Lecturers guide

Law for Business Students by Alix Adams© Pearson Education Limited 2000

Introduction

Law For Business Students aims to provide for the needs of students following a wide varietyof courses. It is a suitable sole text for many certificate-level courses and, with appropriateadditional directed reading, meets the needs of HND students and business studies under-graduates. Some suggestions for such additional resources are to be found in the firstappendix.

The book was prompted, in no small part, by observing the problems faced by students whohave to study a wide variety of law subjects as part of the requirements of their course. Suchstudents are not necessarily initially enthusiastic about having to study law at all. Whilethere is no substitute for an enthusiastic teacher, reading remains an essential part of success-ful study. Many texts use inaccessible language and are often unwelcoming. Others conveyinformation with reasonable clarity but, as one student told me, ‘lack atmosphere’. Manytexts present legal principles without any indication of their relevance in a business context.

Over thirty years of teaching has helped me to grapple with the problem of conveying com-plex legal concepts in a variety of legal disciplines in simple language, while endeavouringnot to lose essential subtlety and without clouding nice distinctions. As far as possible I havetried to make relevant such areas as the court system and the law of tort, which are not neces-sarily perceived by the student as part of the business world. The occasional joke may also beperceptible to the careful reader. Hopefully this approach will increase motivation as well asunderstanding in its student readers.

While Law for Business Students was written primarily for use by students, it may also beuseful to any lecturer faced – as many of us are – with the unenviable task of teaching a syl-labus including components which we have not studied for years, or (even worse) have sofar managed to avoid completely. Hopefully it can be used as a revision aid or an introduc-tion to further research in these circumstances.

Lecturers may also find it helpful to use the book in class. For example, the quizzes at the endof each chapter are a useful method of checking that the students are able to understand andapply relevant principles. Homework could be selected from the assignments in the text.This Lecturer’s Guide contains diagrams and charts from the book, together with new chartsand handouts, which can be used as visual aids to class teaching, for example as overheadprojector transparencies. There are also a number of suggested solutions additional to thosein Appendix 2 of the book.

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Suggested solutions

Chapter 5, Assignment 4

(a) Consideration, which is essential to the existence of a binding contract, has been definedas the price to be paid for another party’s promise or act (Dunlop v Selfridge). It has also beendescribed as a benefit or a detriment (Currie v Misa). Such terminology indicates that consid-eration must be of material value and amount to a new obligation for the party providing it.In general, therefore, it is true to say that a party does not provide valid consideration byagreeing to perform an existing contractual obligation in return for a promise of extra pay-ment. Exceptions to this general principle have, however, been acknowledged by the courts.

The general principle is illustrated by Stilk v Myrick. Here a ship’s captain, whose crew hadbecome depleted, promised the remaining crew members extra wages in return for their per-formance of the duties of the missing men. It was held that the sailors were not entitled toenforce this promise, which lacked consideration from them. Such extra work was to beanticipated as part of their existing contractual obligation.

The courts have acknowledged that consideration may be found in anything additional tothe existing contractual obligations. In Hartley v Ponsonby the facts were similar to those inStilk v Myrick, but the crew was much more depleted and the voyage home much longer.Here the captain’s promise was enforceable, since the crew had taken on a much more haz-ardous task than that intended by the original contract.

In Williams v Roffey the Court of Appeal stressed that the element of benefit to the promisorwas crucial. If performance of the contract by the promisee was of some special benefit oreven (as here) it permitted them to avoid a disadvantage, it might represent valid considera-tion, provided that the promise of extra payment had not been obtained by economic duress.Here the defendant, a building contractor, wished to avoid paying liquidated damages to hisclient for delayed completion. He promised to pay the claimant (his sub-contractor) extramoney to complete a carpentry contract. The claimant was experiencing severe financial dif-ficulties. Without the promise of extra money, the claimant would have gone out of business,preventing him from completing the work, with resulting delay to the defendant. Note thathere the claimant was doing no more than the original contract required. The fact that thedefendant avoided a disadvantage indirectly relating to the contract had provided considera-tion, making the promise to the claimant enforceable.

Arguably, such exceptions may be criticised as clouding the concept of consideration andmaking it difficult to predict the enforceability of such promises. However, they may provide ajust outcome and often, as in the case of Williams v Roffey, reflect common business practice.

(b) Although Bernard’s promise to accept a reduced rent is not contractually binding, Albert may

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well be able to use Bernard’s promise as a defence to Bernard’s claim for the balance of the rentup to the point when Wendy was told that she was permanently unfit to work. He might be ableto stretch it to cover the full 12 months. After that Bernard’s original rights will be restored.

Bernard’s promise to Albert is gratuitous: Albert is giving nothing in return and therefore it isnot contractually binding. Under The Rule in Pinnel’s Case, part payment of a debt does notdischarge the debt. Therefore, at common law Albert’s obligations remain unchanged byBernard’s promise and he is liable for all the rent arrears and must pay the full rent in future.

However, if the equitable principle of promissory estoppel is applicable, Albert may have agood defence to at least part of Bernard’s claim. Under this principle, developed by DenningJ in Central London Property Trust v High Trees House, a party to a contract who agrees to avariation in its terms may be effectively bound by it if it would be inequitable to the otherparty if the variation was withdrawn. In Coombe v Coombe, Denning LJ stressed that theprinciple provided a ‘shield and not a sword’. It did not make a gratuitous promise contrac-tually binding, but where it applied would enable a promisee to use the promise as a defenceif he or she were sued for breach of the original contract.

When using this equitable principle, the court examines the nature of the promise as well asthe circumstances of the individual case, including the moral rights of the parties, to deter-mine a fair outcome. Therefore, it is crucial that Bernard gave his promise entirely freely. Ifthere was any unfair pressure by Albert this would be evidence that it would be inequitableto enforce the contract (D & C Builders v Rees). How far Albert has relied upon the promisemay be relevant, as well as the current financial circumstances of the parties. The nature ofthe promise is crucial here. The courts have generally taken the view that such promises sus-pend rather than completely extinguish the promisor’s rights (Tool Metal Manufacturing CoLtd v Tungsten Electric Co Ltd).

It is evident that Bernard only intended to suspend his rights to full rent for 12 months at themost. We may assume that Albert’s financial problems were perceived as temporary by bothparties at the point when Bernard made the promise. The court would, therefore, not think itfair to deprive Bernard permanently of his full rights under the contract, even though Wendywill never again contribute to the family income.

