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NM11 Business And Law

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Task 1

You have recently joined a law firm as trainee consultant and you manager asked you to prepare a “Law Handbook” which will help the new start-up companies to help on the legal system and about the key legislations that they are required to know for effectively running their business. This handbook must contain all salient legislation which a businessman must know and their impact due to non-fulfilment.  

a. Starting with an explanation of legal system of UK, include different sources of laws that organisations specially the start-up organisations must comply with. You also need to discuss each of them with its scope and impact on the businesses. 
b. Government has a vital role in the legal system of any country, you need to highlight the role of UK Government in law making and explain in detail with its salient points. Further, elaborate how statutory and common law is applied in the justice courts. 

You need to evaluate the effectiveness of the legal system in terms of recent reforms and developments. Give specific examples. 

c. You need to explain key legislation on employment and contract law with some specific examples and illustrate how these laws have potential impact upon businesses. Further, discuss their impact on the businesses with some relevant examples. 

Task 2 

You have submitted your task 1 and you manager is very happy with your effort. Now, he assigned you to advise to your clients who are local running businesses in your area.  You have been given three case studies to review which represent various legal problems affecting local businesses.  The areas of law to be considered contain company Law (including insolvency and liquidation); contract Law (including termination of contract) and employment Law (including Alternative Dispute Resolution). For each case presented you need to apply and justify a legal solution to the problem.

Case 1:

Gordon works as a salesman in the Orange Computers Ltd store.  His contract of employment provides for an annual salary of £10,000 and commission payments (at 9%) on any computers and peripherals he sells.  In the last three years the commission payments have amounted to an average of £11,000 per annum.

In 2015, due to cut throat competition in the local market, the business is adversely affected.  The manager, Fred, informs Gordon that the business is in severe financial trouble and that he must reduce the firm’s outgoings.  In response, Fred asks Gordon if he will forgo his salary for 2015, 2016 and 2017, and simply accept payments of commission.  Fred explained to Gordon that this was required of him (and all other staff) or the business would probably not survive and it would have to be wound up owing substantial debts to creditors.  As such, Gordon accepted the variation of the contract.

In 2016, the economy began to grow, and in small part due to governmental incentives for investment in information technology, the store has managed to trade its way through the difficult times and is making a healthy profit.  As such, Gordon feels that he should be able to receive his wages for 2017 and not simply have to rely on his commission as agreed in 2015.  He also wishes to know if he can claim for his wages from 2015 and 2016 as Orange Computers Ltd has sufficient profits to repay this money.

Advise Gordon whether he can obtain his wages for 2017, and also whether he would have any claim for the wages he agreed not to accept in the year 2015 and 2016.  Discuss in context of employment Law (including Alternative Dispute Resolution

Case 2:

After doing some research on the internet, Janet decided to call Virgin Media to arrange the purchase and installation of the internet package costing £35.00 per month, including the phone lines (monthly line rental of £11.00). The engineer came on the arranged date at 9am and installed the internet. However, he could not find the telephone point on the switchboard and suggested that he will call his supervisor and come back. Janet waited until 5pm that day for the engineer but he never returned back to complete the task. She called the Virgin Media and complained about the engineer and that she still hasn’t got the phone line yet. Finally, after several calls and e-mails they sent another engineer to fix the phone line after 3 weeks.

When the invoice from the Virgin Media arrived Janet was charged for the whole package from the day the internet was installed including the monthly phone line rental. Janet is extremely upset since she believed that her phone line should be charged after 3 weeks only.

Analyse the legal position of the service provider (Virgin Media) and the consumer (Janet) on the basis of your understanding on the various elements of contract law.

Case 3:

Blackhorse Limited is a security company providing security guards to other businesses, which is one of your client. The company has 50 employees. The company has minimal overheads, apart from the "wage cost" of the employees.

 The company had four main customers, the largest of which failed leaving Blackhorse limited with a bad debt of £100,000. Since that bad debt was incurred three months ago the company has recovered its previous level of turnover, but that turnover is now spread over ten customers.

 The cash flow reduction of £100,000 caused by the bad debt resulted in Blackhorse limited "stretching the due dates" of the payments needed to be made to the company's creditors. One of those creditors issued a winding up petition two weeks ago and the court is to consider whether or not to make a winding up order at a hearing set to take place in three weeks’ time. Discuss the different options available to your client to avoid compulsory winding up.

a.  Suggest an appropriate legal solution to each of the problems. 

b. Provide justification for the advice and solution given. 

Give an assessment of the positive and negative impact of the solution, you are suggesting to the business. 

c. Recommend legal solutions based on a different country’s legal system and/or an alternative legal framework. 

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