to themselves (Dungan, 2010).
Disadvantages of a sole proprietorship
 The liabilities of the owner of a sole proprietor are very limited and
hence it can be one of the major limitations of the business (Dungan,
2010).
 Due to the control of only one person, the capital invested in the business
is also limited. In such business mediums, banks are also very cautious in
case of providing funds to them.
 Since the business and the owner are considered as the same entity,
therefore, the duration of the business is also not fixed (Dungan, 2010).
PARTNERSHIP
It can be described as one of the most common forms of business. The
partnership can be described as the relationship between the individuals
who come forward to carry out the business activities and to share the
profits of the business. In this type of business medium two or more persons
are involved in the activities of the business (Morse, 2010). According to the
UK partnership act 1890, there are some rules which should be followed by
the partners before carrying out the activities of the business. If Ringo and
his friends John and Yoko are desirable to start any business together than
this can be the best suitable business option for them. In a Partnership firm
Ringo, John and Yoko will invest capitals and the profits of the business will
also be divided among the three. In this, the responsibilities of the business
can be carried by all the three friends or just by anyone of them on behalf of
the other members (Morse, 2010).
Advantages of partnership

 This form of business medium is very easy to establish. But it involves
time in the processing of partnership documents and agreements
(Korchak, 2017).
 The partnership has the opportunity to have more capital as compared to
the sole proprietorship. As it involves all three friends Ringo, john and
Yoko as the owners of the business.
 The business will get the opportunity to foster the skills of all three
persons i.e. Ringo, John and Yoko.
 In this business medium, the workload of the business will not be wear
by the only one member but will distribute among other partners
(Korchak, 2017).
Disadvantages of partnership
 Profits of the business will be divided into three partners i.e. Ringo, John
and Yoko.
 Process of decision making can be slow as it might possible that all the
partners do not agree upon the same thing (Korchak, 2017).
 For any wrong deed or decision, the partners will be responsible for the
work of other partners (Korchak, 2017).
CORPORATION
It can be defined as the business organization which is considered spate
form their owners. In this type of business mediums, the ownership is
determined by the form of shares of the stock. In these businesses, the
owners have very limited liability and also they have very limited
involvement in the activities of the business. In such business firms, the
board of directors has been elected who is responsible for most of the
decisions of the business and also regulates and monitors the business

activities (Drucker, 2017). This business medium might not be suitable for
the Ringo and his friends John and Yoko. As they will not be involved in the
business and the business owner and profits will be shared by the
shareholders of the company along with them.
Advantages of corporation
 Life of the business is unlimited, it can be passing on from generation to
generations.
 Liability of the shareholders of the company is very limited (Drucker,
2017).
 Funds can be easily raised from the sales operation.
Disadvantages of corporation
 Corporation has to follow all the rules and regulations which has been
specified by the government of the country (Drucker, 2017).
 It has a very lengthy and time-consuming process than other forms of the
business mediums (Drucker, 2017).