Therefore, the only issue is when Bernard may assume his full rights. He will argue that he isentitled to do so at the point when it is known that Wendy will never work again, because hewould never have made the promise if he had known that this would be the outcome. Albertwill argue that he was relying on 12 months’ grace to accommodate his financial difficulties.In making their decision the court will take into account Albert’s conduct: any attempt toconceal the true position from Bernard would go against him. The nature of the caravan’s useis also relevant. If it is Albert and Wendy’s home rather than merely holiday accommodation,the court might be more inclined to allow them 12 months’ relief.

In conclusion, the rights of the parties will be determined by the application of the equi-table doctrine of promissory estoppel. Bernard’s contractual rights to rent arrears may bedeemed to have been suspended for at least three months by his gratuitous promise toAlbert, if it would be unduly oppressive to Albert to permit Bernard to renege on it. Possi-bly Albert might be allowed the full 12 months’ relief if this is deemed the fairest solutionto both parties.

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(a) A misrepresentation may be defined as an untrue statement of fact made by one partyprior to the formation of a contract, which induces the other party to enter the contract.Whether fraudulent, negligent, or wholly innocent, its usual effect is to make the contractvoidable by the innocent party: they may choose to opt out of it or continue with its perfor-mance. They may also be entitled to damages for losses resulting from the misrepresentation.

A statement of fact may be verbal, pictorial or derived from conduct. In Gordon v Sellico itwas held that the seller of a house, who concealed a structural defect with a piece of furni-ture, had misrepresented the state of the premises to the buyer.

A mere sales puff is not treated as a statement of fact; nor generally are statements of opinionor statements of future intention. A party who states a personal opinion from a position ofignorance will not be deemed liable for the statement (Bissett v Wilkinson). However if factsindicate that the misrepresentor could not reasonably hold the opinion, it can make the con-tract voidable. In Smith v Land & House Property Corporation a landlord who described atenant in arrears with his rent as ‘most desirable’ was held to be making a statement of fact.

A statement of future intention may be treated as a statement of fact if the maker has noactual intention of carrying it out. In Edgington v Fitzmaurice company directors invitedapplications for debentures, intending to use the money to pay off debts, though theirprospectus said that the business was to be expanded.

A forecast of future performance may be treated as a statement of fact where it comes froman authoritative source. Thus in Esso Petroleum v Mardon, predictions of sales for a fillingstation were treated as statements of fact when made by Esso’s experienced representative.

A misstatement of the law is not treated by the courts as a statement of fact. However, a mis-representation of the legal rights attached to property may be. Telling a vendor that premisesautomatically attract planning permission would be a statement of law, but it was held inLawrence v Lexcourt Holdings that misrepresenting the extent of planning permission thathad actually been granted was a statement of fact.

Failing to make a statement is not usually a misrepresentation. Questions should beanswered truthfully and sufficiently fully to give a true picture: Nottingham Patent Brick &Tile Co Ltd v Butler. Information must be updated if it changes before acceptance (With vO’Flanagan). A duty to volunteer information is rare but is also found if the contract involvesa fiduciary relationship (see part (b) below).

To make a contract voidable, the statement must effect the mind of the misrepresentee and bea principal (though not necessarily the only reason) for their entering the contract. Therefore,if they did not know of the statement prior to acceptance (Re Northumberland & DurhamDistrict Banking Co, ex parte Briggs), or they checked the information (Attwood v Small), itis not actionable.

The victim of misrepresentation is usually entitled to the equitable remedy of rescission anddamages if suing in fraudulent misrepresentation, where they must prove that the defendantlied or made the statement recklessly, not caring whether it was true or false. However, pro-vided a contract has resulted, they are usually better off suing under the MisrepresentationAct 1967, which covers all forms of misrepresentation. Section 2(1) allows a misrepresentee to

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obtain rescission and damages where the misrepresentor is unable to prove that they had areasonable belief in the truth of the statement. This puts the burden of proof on the misrepre-sentor, and covers both fraudulent and careless statements. Section 2(2) covers any statementnot made fraudulently, and therefore relates to careless and bona fide statements. It enablesthe court to award either rescission or damages, choosing the remedy that seems most just inthe circumstances. The Court of Appeal in William Sindall v Cambridgeshire County Coun-cil held that rescission should be withheld if the effect of the misrepresentation was minorand could be justly compensated with a small sum of damages.

(b) It is possible that the insurance company may refuse to pay Mort’s widow on the groundsthat the contract is voidable because of Mort’s misrepresentation. Mort gave some, but notall, of the relevant information. Telling less than the whole truth may amount to actionablemisrepresentation in any contractual situation, but is likely to be particularly influential in aninsurance contract. Such contracts are examples of contracts of the utmost good faith, sincethey involve a fiduciary relationship that requires complete honesty from both parties. Fail-ure to declare any information which a prudent insurer would wish to consider beforeentering the contract makes it voidable. In Hood v West End Packing failure by an insured totell the company that his goods would be transported on the deck of a ship instead of in thehold entitled the insurance company to refuse to pay out for their loss. Clearly the risk of losswas much greater if the goods were transported in this way.

In Mort’s case the situation is less clear cut. The company might well have wanted to find outmore about why the other companies refused Mort. The limited information given makes itimpossible to predict the outcome accurately, but Mort’s widow could be denied her pay-ment, if the court deems the missing information crucial to a prudent insurer.

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Healing should be advised that they may claim against Oswald or Grinders in private nui-sance. They may also claim in negligence against Grinders on the grounds that it isvicariously liable for Ned’s behaviour.

The private nuisance claims

Private nuisance protects the occupier against reasonably foreseeable and unreasonableinterference with peaceful enjoyment of land. Healing, as occupier of the premises affected, isentitled to sue Oswald because it is his land from which the alleged nuisance emanates. It isirrelevant that Oswald did not cause the nuisance personally, provided that he should rea-sonably have foreseen the damage. In Sedleigh-Denfield v O’Callaghan the defendantoccupier was liable for a flood on his neighbour’s premises which resulted from pipe layingon the defendant’s land by a third party. The defendant knew that a flood risk had been cre-ated. Oswald instructed Grinders to do the work; therefore it can be argued that Oswaldshould reasonably have foreseen the resulting disruption. Grinders is also potentially liablesince it has caused the noise and dust.

Actionable damage in private nuisance falls into two categories: tangible and intangible.Healing has suffered tangible damage to the swimming pool pump. It has also sufferedintangible damage: the dust on the pool makes it unusable and the noise has driven away itscustomers, depriving Healing of income, so its enjoyment of the land has been reduced. InAndreae v Prudential Bank dust and noise caused by building operations were deemedactionable. In Lyons v Gulliver, the claimant obtained an injunction against the defendantwhen queues outside the defendant theatre blocked access to the claimant’s teashop, thusdepriving him of customers.

