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Commercial Law

Question: CONSUMER LAW ASSIGNMENT 2 TASK 1 Krafty Kitchens Ltd have a showroom in the centre of Barrogate. Its front window is emblazoned with a notice stating \" We sell the cheapest kitchens in Barrogate\" Memoona visits the showroom and sees a kitchen that she likes but she is concerned as to whether it is made of mahogany since she knows that this is in fashion at the moment.

She is shown round by Alison who assures her that the kitchen units are made out of mahogany. On the wall of the showroom there is a notice stating \"Krafty Kitchens Ltd cannot guarantee the accuracy of statements about the composition of kitchen units\"

Memoona buys the units and when she discovers that they are not in fact made of mahogany and that there is another kitchen showroom selling units for a lower price she reports Krafty Kitchens Ltd to Barrogate Trading Standards.

She is also aggrieved because she has been sent a bill for delivery of the kitchen units to her house and she thought that this was included in the price of the units. Write a memo to your head of department,Frank Conway, advising him as to any liability that Krafty Kitchens Ltd may have under the Trade Descriptions Act 1968 and Part III Consumer Protection Act 1987.

TASK 2 Anita, Ben and Carol book a skiing trip to Switzerland with Bon Voyage Holidays. They book a chalet, which is advertised in the brochure as having three bedrooms, central heating and in convenient reach of ski equipment hiring facilities.

They also book a flight with Easyfly but upon checking in at the airport they find that only 2 seats are available on this particular flight and therefore one of their number has to take a later flight. Upon their arrival they discover that the ski hire facility is 30 miles away. To make matters worse the chalet only has two bedrooms and the central heating has broken down. When they complain to Bon Voyage Holidays they are told that all branches had been informed to notify customers of the fact that there had been an error in the brochure and that this grade of chalet slept two rather than three people. Write a memo to Frank Conway advising him of any liability that Bon Voyage Holidays and Easyfly may have under the Trades Descriptions Act 1968.

Answer: Memo To: Frank Conway From: Date: Re: Trade Description Act 1968 and Part III Consumer Protection Act 1987 The Trade Description Act 1968 was created for four main offences, two of these relating to the misdescription of goods and two to the misdescription of services. The Trade Description Act prohibits the use of certain false trade descriptions by a person acting in the course of a trade or bus......(short extract) to download the full answer, please Sign in or Register then make a payment or submit an essay

Question: CASE STUDY 1: You have been newly appointed as a legal advisor in a firm of accountants. Mr. Atkinson, the senior member of the firm has asked for your assistance. He has asked you to write a report for one of his client, Mr. Conway who is uncertain as to some issues regarding the law of agency.

You report should attempt to address the following issues and should be illustrated with relevant examples of case law.

(1a) Explain the relationship between the parties involved in an agency.
(1b) Identify the types of authority an agent may possess.
(1c) The basis and importance of agency of necessity.

CASE STUDY 2: Andrew, Barry and Catherine are going into partnership as designers. However as they are entering into a partnership agreement for the first, there are a number of issues that need clarifying and have thus asked for some guidance. You are a legal assistant and have been approached by your employer to write a letter, illustrated with case law, informing them of their legal position with regards the following queries.

(2a) Changing the type of business carried on by the firm.
(2b) Borrowing money on behalf of the firm without notifying the other partners.
(2c) The position where one of the partners wants to introduce a new partner.
(2d) The extent of liability if one of the partners decides to retire from the firm.
(2e) Dissolving the firm.

Answer: (1a) Agency is the relationship between an agent, his principle and the business that is carried out by an agent. An agent is a person who effects the legal position of another called a principle, in dealing with third parties. Below I give two definitions of the agency relationship. Fridman: \'Law of Agency\' \"Agency is the relationship that exists between two persons, when one called the agent ......(short extract) to download the full answer, please Sign in or Register then make a payment or submit an essay

Question: CASE STUDY: You are employed as company secretary by Bloxo Ltd. a company based in Leeds which manufactures shoes and clothing. The company\\\'s share capital is £1000.00 divided in £10.00 shares, 90 of which are owned by the founder of the company, Barry, and 10 of which by Tariq. Both are directors of the company.

Barry has asked you to advise him on the points set out below. A detailed explanation and application of the relevant legal principles and cases should be provided where appropriate.

(1) The company has a certificate of incorporation dated 1 January 2004. The Registrar of Companies did not, it seems, sign the certificate on that date, but on 28 December 2003. )n 29 December 2003 Barry bought some goods in the name of the company. the bill has still not been paid. Consider the question of liability.

(2) The company has a subsidiary Brian & Co. Ltd. this subsidiary has the same share holders as Bloxo Ltd. Barry is also the sole director of Brian & Co. Ltd. Brian & Co. Ltd. does not carry on any business, but owns the premises from which Bloxo Ltd. operates. The premises were recently compulsory purchased by the local council and Bloxo Ltd. is having to find new premises. Consider the question of whether Bloxo Ltd. may claim compensation for loss of business from the council. (The council are refusing to make a payment as Bloxo Ltd. does not own the premises - a condition for receipt of compensation is that you must own or lease the premises from which you operate).

(3) Advise Barry on any legal principles or rules which he must bear in mind if he were to convert Bloxo Ltd into a public company. (4) Bloxo Ltd. owned £500.00 by a partnership called Todds Ltd. the money is owed in respect of goods supplied to that firm. the firm has 2 partners, Alan and Saima. Advise Barry on the legal status of a partnership in comparison with a Company, and who may be sued for the debt.

