Introduction to Business Law

Get Started. It's Free
or sign up with your email address
Rocket clouds
Introduction to Business Law by Mind Map: Introduction to Business Law

1. Tort Law

1.1. Introduction to Tort Law

1.1.1. - Not entering into a voluntary action, rather just an action which can causes legal implications

1.1.2. Based on idea of someones fault, result of negligent behaviour Need to prove that over 50% probability that person was negligent

1.1.3. Functions of Tort Law: Allow injured to feel justice Deterrent to not do certain things Compensation to the injured Efficiency of society

1.2. 1. Duty of Care

1.2.1. Claimant must show the defendant had a duty of care towards them- strong relationship between them

1.2.2. 3 criteria to make a claim: 1. Damages are reasonably foreseeable Need to be foreseeable to a 'reasonable person'. 2. Sufficient proximity of relationship between the 2 parties the closer the relationship the more likely to find negligence to claim for psychiatric injury needs to be an extremely close relationship, more than if claiming for physical injury.- easier to prove. some defendants free from liability, e.g. local authorities- Police/ Ambulance 3. Must be 'fair, just and reasonable to impose duty of care. Only duty of care through positive actions, so if you don't do anything then there is no liablity

1.3. Breach of Duty of Care

1.3.1. Need to prove that the person with a duty of care feel below the standard care (negligence) Professionals held to standard of profession

1.3.2. Factors which influence the standard of care: 1. Foreseeable of the harm, if a reasonable person would not foresee the harm, there will be no liability. 2. Magnitude of the risk Likelihood of the harm to take place. greater the likelihood, the greater the negliegence Seriousness of consequences. greater the consequences, the higher chance negligence occurred 3. Burden of taking precautions How easy it is to eliminate the risk involved. if high procedures occurred to reduce the risk, the less chance negligence occurred. 4. Utility of defendants conduct 5. Common Practice If evidence shows strong common practice- wont be negligent

1.3.3. Proving Breach of Care Res ipsa loquitur : thing speaks for itself. Duty of care was breached unless can prove otherwise Occurrence must not normally happen without negligence the defendant had control of things which caused the harm the cause of the harm is unknown to harmed

1.4. Causation

1.4.1. Difficult to determine what the real cause of something is.

1.4.2. 'But for' test: would have the harm occurred anyway without the defendants conduct? If would have happened anyway, then there is no causation.

1.4.3. Concurrent Causes: 2 causes independently caused the harm 1. Indeterminate Causes: 2 or more defendants may potentially be at fault but it is impossible to determine which one did it. If both were acting negligently and they could not prove why they did not cause the harm they are both jointly negligent 2. Cumulative Causes: 2 causes combined cause harm, even though each one independently would have still caused harm. Both defendants are liable. 3. Consecutive Causes: one cause follows upon a second cause. Courts need to determine whether the effect of the first one is overridden by the second.

1.4.4. Remoteness of Damage Foresee-ability of kind of damage: one would foresee the damage as a result of negligence. Extent of the damage: defendant will still be liable even if the extent of the damage was not foreseeable. Greater Injury that expected: defendant must take his victim as he finds him. defendant is still liable even if they didn't expect the damage to be as bad.

1.5. Damages

1.5.1. Awarded to try and put the claimant back in the position they were before the breach. Normally impossible, so at least can compensate for the damage.

1.5.2. Types of Damages: General Damage: general compensation, normally financial. Hard to quantify, therefore a sum of money is allocated depending on the severity of the case. Special Damages: specific and as a result of a specific case. the Claimant must be able to prove the amount they are asking for. e.g. providing medical bills Nominal Damages: when claimant is correct but no actual loss is suffered Standard of Emergency: did an act in the case of an emergency held to a different accountability Punitive Damages: purpose is to punish for wrongdoing

1.5.3. Liability: Joint and several liability: more than one defendant responsible for harm. all defendants may be liable for full amount. Liability is limited if: Voluntary assumption of risk:the claimant has agreed to run the risk of defendants negligence. Contributory Negligence: if the claimant is also acting negligently