However, in order to succeed, Healing will have to prove that the interference it has sufferedis unreasonable with regard to all the particular circumstances. Healing’s claim relating tothe broken pump is likely to succeed: interference that causes physical damage is usuallyproof of unreasonable interference. Suitability of locality for the defendant’s activity mayindicate that it is reasonable, where intangible damage is caused, but in St Helen’s SmeltingCo v Tipping, the House of Lords held that it was irrelevant where the damage is tangible.Mr Tipping’s claim for damage to his trees, caused by fumes from the defendant’s ironworks, was successful although he lived in an industrial area.

The dust making the swimming pool unusable is likely to be regarded as intangible damageunless it necessitates expensive cleaning operations. In an agricultural area it could beargued that some inconvenience from dust at harvest time is to be expected but the courtwould require proof that all practicable precautions had been taken by Grinders to keep itwithin reasonable limits. It would probably be better for Healing to claim compensation forthis as part of the claim for the broken pump, since loss of use of the pool would be a reason-ably foreseeable consequence of damage to the pump.

To decide whether noise is unreasonable, the court will look at its frequency, duration andintensity. Given the locality and time of year, noise from harvesting equipment is reasonably tobe expected. Three weeks may be a reasonable duration on a big farm. We are not told howmany hours a day it continues, but quite long working hours might reasonably be anticipatedat harvest time. The precautions taken by Grinders to reduce the noise will be relevant.

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Whether the noise is unreasonable will be judged by the needs of the ordinary inhabitant of thearea and is not dictated by the needs of the sensitive plaintiff (Robinson v Kilvert). Healing willnot get special consideration because of any special need for peace and quiet for their clients.

The negligence claim

Ned appears to have been negligent in disposal of his cigarette end. Under the rule inDonoghue v Stevenson he owes a duty of care to anybody he should reasonably foresee islikely to be affected by his behaviour. Dropping a lighted cigarette end in a field of stubble isclearly potentially dangerous to occupiers of adjoining premises and suggests the necessaryfailure to take reasonable care. The necessary causative link exists since, but for his behav-iour, the summerhouse would not have been destroyed.

Healing should sue Grinders, as it will be readily identifiable as a party and has the financialresources to cover the legal costs and compensation. As Ned’s employer, Grinders is vicari-ously liable for torts committed by Ned in the course of his employment. Smoking is likely tobe treated as coincidental to his duties: a careless way of doing his authorised job: Bayley vManchester, Sheffield & Lincolnshire Railway.

Even if he were breaking Grinder’s rules, the company would still be vicariously liable: inCentury Insurance v NIRTB an employer was liable for damage resulting from its tankerdriver smoking against orders while delivering petrol.

Conclusion

Healing is likely to succeed in an action for private nuisance against Oswald or Grinders forthe damage to the swimming pool pump, but is less likely to succeed in its claim concerninglack of use of the swimming pool, unless this is treated as a reasonably foreseeable effect ofthe pump being out of action. The noise claim is doubtful, given that Healing’s expectationsof peace and quiet may be unreasonably high in that location at that time of year. Healing isunlikely to have any problem in its claim for the summerhouse. Grinders will be vicariouslyliable for Ned if his behaviour is found to be negligent.

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(a) Under the Supply of Goods (Implied Terms) Act 1973 the party to whom goods are suppliedunder a hire-purchase contract has similar rights in relation to the quality of the goods to thoseof the buyer in a sale of goods contract. A buyer using a credit card has the rights of a buyerunder the Sale of Goods Act 1979 against the supplier of the goods. Since the Consumer CreditAct 1974 the buyer also may have similar rights against the credit card company.

A party who ‘buys’ goods under a hire-purchase contract gets them from a supplier butpays for them by instalments to the finance company. In law, they are hiring the goodsfrom the finance company, though with an option to purchase once all instalments havebeen paid. There is generally no contractual relationship between the hirer and the sup-plier of the goods; only between the finance company and the buyer. To ensure that thecustomer is properly protected, the Supply of Goods (Implied Terms) Act 1973 providesthat the finance company is liable if the goods are not suitable for their normal purpose, orfor any particular purpose specified to the buyer before the contract was made. Suitabilityfor purpose is a condition of the hire-purchase contract and, therefore, breach of the condi-tion entitles the hirer to reject the goods within a reasonable time of their receipt. It isirrelevant that information about suitability came from the supplier, as under s 56 of theConsumer Credit Act 1974 the supplier is treated as the agent of the finance company,which is therefore liable for those misrepresentations.

A party who purchases goods with his or her credit card often has dual legal rights if thegoods are not fit for their purpose. By buying the goods, the buyer forms a contract of salewith the supplier which gives the buyer rights to reject the goods under the Sale of GoodsAct 1979 if they are not suitable for their purpose (s 14(3)). The customer is entitled toassume that the goods will be suitable for any purpose to which such goods are usuallyput. If they have been specifically informed that the goods are suitable for a particular pur-pose, they are also protected if this turns out to be untrue, even if this use is not usual. Thecredit card user also has a contract with the credit card company and under s 75 of theConsumer Credit Act 1974 this may provide the customer with the same rights against thecredit card company. Provided that the cash value of the item is between £100 and £30 000,the customer can enforce against the card company any rights relating to a breach of con-tract or misrepresentation committed by the seller. This can be very advantageous to acustomer from a firm which has ceased to trade.

(b) Alan may claim that Ghettoblaster, as a party selling goods by way of business, is in breachof its obligations under s 14(2) of the Sale of Goods Act 1979, as amended by the Sale andSupply of Goods Act 1994, to supply goods of satisfactory quality. His rights to make a similarclaim against Lowcost under s 75 of the Consumer Credit Act 1974 are more problematic.

Section 14 of the Sale of Goods Act requires goods to be of satisfactory quality. The Actindicates that a variety of factors are relevant to determining such quality, and specificallyrefers to safety. Since one of the items appears to have caused a fire shortly after installa-tion, this indicates that it was already defective when supplied, which makes Ghettoblasterliable for the damage to Alan’s lounge. The fact that the equipment is second-hand doesnot prevent liability. A buyer of such goods may not be entitled to the same quality offinish or performance as the buyer of new goods, but all buyers are entitled to assume thatthe goods will be safe.

