Principles Of Business Law Management

Question: Task 1 (Drafting a letter of complaint) Violet is extremely upset. Four months ago she purchased a used car from 'Duggins Motors', a Seat Ibiza which had done 6,000 miles and cost her 5,000. The car came with a six month warranty. Two weeks ago the car broke down whilst Violet was driving to work. The vehicle was recovered by the RAC and taken to a local garage. The owner of the garage has told Violet that the vehicles central steering column has failed and that the car will need at least 4,500 worth of work performed. Violet has tried phoning Duggins Motors but finds it very difficult to get a response. She has now asked you to draft a letter of complaint for Duggins Motors. In the meantime Violet has needed to hire a vehicle for her job as a domicilary carer and this is costing her 300 per week. Draft the letter of complaint. Feel free to make up details of names, addresses and dates etc. However, you letter should include correct application of the appropriate law and a sensible course of action. Task 2 (Essay) In employment law, an employee can often have his or her status confused with that of an independent contractor; such confusion can result in an onerous burden for the employer. Discuss. Task 3 (Drafting Exercise) Stuart and Rolf have decided to go into business together running a hair dressing salon. Both have decided to contribute 50,000 towards the capital of the business. Stuart will be converting the ground floor level of his flat to use as a salon and Rolf will be supplying all of the equipment to be used in the salon, the hair-dryers, chairs, sinks etc. Both have decided to take a salary of 1500 per month. They would like an equal say as to how the business is run and hope that any disputes can be settled amicably. Both are established hair stylists and feel they can bring a strong client base. They wish to call their business A cut above the rest.(a) Draft the Ordinary Partnership Agreement that they will need. (b) After five years of running a successful ordinary partnership, Rolf and Stuart feel it might be appropriate to turn their business into an LLP. Explain the advantages and disadvantages of such a move. Answer: Task 1 To, Duggins Motors, 85, Scottish Street London E1W S21. Sub: lodging a complaint To whom it may concern, I am Violet Mason here to file a complaint regarding an issue that I have been trying to draw your attention to for the past couple of days. Four months before, I have purchased a car from `Duggins Motors. The car was a Seat Ibiza and it cost me 5,000. The car was a used car which had done 6,000 km. However, the car came with a six months warranty as per the policy and contract agreement of the company. Unfortunately, the car broke down two weeks ago.I was driving the car to work, but suddenly the car broke down in the middle of the road. However, RAC had recovered the vehicle and it was taken to a local garage. According to the owner of the garage, the central steering column has failed. Therefore, in order to fix that central steering column, I need to pay them 4,500 to the owner of the garage. I have beentrying to get through to you for the last couple of days but there seems to be no response from your end.As per the English contract law, Violet and Dugins Motors came into a con tract which is valid in nature. Contract is an agreement between two parties and more in order to give rise to a specific obligation for a particular consideration and it must be enforceable in the court of law. However, three basic elements are important for a valid contract, which are as follows: consideration, agreement, and contractual intention. For establishing a valid contract, a party must express the willingness to contract to another party for a particular time period with an intention. The contract can be bound by law if only the other party accepted the offer for a given consideration. An intention to create a legal relationship is the important factor. Anoffer can be made both verbally or in oralform.An offer must be distinct from invitation to treat. On the other hand, acceptance can be conducted either in oral form or verbal form.Acceptance has no legal binding unless and until it is being communicated in any form to the offeror.A promise cannot be enforceable under l aw unless it is supported with the element of consideration. Thus, consideration plays the vital role for making a contract enforceable under the court of law. It is important as per the English law consideration must be adequate and sufficient in form.Last but not the least, he most important element for a valid contract is the contractual intention. The parties must have the intention to make the contract valid and thus it can be enforceable under the court of law. In domestic matters, the scenario is different which can be observed form the case study of Balfour v Balfour [1919] 2 KB 571.In this particular scenario, the motor company Duggins Motor has promised me in the contract that they are bound to perform their warranty feature which they have provided me during the purchase of the car. Any type of provision which is included in the contract is considered to be the part of contract and therefore these terms of contract help to bind the parties under obligation.Thus, the brea ches of this particular term which are included in a contract lead to litigation. Among such terms warranty is included and the breach of contract will make the party suffer and answerable under the court of law.Warranties are the promise which is made by the parties against the product which is sold by him. In such situation, the seller is liable to repair the product within a specific time period as mentioned in the contract or else he will be responsible for the breach of contract.in many circumstance it is being noticed that warranties act as an underwritten promise which arises depending upon the mode of the transaction.But in this situation, the company has provided me with the warranty for six months against the sale of the car. Thus, the company is liable to reimburse the amount which is needed to be paid for repairing the central stirring or get the repair done themselves. Otherwise, I have the option to gotocourt for the matter of breaching the contract on the part of the company.Notwithstanding, the above mentioned aspects of this case, there is yet another point that I would like to bring to your kind notice.Ineed my car for my