The Importance of Legal Agreements in Business Environments
Discuss about the Business and Corporation Law for Issues.
The business and corporation law is critical because it determines the positions of various parties to a contract. In any business environment, it is necessary to develop legal agreements where the court can determine the remedies when an individual violates the laws. A contract is an agreement between different parties and before they provide their assent they must understand the details so as to avoid any incidences of ignorance because it has no defense (Turner 2007). In this regard, businesses and owners of various companies must enter into strategic alliances with their employees in accordance with the law to avoid disputes that can lead to legal action. The essay discusses the concepts of business and corporation law in details.
ILAC is a model used to analyze the cases provided. The model is an acronym for issues, law, application and conclusion. It helps to analyze the case provided effectively thus it provides answers to the research question effectively. In this case, one can identify some issues. For any contract to be valid, the important elements of the contract must be taken into account. Firstly, there are various types of contracts people enter (Peel and Treitel 2010). In this case, Tina appoints Brad to stand in for her while she is sick. She gave him the authority to make orders for the petrol and make sure the business operate as usual focusing on meeting the needs of the customers. One can identify one issue from this situation. Tina did not provide adequate details of the appointment but just appointed him to run the business operations while she is away and sick.
Also, Tina did not provide instructions to Brad to buy petrol from BP. On the other hand, Brad wanted to do what is best for the business by negotiating with various suppliers and choose the best supplier as this contributes to improved business operations. Therefore, Brad was right to exercise his skills as an appointee with the aim of increasing the profitability of the business. In the process, he ordered petrol from Caltex. However, when Tina returns to the business, she stops Brad from buying the petrol from Caltex (O'Sullivan and Hilliard 2012). On the same note, Brad did not stop buying the petrol from Caltex, and when they delivered the order, it was not possible to return because Tina had no legal background to do so because she was not a party to the negotiations. Therefore, there is confusion between Tina and Brad because they did not expressly discuss the terms and conditions of the appointment.
According to the Fair Work Act 2009 and Fair Work Regulations 2009, when the employer is appointing an employee, they must develop clear roles and responsibilities the employee should perform so as to avoid confusion. In any form of legal or professional relationship, there must be distinct roles between the employer and the employees so that they can avoid the confusion and promote better working conditions (Kennedy 2008). The factors to take into account during employment include flexible working conditions and minimum working entitlements. In the process, the employer and the employee engage in a relationship that avoids discrimination.
Analyzing Legal Cases Using the ILAC Model
On the same note, the employment act guides the employers when they are appointing their employees. Besides promoting equality during the recruitment, they must draft clear job roles and specifications that show what the employees will do. This is important because the potential employee is aware of the duties they will perform and scope of their appointment (Burrows 2013). Finally, the parties did not discuss the employment terms and conditions in the appointment. In this case, the parties entered into an implied contract, and they did not show the terms and conditions. Therefore, the contract made by word of mouth can lead to misinterpretation of concepts leading to disputes between the parties.
In the case provided, the court can apply the law of contract and employment acts to solve the disputes. In the first, the court can decide that the agreement between Tina and Brad was valid because they had made an agreement through word of mouth. However, Tina assumed that Brad would do the functions as she used to do including ordering petrol (Beale et al 2008). It is because Tina did not restrict Brad regarding the sources of petrol meaning that he was at liberty to negotiate various suppliers and choose the best not necessary where Tina sources it from. On the other hand, Brad entered into a legal agreement with Caltex to supply 30,000 liters of petrol. Their agreement was binding between Brad and the company. On the fact that Tina disputed the supply and phoned Caltex to stop the supply, the Court can hold that the claim is not valid because she was not a party to the agreement (Davies 2012). It means that she does not count to the agreement since the agreement to supply the petrol was entered by two parties. It implies a third party, in this case, is not recognized and the only individual who can stop the supply is Brad but will have to pay for the damages for violating the terms of the contract.
Based on the discussions above, it means that Tina’s appointment is not legally binding because it was just a mere word of mouth. On the other hand, Tina has no legal background to stop the order Brad made with Caltex to supply the petrol because she was not a party to the agreement. Caltex can sue Brad for breaking the terms of the contract (Carr et al. 2009). The remedies will apply including compensation for the damages. The most important thing to learn is that the parties to the contract must enter into a valid contract so that when one individual violates the terms, they will pay for the damages and the court will decide the remedies. The types of contracts an individual enters include express and implied contracts.