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Under s 75 of the Consumer Credit Act, as explained above, a credit card purchaser mayhave the right to pursue similar rights against the credit card company. However, Alan’srights will be determined by how the issue of the cost of the equipment is assessed. We aretold that the system’s overall cost was £320, which brings it safely within the lower limit of£100. The specifically defective item was priced at only £75. Unless a court is prepared totreat the contract as one for the whole system, composed of a number of items, as opposed toone of separately-priced items, a claim against Lowcost would fail. The Consumer Credit Act1974 was intended primarily to provide adequate protection for the consumer against thecredit provider and, therefore, a court might be prepared to interpret the contract in Alan’sfavour. However, this uncertainty means that Alan would be better advised initially topursue a claim against Ghettoblaster.

10 Law for Business Students by Alix Adams© Pearson Education Limited 2000


A purchaser in a contract for the sale of goods is protected as regards quality of goods by s 14of the Sale of Goods Act 1979 (as amended by the Sale and Supply of Goods Act 1994). Thismakes satisfactory quality a condition of the contract, provided that the goods are sold byway of business. The seller’s freedom to exclude liability for breach of this condition is radi-cally limited.

Section 14(2) of the SGA 1979 states that goods supplied by way of its business to a purchasermust be of ‘satisfactory quality’. Under s 14(2A) this means that the goods must meet a stan-dard which would be regarded as appropriate by the reasonable buyer. The court must takean objective view of the average buyer’s expectations, taking into account all the attributes ofthe goods, including their normal use. Price and description are also relevant. Section 14(2B)specifies a number of factors that may need to be considered, such as the appearance andfinish of the goods, freedom from defects, and their safety and durability.

Goods which do not work at all, or which are dangerous, are clearly not of satisfactory qual-ity. The fact that they are second-hand or sale goods is irrelevant. However, a buyer ofsecond-hand goods, or goods described as ‘seconds’ cannot expect the same quality of finish,or perhaps performance, as the buyer of new top-of-the-range goods. Even with new goods,the price paid is indicative to some extent of quality. The basic and therefore cheaper itemmay reasonably be of lesser quality than the luxury model. A Rolls-Royce runs more quietlythan a Lada car.

If the packaging and instructions that come with the goods are defective, that may also be abreach of s 14(2). Goods may also be deemed unsatisfactory because, although of adequatequality in themselves, they contain foreign bodies rendering them dangerous. In Wilson vRickett Cockerell coal was deemed not to be of appropriate quality because it containedtraces of explosives used in the mining process.

Section 14(3) states that, where the goods are sold in the course of business, they must besuitable for the purpose to which such goods are normally put. They must also be suitablefor any purpose specified by the seller, provided that the buyer has relied on the seller’sexpertise. Such reliance is implicit where the buyer purchases the goods without asking anyquestions, or without carrying out a knowledgeable inspection.

There are limits to the protection of s 14. Under s 14(2) the seller is not liable for any defects ofwhich the buyer knew or reasonably should have known. The seller may display a notice onthe goods specifying a defect. If the buyer chooses to inspect the goods, the seller will not beliable for any defects that should have been noticeable to the buyer, given the nature of theinspection. A superficial look at a car engine, for example, will not reveal latent defects. Theextent of the buyer’s knowledge is also relevant. If the buyer has no technical skill, somedefects would be invisible to him/her. A buyer who uses the goods for an unsuitable purposeor in an inappropriate fashion, or fails to follow the instructions, will also not have a claimunder s 14 if problems result. The protection in s 14 is specifically limited to sales by way ofbusiness. The buyer from a non-trader has no statutory protection in relation to the quality ofthe goods, unless he or she can prove, as in Beale v Taylor, that the issue of quality overlapswith the seller’s obligation to ensure that the goods match their description. Under s 13 this animplied condition in all sale of goods’ contracts, regardless of the status of the seller.

11Law for Business Students by Alix Adams© Pearson Education Limited 2000

Provided that breach is proved, liability is strict under s 13 and s 14. It is irrelevant that theseller did not personally attach the description, or cause or know of the defect.

A breach of condition entitles the buyer to reject the goods at any time before acceptanceand recover the price plus compensation for any other damage arising from the breach.Under s 35 the buyer is not deemed to have accepted the goods without adequate time toinspect them. In practice this may be interpreted as meaning time to find out their latentdefects. If a new washing machine refuses to work within a couple of weeks, the buyerwould be unlikely to be treated as having accepted it. If it was of satisfactory quality when itwas sold, it should still be working properly. Section 35(6) says that agreeing to have thegoods repaired is not necessarily evidence of acceptance. This is to protect the unfortunatepurchaser of a ‘Friday afternoon model’ who initially agrees to the repair of an apparentlyminor defect, only to find that others follow swiftly, depriving him of the use of his goodsfor weeks on end.

The buyer’s entitlement to satisfactory quality is further safeguarded by The Unfair ContractTerms Act 1977. Section 6 totally prevents the seller by way of business from excluding liabil-ity under SGA s 14 against a consumer buyer. If the buyer is not a consumer, liability may beexcluded or limited so far as is reasonable. Green v Cade Brothers illustrates the court’sapproach to determining reasonableness. A consumer buyer may also be protected by theUnfair Terms in Consumer Contract Regulations 1994 if he is able to show that the seller’sactions amount to a breach of good faith.

A consumer buyer purchasing from a seller who is a trader has very comprehensive legalprotection of rights to the satisfactory quality of goods. The non-consumer buyer is also ade-quately protected. However, when buying from a non-trader, the purchaser cannot takequality for granted and should take care to ask relevant questions and to carry out a properinspection, since s 14 of the SGA does not protect the purchaser in these circumstances.



An employer owes both common law and statutory duties to take care of the health andsafety of employees. Breach of these duties may lead to liability in civil or criminal law. Howeffective such regulation of employers may be depends not only on the employer’s aware-ness of the relevant obligations but also on the extent to which the liability is enforced.

An implied term of the contract of employment makes the employer personally responsible forthe safety of employees. The employer must take reasonable care to provide reasonably safeworking conditions. Action for breaches of this duty are usually brought in tort. Liability isfault based. The employer is liable for failure to take reasonable care to prevent a hazard ofwhich he knew or reasonably should have known. The duty is made up of three interdepen-dent branches: the provision of (a) competent staff, (b) safe plant and equipment, and (c) a safesystem of work. Staff who are not properly qualified and/or trained may a danger to others. InHudson v Ridge Manufacturing, a practical joke by one employee caused injuries to another.Previous incidents should have alerted the employer to this risk and consequently theemployer was liable for the damage. In Pagano v HGS the claimant was injured through failureof his employer to maintain works vehicles in a roadworthy condition. Safe working pro-cedures are also crucial to employee safety, for example when handling dangerous materials orworking off the ground (for example window cleaning or tree felling), but an office floor maybe dangerous if not kept free from hazards. Most injuries at work are physical, but stress result-ing in mental illness may also be actionable (Walker v Northumberland County Council).