daily work purpose. I am adomicilarycarer. Thus,I need my car todo my job. Without a car it is hard for me to carry out my daily job. Thus, I have to hire a car which cost me 300 per week. This is the liability of the company to repair my car or provide me with a substitute vehicle till the car is not repaired. I have been trying my level best to contact with the company for lodging the complaint that my car has broken down and it needs to be repaired. However, the company is not at all bothering to reply me and to do a response against my calling. My daily expenses on the hired car is increasing because of this delay and legally this is categorized both as a liability of the company and negligent act on their part. According to the English law, extent of the liability that the defendant has to bare depends upon the breach o f contract conducted by the defendant.This is can be easily identified from the case study of Hadley v Baxendale(1854). Moreover, this case is a clear proof of the breach of the duty of care that Duggins Motor owes me as a consumer since the selling contract clearly states that there is a warranty of 6 months which I want tomake useofinthiscase. In the English contract law, remedies are available for the purpose of breach of contract such as: damages, action regarding the price factor and remedies for injunction. Breaching of a valid contract refers to breach of legal obligation. Thus, the defendant is liable for incur the damages which is being faced by the plaintiff. In this situation, the loss which is being incurred by me is the reliance loss. I have to take care of the fees for hiring the car for my job purpose. Thus, the company is liable for paying the fees which is incurred by me for hiring purpose. I have being trying to contact the company but the company did not take any action which represent that the company is bothering regarding the issue which is faced by me. Thus, the company is falling under the act of negligence and therefore the breach of contract has been done by the company. However, as per the law, damages must be paid by the company as it act as an award in order to compensate the damages incurred by me. As per the rule, I have the right to claim for the damages which has raised due to the breach of contract on the part of he company(Hadley v Baxendale1854). Task 2 It is often found that an employee of a firm get his or her status confused with that of an independent contractor. This section of the discussion will cover the relationship or the differences between independent contractor and the employee of a firm. Although the difference is vivid in local law however in case of foreign law the differentiating factors are almost similar which separates both. All country has got a unique set of factors which is almost same with many nations; still they try to come up with some distinguishing factors which will provide them a better place. In International employment law this generalization can be very useful. Most of the countries provide the contracts the lease to be legally independent to practice if they surpass to go through some basic hurdle of practicing law which are like taking the sole responsibility of running the independent business, this will include lot of things like meeting the client target, that too without any supervision, witho ut any office supplies, without any assistant, do your marketing on your own, without any hourly pay, vacation. So most importantly its about authority. If the individual is ready to accept to take the challenge and show willingness to take the authority most of the country upholds independent contractor status. In order to be an independent contractor there should be no relation or directives and regulation between the party and the company. An independent contractor agreement is a deed or a bond which is a promise to safeguard the future trust of the contractor, thus it is important to keep this agreement very clear between the two parties. The agreement should reflect the type of relationship that exist between the two parties and will consist the kind of terms they are about to land by the end of the deliverables. The agreement should not contain detailed information on how the work is going to be done. The company should not direct how the work is going to be done and should st ay silent how the contractor spends the money to get the work done for them. Relationship between both the parties should be very clear in order to overcome unavoidable circumstances and specially being investigated for tax related issues. A huge difference is being noted between an independent contractor and an employee. However, in present situation in UK the independent contractor are also termed as consultant.in many cases, it is relevant that employee and independent worker are working side by side with each other still there lies a lot of differences between the two. From legal point of view the differences are wider when it comes to employee and independent contractor. The basic difference is the job title of a contractor and he employee. Though job titles do not match the legal classification still they play a vital role for developing legal obligations. Job titles affect the employee in various dimensions such as legal benefits, tax benefits, employment benefits which are n ot seen in the case of an independent contractor. Employees usually work under and for a single employer but in case of an independent contractor, they tend to provide services to more than one individual or company. The working hour is set by the employer in case of the employee. But when it comes to independent contractor the working hours are being set by themselves. This is the basic confusion which is made by the employee in various situations. On the other hand, when it comes to benefits, the employee has the option to receive benefits from the employer regarding health or any kind of disability. Since an independent contractor work for their won they do not have the option to enjoy any kind of benefits from anyone. Usually the employees have to work under the control of the employer and the employer also directs them to execute the work. But independent contractor works on their own way and on their own schedule set by themselves. The tasks which are being allocated must be e xecuted according to the employee. But when it comes to independent contractor they execute their job on their own manner under their own authority. Employee