One can raise some issues from the case study. The partners agreed that they should have a partnership and pursue their careers instead of getting employed. They decided to venture into a partnership because they had skills and resources to start their business and be their businesses. It is important to note that the individuals entered into agreements that focus on how they will manage the business. The first and most significant agreement the parties entered into is that the partners have equal rights and they can enter into contract on behalf of the association. However, any contract that exceeds the agreed amount requires the approval of the other members because any mistake can pose a challenge to the business and can fall. Therefore, the partners must agree on any contract exceeding the maximum amount (Brownsword and Smith 2010). In the same agreement, they failed to state the factors to put in place ensure that the partners act in the best interest of the partnership. For instance, they failed to raise the issue of trust and at most good faith so that the employees can enter into contracts that can improve the performance of the partnership.
Roles and Responsibilities of Employers and Employees in the Recruitment Process
On the other hand, Simon one of the partners acted without getting the approval of the other partners. In the process, the other three members have refused to accept the delivery from the suppliers, and the suppliers have not sued the partnership for failing to honor the agreement. This issue has taken two dimensions (Adams 2012). The first one is that the court can rule the partners to accept the delivery and pay for the products. This is because the partnership agreement stated that the individuals could enter into a contract on behalf of the partners.
On the other hand, the partners can argue that the agreement stated the limits to which an individual can conduct business on behalf of the business beyond which the members must agree and provide their consent (Deakin et al. 2013). However, in this case, provided, the individual entered into partnership assuming that their partnership can enter into freight business which is not the thinking of the business. Therefore, the partners have a right to refuse the delivery because the partner had breached the terms and conditions of the contract.
The partnership Act 1891 guides the members in their business relationship. It states the conditions the partners must meet so that they can register as a partnership association. In the first place, it states how the partners own the property. In some cases, the partners have varied rights to the ownership of the business considering their contributions. Further, it determines the rights and obligations of the partners. For instance, in this case, the partners have equal rights, and they can conduct business and enter into contracts on behalf of the business (Dignam and Lowry 2012). Besides the Partnership Act, the partners can agree to enter into agreements that focus on enhancing the business operations. They can set the limits to which the individuals can enter into contracts on behalf of the business.
It is the responsibility of the partners to follow these guidelines and policies as they are stated in the constitution under the Partnership Act 1891. The duties of the partners are subject to special agreements, and if any partner acts beyond the limits, the individual is considered out of order, and the partnership will not be held responsible when an individual oversteps the limits. However, when the individuals engage in contracts and business on behalf of the partnership, they must be transparent in the profits they make (Duddington 2014). In this way, the business will succeed. Therefore, the partners must follow the policies of the Partnership Act failure to which an individual is termed as out of order and do not represent the business.
The Partnership Act is used in this case to solve the differences arising among the partners. In the case Smith v Anderson (1880) 15 Ch D 247, the court held that all partners have equal rights and the partnership is responsible for the actions of their members who have obligations to do business on behalf of the partnership (Finch 2014). In the case, one member acted outside the agreements, and the partnership was held responsible, and the members of the business sued the individual for the damages. The act shows clear procedures to hold one partner responsible for their acts.
In this effect, the Partnership Act is used to solve the dispute. The partners are held accountable for the actions of the member, but they can also take a legal action against the member for violating the obligations of the partners (Hannigan 2012). It is important to remind the members of their obligations so that they do not overstep their mandate. It is important to promote integrity and trust so that the partners can work in at most good faith to make the partnership a success.
Based on the above arguments, the partnership is held responsible for the actions of the individual. However, they can also take legal actions against the member for breaching the partnership agreement. On the other hand, the partners can argue that the individual was not acting on behalf of the partnership because he violated the terms of the agreement in the partnership act (Furmston and Cheshire 2012). However, it depends on the context in which the individual was performing the duties. The most identifiable point here is that the individual acted outside the partnership agreement.
In conclusion, business and corporation law is the law that shows how individuals should conduct selves when they are doing their business. In any business, the partners must observe the laws so that they do not violate the constitution. For instance, the business people must observe the terms of the contract and enter into valid contracts so that every individual understands obligations and duties.
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