Apart from personal liability, an employer may also be vicariously liable for the torts ofemployees, provided that they were committed in the course of employment. The behaviourmust have been incidental to the performance of authorised tasks. This may provide theroute to a successful claim where the employer is not personally liable because he was notaware of the danger. In Harris v Michelin Tyre Co Ltd a practical joke committed by anemployee in the course of employment injured the claimant, making the employer vicari-ously liable. There were no previous instances of such behaviour by the employee and theemployer was not personally liable.

An employee may also sue for damage caused by a breach of statutory duty by the employer,provided that this is expressly or impliedly permissible under the terms of the legislation, forexample regulations made under the authority of the Health and Safety at Work Act 1974(HSAWA). The claimant must show that he/she is a member of the class of persons protectedby the legislation and that the damage he/she has suffered is of the relevant kind. Thedamage must also be shown to have arisen from the breach of duty. The liability imposed bylegislation may be fault-based or strict. Fault-based duty is often limited to what is reason-ably practicable. The likelihood of accidents, the seriousness of injury and the resources ofthe employer are all relevant to determining breach in such cases.

Employees therefore have a variety of ways in which they might seek compensation fromtheir employer for injuries at work. How effective this legal protection is, in practice, will bedependent on a number of circumstances. It is up to the employee to initiate proceedings.Employees may be unaware of their rights or fearful of exercising them. In a non-unionisedworkplace, access to legal advice and assistance may be a problem.

The employer is also subject to criminal and administrative legal regulation throughHSAWA, and to a huge variety of statutory regulations, many of which have been prompted


by compliance with EC Directives, for example the Management of Health and Safety atWork Regulations 1992. The HSAWA s 2 imposes a general duty on employers to ensure ‘sofar as is reasonably practicable the health, safety and welfare of all their employees’. Theemployer with a work force of five or more must have a written and up-to-date health andsafety policy, and employees must be properly notified about it. Employees are required bys 7 to take reasonable care for their own health and safety and that of others and to co-oper-ate with the employer to enable them to carry out their statutory duty. The Health and Safetyat Work Executive [HSE] was created by the Act and is empowered to supervise and inspectworkplaces to check that all relevant safety legislation is complied with. Section 21 enablesan inspector to issue an improvement notice requiring an employer to correct defects withintime limits. If there is a danger of serious personal injury, s 23 enables an inspector to issue aprohibition notice to prevent continuance of the danger. Criminal prosecution of anemployer for breaches of statutory duty or any other relevant crime is also possible. Death ofan employee might therefore result in manslaughter proceedings against an employer.

How well the HSAWA and other legislation protect employees depends on a number of fac-tors. Responsible employers will be glad of guidance about current legislation and do theirbest to comply. However, not all employers are responsible and can only be brought into lineby adequate policing. The HSE has been criticised for having insufficient inspectors and forbeing unwilling to use criminal sanctions, even where deaths of employees have occurred. Ifmanslaughter charges are brought, the law currently makes it very difficult to impose liabil-ity effectively on corporations. It is unrealistic to expect hazardous conditions to beprevented by chance inspections; therefore, unless the employer’s behaviour is reported tothe HSE, dangers may continue. In a unionised workplace the matter may be resolved inter-nally or, in extreme cases, be reported. Elsewhere employees may well be reluctant to act as‘whistle blowers’.



Entitlement to a redundancy payment is governed by the Employment Rights Act 1996. Theemployee must prove that he or she has been employed for a requisite minimum period, iswithin the statutory definition of an employee and has been dismissed because of redun-dancy as specified by the Act. In the event of a dispute with the employer about entitlement,the employee may bring a case before an employment tribunal. Claims must generally bebrought within six months of the date when the employee’s notice expired, but the tribunalmay be prepared to grant a time extension if this is deemed fair in the circumstances.

Under the Unfair Dismissal and Statement of Reasons for Dismissal (Qualifying Period)Order 1999, an employee must have worked for the relevant employer for at least one yearprior to receiving notice of redundancy. Not all ‘employees’ in the lay sense of the word areentitled to claim. They must have been employed under a contract of service or apprentice-ship. Even then, under the Act, certain types of employee are ineligible, including peopleover retirement age.

The employee must prove that he or she was dismissed actively or constructively within thedefinition given by s 136. In the context of redundancy, dismissal would be constructive if theemployer died or was a company that had been wound up. It could also arise from reloca-tion. Dismissal does not occur where an employee has warning of the threat of possibleredundancies and leaves in advance of actually being dismissed.

The cause of the dismissal must have been redundancy. Section 139 states that this may occurin three separate types of circumstance. First, where the employer stops carrying on the busi-ness operation in which the employee was engaged. Second, where the employer ceases tocarry on business at the location where the employee works. Third, where the employerreduces the size of the workforce by restructuring or changing production methods. Redun-dancy of an employee does not automatically occur in such circumstances, as the employermay attempt to provide redeployment. An employee who is dismissed after refusing an offerof suitable redeployment cannot claim for redundancy (s 138(1)). The issue of what is suitableis a question of fact. It is determined by the tribunal in the light of the particular circum-stances, such as travelling distance, the new job description and payment as compared withthe previous employment. An employer is expected to act sensitively but there are limits tothis. Thus in Fuller v Stephanie Bowman a secretary who refused to transfer to a nearby officebecause it was located above a sex shop was deemed to have refused suitable redeployment.

Lastly, redundancy may result from relocation of business premises, though again this is notautomatically so. The terms of the contract of service may permit the employer to require theemployee to work at any of the employer’s places of business. Even if there is no relevantcontract provision, relocation may not be treated as a cause of redundancy, unless compli-ance would place an unreasonable burden on the employee. The need to move house orundertake an unreasonably lengthy journey to work will be relevant here. In O’Brien v Asso-ciated Fire Alarms an employee was deemed to be constructively dismissed by reason ofredundancy. He had previously worked in Liverpool and when that operation was scaleddown by his employer he refused to be relocated in Barrow-in-Furness.

Under s 138(2) an employee who takes up an alternative post has at least four weeks todecide if it is workable without prejudicing rights to redundancy pay.