has the tendency to avoid any kind of investment for executing their job. They always avoid to incur any kind of cost for establishing their allocated job. In order to perform the job if any kind of investment is required the independent contractors usually invest them as they work on their own way. Requirements of education are important criteria when it comes to employees. In many circumstances it is being noticed that the employers have conducted training programs in order to train them for the purpose of receiving better and quality performance from them. But he independent contractor already acquired their skills for performing their jobs and thus training programs are not required for them as they manage to do their own job. When it comes to the benefit of employee, it is relevant from various sources that employees have the option to receive compensation during the termination of the job because of unemployment. But when it is related to the independent contractor, they do not have the privilege to get or receive any kind of compensation from their clients after the particular is terminated. This is also a fact that if an employee get injured or fall sick during the working hours in the work place, then the cost of treatment which is required for the employee will be incurred by the employer. However, this benefit is meant for the independent contractor. In many cases, the employer cannot terminate the employee without presenting a good cause or reason for termination. But in cases of independent contractor, the client can move on if the contract or agreement between the contractor and the client is agreed upon a specific period of time. Employers have to follow the law, which are related to employment act, labour law, etc. This is because the relationship between employer and employee is lawful un der jurisdiction. On the other hand, anti-discrimination law and work-place safety law is considered in cases of independent contractor. Union can be formed by the employees but independent contractor does not have the right to form a union in the workplace. In United Kingdom if an individual is not working for a particular firm he or she can act or be an independent contractor. The contract will be done for the exchange of service only. Principle of at will employment do not exist in United Kingdom, therefore employees have quite a few security. Unless misconduct, redundancy or incapability issues they cannot be easily dismissed. However in this case, strict measures are taken and notices are given. An independent employee or a contactors job is much more volatile and catches more notice than any other job, it is the least secured job one can get. Taxation is also done differently to an employee to that of an independent contractor. An independent contractor has to pay off his taxe s on his own. It is important to maintain the differences between the independent contractor and employees. The differences are being discussed above regarding their status, privileges, benefits etc. If the differences are not being maintained properly, then it may affect the burden of the employer. Employer will definitely face problems with their employee in cases when the employees started following the privileges enjoyed by the independent contractor such as working in their own way, executing their work on their own time and execution of job without bothering anyone etc. as per the law, Execute an independent contractor agreement, and include proper documentation in the agreement that clearly states that a contractor is independent from the company, is self-employed, and will be responsible for final deliverables, not the method in which they are produced. Thus, it is important to maintain discrimination among the employee and independent contractor. Task 3 Partnership Agreement This partnership agreement is made and entered into this 5.2.2014 between Stuart and Rolf. Background The partners have the intention to associate themselves legally with each other for the purpose of carrying out a business.However, here are some of the terms and conditions are to be mentioned in the partnership agreement. In this agreement a brief idea of the capital which are invested by the partners for the purpose of carrying out their business. For establishing a partnership, it is relevant to mention the share of profit and loss regarding the business among the partners.The time period should be mentioned in the agreement to specify the validity period of the agreement.In the given scenario, Stuart and Rolf have decided to go into a partnership in order to run a business properly together.They have decided to carry out witha hair dressing salon as they both are hair stylist. In order to establish their own business they have decided to contribute 50,000 towards the capital of the business. On the other hand, Stuart will be converting the ground floor level of his flat to use as a salon and on the other side;Rolf will be supplying all of the equipment to be used in the salon, the hair-dryers, chairs, sinks etc. on the grounds of partnership they have decided to take a salary of 1500 per month. When it comes to ethics for each other in order to carry the business, they would like an equal say as to how the business is run and hope that any disputes can be settled amicably. However, they also decided a name for their shop and that is A cut above the rest. Partnership Books Partnership book is the book which must be maintained by the partner. In this book, the accounts of the partnership firm are being recorded and this book also includes the partnership agreement, the dos and the donts which the partner must follow for carrying their partnership properly. This partnership account must be kept by the partners at their work place. Fiscal Year The fiscal year of the Partnership shall end at the end of five years. Accountings The affairs which are being held n the partnership must recorded properly in the accounting book on the every end of the months: March, June, September and December. Therefore, it comes to that the counting records must be completed at the end of every three month every year. However, it is mandatory that this accounting record must be rendered to every partner in the partnership within 15 days after the closing of every here months. After each accounting is done, the net profit of the firm must be distributed among the partners. Time Devoted to Partnership Each Partner shall