Answer: First of all one needed to establish whether Bloxo Ltd. existed on the 1st January 2004 as it is on the certificate of incorporation or the 28th December 2003 when the Registrar of Companies had signed it. If one is to refer to the case of Jubilee Cotton Mills v Lewis it was held that the certificate was conclusive as to the date on which the company was incorporated. A company is deemed to be inc......(short extract) to download the full answer, please Sign in or Register then make a payment or submit an essay

Question: A minority shareholder has no right to relief under s.459 Companies Act 1985 where her only complaint is that her relationship with her fellow shareholders has irretrievably broken down. This absence of relief is neither fair, nor economically desirable. Discuss.

Answer: s. 459 Companies Act 1985 allows a minority shareholder to apply for court-sanctioned relief where her interests as a member of a company have been unfairly prejudiced. Its development has provided an alternative to winding up a company, which is unfair to the petitioner if company assets are minimal . Whilst the court has an unfettered discretion in awarding such order as it thinks fit , it us......(short extract) to download the full answer, please Sign in or Register then make a payment or submit an essay

Question: “The UK case law has failed to provide coherent guidance for dealing with tax avoidance. The House of Lords has admitted that all attempts at clarification have only raised fresh doubts and further appeals…Under the guise of purposive statutory interpretation the courts are making distinctions based not on the wording of the statute in context, but on external, policy considerations. The judicial approach requires a proper framework, which could be provided by layered legislation, including a principle-based GAAR.”

[Judith Freedman, ‘Interpreting Tax Statutes: Tax Avoidance and the Intention of Parliament’ (2007) LQR 53, 90]

Discuss.

Answer: “The avoidance of taxes is the only intellectual pursuit that still carries any reward.” John Maynard Keynes. I. Introduction Avoiding tax liabilities is a common goal shared amongst many taxpayers; and the courts are fully aware of it. Today the UK does not have general anti-avoidance legislation but instead, numerous targeted anti-avoidance legislations. On top of these, the House of ......(short extract) to download the full answer, please Sign in or Register then make a payment or submit an essay

Question: “…The courts can and often do, draw aside the veil. They can, and often do, pull off the mask. They look to see what really lies behind. The legislature has shown the way… the courts should follow suit”.

Assess the accuracy of this claim. 71%

Answer: When a company is incorporated, it is treated as a separate legal entity, distinct from its promoters, directors, members and employees and hence the concept of the corporate veil, separating those entities from the corporate body has arisen. The nature of corporate personality can be analysed by reference to the celebrated case of Salomon v. A. Salomon & Co. Ltd. Indeed it has been said that Sal......(short extract) to download the full answer, please Sign in or Register then make a payment or submit an essay

Question: In what circumstances is the judiciary prepared to relax the doctrine of the separate legal personality of a company? Is the current legal situation satisfactory from a policy point of view, particularly in the light of the group structure of many modern businesses?

Answer: An incorporated company is regarded by the law as a distinct and separate legal entity from its members - a principle established by the case Salomon v Salomon . It follows that the any liabilities held by company are owed only by the company – and not by its members. For this reason Salomon can also be considered “the starting point for each court when considering the question of whether the ......(short extract) to download the full answer, please Sign in or Register then make a payment or submit an essay

Question: Company Law - Question One 68%

‘Since the Salomon decision, the courts have been called upon to apply the principles of separate legal personality in what might be called difficult situations. In some cases, they have upheld the principle and in others, they did not.’

Critically discuss the above statement with particular reference to developments since 1966.

Answer: The recognition of the legal personality of the company is clearly its most important feature in law (Schmitthoff, 1976). This recognition derives from the decision in Salomon v Salomon & Co Ltd[1]. In this leading case, the House of Lords held that, regardless of the extent of a particular shareholders interest in the company, and notwithstanding that such shareholder has sole control of the comp......(short extract) to download the full answer, please Sign in or Register then make a payment or submit an essay

Question: CASE STUDY: Khans Ltd. has ten shareholders, all of whom has an equal shareholding. Two shareholders. A Ian and Tariq are the directors of the company.

(1) What is the legal position if the directors enter into a contract for the purchase of a farm. The company\'s objects cover manufacturing sportswear.

(2) Whether the company\'s Articles of Associations are legally binding on the company. The Articles state that James Smith will be a director of the company for life. He also had a separate contract as managing director. Last month the members voted to include an Article that said that directors appointed for life could be removed by ordinary resolution. The company then told him that he could no longer be managing director. Advise the directors on the legal position regarding an application to court by Mr. Smith.

(3) The company is considering raising more capital. Advise the directors on the respective advantages and disadvantages of ordinary shares, preference shares, redeemable shares and debentures.

(4) The directors have asked for your advice on the legal position of personal representative on the death of a shareholder. Also, does the company have to put them on the register of shareholders?

Answer: (1) (Regarding: Memorandum of association and objects clause.) For a company to be incorporated it needs a memorandum of association s.1 and 2 of The Company Act 1985 and since 1856 successive Companies Acts have required that in the memorandum it should contain the objects clause. The objects states the purpose for which the company was incorporated and the activity outside this statement of obje......(short extract) to download the full answer, please Sign in or Register then make a payment or submit an essay

Question: The issue of whether “shareholder value” or “the stakeholder perspective” should shape UK company law for the 21st century has now been successfully resolved”. Discuss with reference to the provisions of the Companies Act 2006.

Answer: Shareholder value has traditionally been “assumed to be the ruling conception in Anglo-American corporate governance” . This perspective is broadly concerned with regarding “the corporation as a legal instrument for shareholders to maximize their own interests – investment returns.” The stakeholder approach on the other hand forwards the view “that a range of corporate constituencies ......(short extract) to download the full answer, please Sign in or Register then make a payment or submit an essay

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Commercial Law

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