Provided that the employee is able to prove that he or she has been made redundant underthe ERA 1996, they will be entitled to a statutory redundancy payment. The extent of entitle-ment depends on the age of the employee and the number of years of service with therelevant employer. Within these limits the payment is calculated on the basis of the value of aweek’s pay, which is currently subject to a maximum of £220. For example, a person ofbetween 41 and 64 is entitled to one-and-a-half weeks’ pay for each year’s service up to amaximum of 20 years.

An employee may also be entitled to any compensation available to an unfairly dismissedemployee, if he or she can show that they were unfairly selected for redundancy (s 105), forexample because of trade union involvement. Alternatively, they may claim that the selectionmethods used by the employer were unfair under s 98. Such methods must operate, forexample, subject to objective and reasonable criteria. Appropriate consultation must beinvolved, including reasonable attempts to provide redeployment.

An employee who loses his or her job because their employer reduces the size of the work-force or restructures the undertaking cannot, therefore, automatically claim to be entitled toredundancy payment. Provided that they fulfil the requirements of the ERA 1996, they areonly entitled to a relatively small payment, unless they can also provide that their redun-dancy arises from unfair dismissal.



If Sharp and Cool’s business is doing well it could be in their interests to incorporate it as alimited company. This need not be a complex or expensive task. On incorporation, their busi-ness enterprise becomes a legal entity with a separate existence from them, with its ownproperty and sole responsibility for its legal liabilities. It can provide them and any othercompany members with limited liability for future business debts. Incorporation could helpthe expansion process in the long term by facilitating the raising of capital.

Incorporation is a formal process, governed by the Companies Act 1985 (as amended). It alsoinvolves on-going statutory duties, like making an annual return to the Companies Registry,and holding an annual general meeting. However, deregulation permits a small private com-pany to opt out of some of these requirements.

When they originally set up their business partnership, Sharp and Cool did not have to fulfilany prescribed legal formalities; setting up a company is rather more complex. Incorporationof a company involves registration with the Companies Registry, which investigates all pro-posed companies to ensure that, for example, they are likely to be financially viable, they arereasonably likely to succeed and they exist for a legal purpose. The promoters must presentcertain documentation for inspection, including the memorandum and articles of association.Fees are payable for registration. Sharp and Cool may need the services of a solicitor to assistin drawing up the relevant documents, but it is possible to complete the formalities them-selves. They could also save themselves time, effort and cost by buying a dormant companyfrom an ‘off-the-shelf’ provider. Such companies are usually registered as a ‘general commer-cial company’ and fit the objects of any business. Sharp and Cool would only have to registerthemselves as directors and change the company name.

As Sharp and Cool have been operating a relatively small business, and have no immediateaccess to large amounts of capital, they will initially only be able to register as a private com-pany. This is one with capital of less than £50 000, the shares in which are usually held by theprevious partners and perhaps their family or associates. The ability to transfer such shares isrestricted by the articles of association, which generally require permission from the share-holders. The shares of a private company cannot be advertised for sale to the public andcannot be sold through the Stock Exchange. Generally a shareholder is not entitled to transfertheir shares without permission from the others. Therefore, unless Sharp and Cool have anumber of wealthy associates prepared to become substantial shareholders, they will notobtain immediate access to more capital from shares.

On registration all shareholders may enjoy limited liability. This is indicated by the abbrevia-tion ‘Ltd’ following the private company’s name. This means that their financial liability forthe company is limited to the value of their shares. Consequently, if the company should fail,the shareholders, while losing the value of their shares, do not have to make any further con-tribution to pay off the company’s creditors. This is clearly an advantage to Sharp and Cool,who as partners will so far have been jointly and severally liable for all the business debts. Italso means that, if the way they run the company results in a breach of contract or tort, theywill not be personally liable.

After incorporation, the company’s property becomes its own as opposed to being held in jointownership by partners. This provides some tax advantages for Sharp and Cool. Also, they couldobtain a loan by issuing a debenture to a willing lender. This is a loan secured by a charge on the


company’s property which entitles the debenture holder to interest and repayment at a later date.However, for Sharp and Cool, as directors of a small company, this advantage may be morenotional than real. If they obtain a loan from a bank they will almost certainly be asked to mort-gage their homes to secure the loan, just as if they were still merely partners.

If, after incorporation, the business continues to expand, Sharp and Cool may be able to turntheir business into a public company. This is possible if the company has limited liability andthe authorised capital is at least £50 000 of which at least 25 per cent has been paid up. Thememorandum of the company will have to be altered to indicate the new status, and agree-ment for this will need to be obtained from the shareholders at a general company meeting.The company may then be re-registered as a public company with consent from the Compa-nies Registrar. It will then be known as Sharp & Cool Computers plc. This step would greatlyfacilitate raising capital, as the shares and debentures of a public company may be advertisedfor sale to the public and may be transferred on the Stock Exchange. As Sharp and Cool seemvery concerned about attracting outside capital, they should, however, be aware that incor-poration may not provide a solution in the short term.

Sharp and Cool should appreciate that, if they incorporate their business, knowledge of itsaffairs becomes public property. Particulars of the company in the registration documents,like the names of the directors and the location of its registered office, can be inspected at theCompanies Registry by any member of the public. The Companies Act 1985 requires theseparticulars to be updated on an annual basis (the annual return). This includes providing acopy of the company’s annual accounts.

The Act also refers to the need for a company to hold an annual general meeting and appointauditors on an annual basis. However, Sharp and Cool need not be too daunted if their busi-ness is merely in effect an incorporated partnership. The Companies Act 1989 brought in ameasure of deregulation to assist small businesses. For example, it is possible for a smallcompany to decide to opt out of these particular requirements.

In conclusion, if Sharp and Cool’s primary motive for considering the incorporation of their busi-ness is to obtain access to outside finance, they may be disappointed in the short term at least.However, provided that their business is currently sufficiently viable, it may be incorporatedwith limited liability, which provides Sharp and Cool with protection against responsibilities forthe company’s finances or legal liabilities. In the fullness of time a change in status from privateto public company would open up wider opportunities for obtaining capital.



(a) The rights of shareholders to requisition company meetings

An extraordinary general meeting should only be called where the matter is so urgent that itcannot wait until the next annual general meeting. Section 368 of the Companies Act 1985enables shareholders to requisition an extraordinary general meeting in certain circumstancesregardless of the requirements for the calling of meetings in the company’s articles.