devote his or her undivided time and attention and use the utmost of his or her skills and ability in furtherance of the Partnership business. Management and Authority Every Partner might have an equivalent voice in the administration of the Partnership and should have power to tie the Partnership in making contracts and acquiring obligations in the name and on the credit of the firm. Be that as it may, no Partner might cause any obligations in the name or on the credit of the firm surpassing 500 without the express composed assent of the other Partner. Any obligation brought about infringing upon this procurement might be charged to and gathered from the individual Partner causing the obligation. Salaries Every Partner should be qualified for a pay of 1500 every month, which might be removed by the Partnership as a customary and important cost of doing business before determination of net benefits. The compensation of any Partner might, in any case, be expanded or lessened at situation when there prevail a mutual agreement among all the partners. Net Profit The expression "net profits" as utilized as a part of this Agreement might mean the net profits of the Partnership as controlled by sound accounting guidelines for every bookkeeping period accommodated in this Agreement. Withdrawal of Partner Partners have the option to withdraw from the Partnership toward the end of any bookkeeping period by providing the other Partner 30 days, composed notification of his or her aim to do as such. Alternative to acquire Terminated Interest On disintegration of the Partnership by the withdrawal or other demonstration of a Partner, the remaining Partner, on composed notification to the next Partner inside 15 days of the disintegration, may proceeds with the Partnership business by buying the enthusiasm of the other Partner in the assets also, great will of the Partnership. The remaining Partner might have the choice to enjoy the interest of the partner who is withdrawing himself from the partnership agreement. Purchase Sell Agreement on Death of Partner In the event that the Partnership is broken up by the demise of a Partner, the remaining Partner should have the obligation inside days from the passing of the perished partner to buy the enthusiasm of the expired Partner in the Partnership and to pay to the individual illustrative of the expired Partner the estimation of that enthusiasm as gave in Paragraph l7 of this Agreement. Amid this 15 days period taking after the demise of a Partner, the remaining Partner might proceed with the matter of the Partnership however the domain or individual illustrative of the perished Partner might not be at risk for any obligations acquired in the Partnership business that are more prominent than any sum includable in the bequest of the perished Partner that was already contributed or included in the Partnership and remained so on the date of death. The domain of the expired Partner should be committed to offer his or her Partnership enthusiasm as gave in this Agreement and might be entitled, at the race of the individual illustrative of the expired Partner, either to one-50% of the net profits earned by the Partnership business amid this 1 day period or to enthusiasm for the utilization amid this time of the perished enthusiasm for the Partnership business at the rate of 12 percent a year on the estimation of the partnership interest. This instrument include the sole agreement of the parties for forming a new business and the rights, duties, obligations are all set right in this agreement which the parties are bound to follow. Thank You ------------------Signature of the partner ------------------Signature of the partner In the given information in the case study, Stuart and Rolf have decided to go into a partnership in order to run a business properly together. They have decided to carry out with a hair dressing salon as they both are hair stylist. In order to establish their own business they have decided to contribute 50,000 towards the capital of the business. On the other hand, Stuart will be converting the ground floor level of his flat to use as a salon and on the other side; Rolf will be supplying all of the equipment to be used in the salon, the hair-dryers, chairs, sinks etc. on the grounds of partnership they have decided to take a salary of 1500 per month. When it comes to ethics for each other in order to carry the business, they would like an equal say as to how the business is run and hope that any disputes can be settled amicably. However, they also decided a name for their shop and that is A cut above the rest. If they want to turn their business into an LLP then there will prevail a lots advantages and disadvantages which are as follow: When all is said in done partnerships, every member is by and by in charge of the activities of the organization. This incorporates obligations, liabilities and the wrongful demonstrations of different partners. One playing point of a limited liability partnership is the liability insurance it manages. This kind of partnership structure secures individual partners "from individual liability for careless demonstrations of different partners or employees not under their direct control," expresses the SBA. What's more, individual partners are not actually in charge of organization obligations or different commitments. This is beneficial for an individual accomplice when potential claims or cases of carelessness against the business are concerned. Individuals in a partnership pay their own taxes. They fill their own file and they are not liable to pay taxes as a whole. The credits therefore are passed over the partners not to the partnership firm. Limited liability partnership is more fl exible compare to normal partnership agreement. Managerial duties are being set equally depending upon the partners. Bibliography: Andrews N,Contract Law(Cambridge University Press 2011) Anson W,Principles Of The English Law Of Contract And Of Agency In Its Relation To Contract(Clarendon Press 1899) Faure M, 'Liability For Omissions In Tort Law: Economic Analysis' (2011) 2 Journal of European Tort Law Gonzlez PridaDaz V and others, 'Contractual And Quality Aspects On Warranty' (2012) 29 Int J Qual Reliability Mgmt McKendrick E,Contract Law(Palgrave Macmillan 2011) 'Negligence.Defenses. Illegal Act Of Plaintiff' (1913) 27 Harvard Law Review 'Sales.Implied Warranty. 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