The shareholders seeking the requisition must jointly hold at least 10 per cent of the paid-upshare capital. They must deliver notice of the requisition to the registered office of the company,indicating why the meeting is being called. This must be signed by all the relevant sharehold-ers. This obliges the directors to issue notice of the meeting, which must take place within nomore than 28 days of the notice being issued. If they fail to do so, the requisitioning sharehold-ers (or any of them who represent at least half the total voting rights of the whole group) arethen personally entitled to convene the meeting. The expenses of doing so may be recoveredfrom the company, which then deducts the relevant sum from the directors’ fees.

Where the company articles make no provision for members to call meetings, under section170(1) any two or more shareholders with at least one-tenth of the issued share capital may calla meeting without the requisitioning formalities.

We are not told how big Wye & Co is. If it is a large company, concerned shareholders mayhave difficulty and suffer considerable expense in contacting the others to find out whetherthere is sufficient support to enable the requisition to take place.

(b) Rights of shareholders to control the powers and duties of the board of directors

The directors are responsible for the day-to-day running of the company. Their powers andduties are specified by company legislation and by the company’s articles and memorandum.Directors’ decisions may be successfully challenged by a majority of shareholders through res-olutions at general meetings. If only a minority of shareholders has concerns, this may beproblematic. Voting power may be dominated by the board of directors, who may be themajority shareholders.

The shareholders of Wye & Co must remember that they have no automatic legal right to a div-idend. The directors must recommend payment before members are able to consider usingtheir powers to declare a dividend by ordinary or written resolution. Given that the Companyhas been trading at a loss, the directors may be justified in not recommending a pay-out.

However, the failure of the company to thrive may indicate failure of the directors to fulfil theirlegal duties to the company. Even if the poor performance of the company may be otherwisejustified, the huge rise in the managing director’s salary provides grounds for shareholderintervention.

Such a decision by the directors may be evidence of negligence or a breach of their fiduciaryduty. It is difficult to believe that the decision was made in good faith, since this appears to bein direct conflict with the company’s interests. The contract is voidable by the company onthese grounds if challenged successfully by the shareholders.

The rights of minority shareholders to challenge the directors’ behaviour is limited and largelyineffective at common law. The rule in Foss v Harbottle effectively prevents the individual


shareholder from challenging a director’s behaviour where this is potentially damaging to thecompany’s interests. The rationale for this rule is that the company has the right to take actionto protect itself, which makes action by the individual on the company’s behalf a redundantexercise. However, it leads to injustice where the directors have the voting power to preventintervention by shareholders. To succeed in a legal action against the company the sharehold-ers would have to prove that the directors have acted ultra vires (exceeded their powers), orfailed to comply with the procedures laid down in the company’s articles, or acted fraudu-lently. Fraud is only successful where an intention to deceive, or reckless behaviour, have beenproved. None of these circumstances are apparent on the face of the given facts.

Statute provides some limited rights for a dissatisfied minority but most of these are irrelevantto the case of Wye & Co. If there is proof of serious abuse by the directors of their powers, theshareholders may (Companies Act 1985 s 431) seek a Board of Trade investigation, providedthat a minority of at least 200 shareholders or those holding at least one-tenth of the issuedshares wish to take this action. This investigation may lead (s 124A of the Insolvency Act 1980)to a petition from the Secretary of State to wind up the company on just and equitable grounds.

The Companies Act 1985 s 459 may be more helpful. This enables a company member to peti-tion the court, on the grounds that the company’s affairs are being managed in a way thatunfairly prejudices the interests of the shareholder. Proof that the director’s financial interestsare being prioritised at the expense of the company and its individual members may well besufficient proof. If the claim is successful, the court may issue various orders, including one toregulate or restrict those involved in the management of the company.

If Wye & Co is a listed company, it is subject to the advisory Combined Code imposed by theStock Exchange. This requires the Company to put in place open and transparent proceduresfor determining the remuneration of the executive director and inform the shareholders ofthese. The Code also requires that the level of remuneration should be determined by thepolicy of a committee of non-executive directors. Failure to comply with the Code may be addi-tional evidence of unfair prejudice, as it points to a breach of prescribed good practice.

Action under s 459 seems the best strategy for the shareholders, since even if they requisition ameeting the weight of voting power may still be against them.



Copyright, which is regulated by the Copyright, Designs and Patents Act 1988, is a form ofintellectual property which protects its owner (the copyholder) for at least 70 years againstthe unauthorised reproduction of a large variety of original works. The Act gives a copy-holder a number of rights, including that of licensing the use of their work by others, andenables them to take action at civil law if their work is reproduced without their consent. Nowork of any kind attracts copyright while it is purely an idea in the mind of the creator. Onceit is drawn or written down, or on film, audio tape, video tape or computer disk, it exists in apermanent form. Provided that it falls within the criteria explained below, it is then capableof being protected by copyright.

Under s 1 of the Act, copyright covers the following: original literary, dramatic, musical andartistic works, sound recordings, films, radio and TV broadcasts or cable programmes, andtypographical arrangement of published works. To obtain copyright protection the work,whatever form it takes, must be ’original’ within the meaning of the Act. This does not meanthat the work must be unique, though it is essential that it is not a copy of somebody else’screation. Originality derives from the degree of the independent efforts of the creator, whomay well be presenting an account of factual events already available elsewhere. For exam-ple, an historian or biographer will not be in breach of copyright unless their account of, forexample, the Civil War or the life of Martin Luther King, too closely mirrors the form ofwords used by a previous author. There is a wide variety of street and road atlases all ofwhich convey identical information, but have originality because of the way the informationis presented.

Other definitions of words in this part of the Act require some explanation. ’Literary’ doesnot just cover books. Anything written, including letters, computer programs, statistical com-pilations and other tables, is included. ’Artistic’ does not just relate to works of art likepictures and statues, but refers to a wide variety of graphic forms, including maps, diagramsand designs. A design (e.g. for clothing) may attract additional statutory design rights to itsowner, which relate to reproduction of items made to the pattern of the design. These rightsare quite distinct from copyright. ’Dramatic and musical works’ include play scripts, musicalscores and also choreography for ballet and dance. Where a work is performed, rights otherthan copyright may exist, as the participants in a performance of any of these may claim per-formance rights. Such rights are, for example, breached if the performance was copiedwithout their consent, by means of illicit video or audio recording. Copyright is createdinformally and automatically exists, provided that the work has sufficient connection withthe UK. This will exist merely because first publication of the work takes place in the UK. Itcan also arise because of the author’s UK nationality, or domicile or residence. The durationof copyright depends on the form of the work. Literary, artistic, dramatic and musical worksare protected for 70 years from the death of their author. The other relevant works are pro-tected for 70 years from release into the public domain.

It is important to understand that the copyholder is not necessarily the creator of the work.Usually the creator is the original owner, but a copyright, like any other form of property, isfreely transferable by its owner, who may sell it, or make a gift of it during his/her lifetimeor by his/her will. Ownership may also be lost involuntarily if the owner becomes bank-rupt, since copyright will form part of their assets. As long as the copyright lasts, the newowner benefits from it. However, it is quite common for the creator of a work not to be the


owner of the copyright. If the work is created by an employee, the copyright usually belongsto the employer, even if the work was created on the employee’s own initiative in their sparetime, as long as it is sufficiently related to the scope of the employee’s work. Copyright inworks created by Crown employees belongs to the Crown and lasts for 125 years under s 163of the Act.

The copyholder has exclusive rights to control all reproduction of the work and its adapta-tion or public presentation. Any relevant activity without the copyholder’s permission maybe an infringement of their rights under the Act. For example, adapting a novel, which is stillwithin copyright, as a screenplay is an infringement. Publishing a photograph of somebodyelse’s original picture may also be a breach of copyright. The issue of profit for the copymaker is irrelevant; taking an unauthorised photocopy for purely private purposes is stillcapable of being a breach. Taping a CD for a friend, or letting them put the computer pro-gram which you have bought on to their PC, are still capable of being infringements. Limiteddefences are, however, provided by the Act, to cover private study activities or to producelimited quotations for certain purposes like a critical review.

The infringements described so far are defined as direct infringements. The Act also providesrights for the copyholder in the event of secondary infringements. These occur where copy-right has been exploited commercially and concern, for example, the sale or importation ofinfringing items like bootlegged computer software. A copyholder may licence reproductionof their work. They may be prepared to allow limited reproduction free of charge in a goodcause. For example, a playwright might permit their play to be performed in order to raisefunds for charity. A fee can also be charged where a contractual licence is granted – for exam-ple where an author sells the screen rights in their work to a film company.

Where a breach of copyright occurs, the copyholder is entitled to take civil action. If success-ful, they may be entitled to an injunction to prevent the breach occurring or continuing. Ifthey have suffered any loss from the breach, they may be entitled to financial compensationin the form of damages.

It can be seen, therefore, that copyright protection attaches to a wide variety of original writtenand graphic work, as well as musical compositions, film, video and other broadcasts. Thecopyholder has extensive legal rights, for a limited period of time, to control reproduction oftheir work and also to obtain compensation from a party who infringes their copyright.


OVERHEAD TRANSPARECY MASTERS AND STUDENT HANDOUTS

These pages may be photocopied. They are taken from the following pages in Law for Business Students:

Page Fig 1.1 3Fig 2.1 13Fig 2.2 15Chapter 6 70Chapter 6 71Chapter 10 127Fig 10.1 134Fig 12.1 163Fig 14.1 183Fig 14.2 183Chapter 15 192Chapter 20 264Chapter 21 287Fig 26.1 332Fig 26.2 346


Classification of English Law

English law

Public law Private (civil) law

Constitutional andadministrative

law

Criminal law

Contract

Company andpartnership

law

Property

Probate

Familylaw

Tort

Negligence Nuisance

Damage tobusinessinterests

Land Intellectual

Chattels

Fig 1.1


Fig 2.1

House of Lords

Court ofAppeal

Criminal Division

Appeals SentenceTrial of

indictableoffences

Magistrates’Court

DivisionalCourt of

Queen’s Bench

The Crown Court

The criminal court structure


Fig 2.2

The principal civil courts and appeal routes

House ofLords

Court ofAppeal

Civil Division

Queen’sBench

Division

ChanceryDivision

FamilyDivision

The High Court

CountyCourt

Leap-frogprocedure

Chapter 6

Determining the status of an innominate term

Cehave NV v Bremer Handelgesellschaft(The Hansa Nord) CA 1975

1 The parties specify intention

2 Statutory rights

3 Trade practice

4 Extent of damage


Chapter 6

When are exclusion clauses binding?

1 When incorporated in the contractIf sufficient notice by offeror when contract made.

2 When clearly expressedThe contra proferentem rule: ambiguity interpreted inthe way least favourable to the party seeking to enforcethe exemption.

3 When effective under UCTA 1997Protects consumer and non-consumer buyers.Business seller.

4 When comply with Unfair Terms inConsumer Contract Regulations 1994Protects consumers only.Standard form contracts.Business seller.


Chapter 10


CIVIL LIABILITY FOR DEFECTIVE GOODS

CONTRACT NEGLIGENCE

Buyer v Seller Buyer/User v Manufacturer

Sales of Goods Act 1979

Liability – strict Liability – fault

Dangerous or defective in quality Losses caused by dangerous goods

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Fig 14.1

Contractual relationships in credit card sales

Supplier

Customer(debtor)

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Regulatedconsumer credit

agreement

Credit cardcompany(creditor)

Pre-existingagreement


Fig 14.2

Supplier

Negotiates and informs

Contract ofsale

Debtor

Contractof hire-purchase

Creditor(finance company)

Contractual relationships inhire-purchase contracts

Chapter 15

Creating an agency relationship

1 Agreement� Formal: deed� Informal: written/spoken� Implied: relationship of parties

2 Estoppel� Principal allows third party to believe the relationship exists� Agent has apparent or ostensible authority

3 Necessity� Emergencies only� Action taken by one party to safeguard goods for benefit of owner

4 RatificationThe relationship is created after the event


Chapter 20

Justification for dismissal: ERA 1996 s 98

Proof by the employer that the employee was dismissed for anyof the following reasons may indicate that the dismissal was fair:

1 Lack of qualification or capability

2 Misconduct

3 Redundancy

4 Illegality

5 Some other substantial reason


Chapter 21

Differences between partnerships and companies


Partnership Company

Formation Agreement of partners: Registration under thedeed usual Companies Act 1985

Numbers 2-20 Single person companypossible.No maximum.

Legal Not a legal person A legal person oncepersonality incorporated

Members' Unlimited May be limited:liability shares/guarantee

External None Companies Registrysupervision

Termination Agreement, death, Statutory winding-upmental disability or proceduresbankruptcy of partner.


Fig 26.1

Classification of different types of intellectual property

Statutoryintellectual property

rights

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Fig

26.

2

Notes


Lecturers guide

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Transcript of Lecturers guide