1.6. Vicarious Liability

1.6.1. An employer may be liable for the actions of an employee. They have more financial resources to pay the claims 1. There must be an employee/ employer realtionship Can be an employer or an independent contractor. Need Test to determine nature of relationship: 2. The employee must have committed a tort 3. The tort must have been committed in the course of employment. If the actions were authorised by employer and done negligently Doing an act to help an employer Each case is different, and really just depends on the court If employee does something, specifically prohibited by employer than employer is not liable

1.7. Economic/ Financial Loss

1.7.1. Consequential economic loss: e.g. profit would have gained if action never occurred- RECOVERABLE

1.7.2. Pure economic loss: e.g. profit gained in future. NOT RECOVERABLE

1.7.3. Actual economic loss: e.g. physical damage as the result of an action- RECOVERABLE

2. Employment Law

2.1. Employment Rights

2.1.1. Contract of Employment: Does not need to be in writing, however the terms of employment need to be in writing. The terms of employment can not be given out later than 2 months of starting employment. The employer and employee need to agree on the terms of employment before employment starts Pay aggrangement Holiday Entitlement Details of work expected: start date etc Notice Periods Name of Employee and Employer etc

2.1.2. Employee Rights Maternity Paid time off for ante-natal care Statutory pay for a fixed period Up to 52 weeks maternity leave Right to return to work in a similar job on the same terms Injuries employer has a duty to provide a safe working environment for employees, therefore compulsory insurance needs to be given for injuries at work. Only liable if it is someones fault, not for genuine mistakes. Duty of Mutual Respect Duty of Faithful service employment relationship is one of trust and confidence, therefore employee owes a duty to faithfully serve employer Duty to obey lawful and reasonable order Duty to use reasonable care and skill Duty to not accept bribes Duty to not reveal any confidential information

2.1.3. Employer Rights Vicarious Liability Needs to be an employee/ employer relationship Needs to be negligent behaviour Within the scope of employment Mutual respect duty to provide work, does not need to if the employee is still being paid duty to pay wages duty of confidentiality Duty to provide references- not legally obligated, however normally given. If a reference is provided it must be fair and just.

2.2. Termination of Employment

2.2.1. Unfair Dismissal Can only claim unfair dismissal if worked consecutively for 2 years Remedies for Unfair Dissmissal 1. Re-installment or Re-engagement 2. Basic Award 3. Compensatory award: Dismissal must fall under one of these categories in order to be unfair Conduct Capability Illegality Redundancy Retirement Other substantial reason Automatic Unfair

2.2.2. Constructive Dismissal Employer breaches the terms of the contract of employment Employee is entitled to resign and claim constructive dismissal.

2.2.3. Wrongful Dismissal Only relates to notice period

2.2.4. Redundancy Job becomes redundant, not the person. Can only receive a redundancy payment f worked 2 years continuously. If handled correctly, then considered a fair reason to dismiss someone If however, someone is dismissed for redundancy and is then replaced then that is considered unfair dismissal. Redundancy Payment Same calculation as basic award If an employer cant pay redundancy payments due to liquidation, then the government will pay them. Employer needs to go through a fair Selection process to see which jobs become redundant If not done fairly, one is entitled to claim for unfair dismissal

2.2.5. Fair Termination: By Notice An employee can resign by giving the appropriate level of notice By Agreement Employer and employee may agree to end employment at the same time, with or without notice. By Frustration If employment becomes impossible.

2.2.6. Summary DIsmissal Dismissed with immediate effect, without given any notice- Bad behaviour

2.3. What is an Employee

2.3.1. Employee: Contract of Service Rights which apply to employees but not independent contractors: Terms implied in the contract employment rihgts protected wages Tax treatment Health and Safety obligations An employer can only be liable for employees not independent contractors

2.3.2. Independent Contractor: Contracted/ paying them for services

2.3.3. Test to differentiate the Difference 1. Control test: degree of control the employer has: Employees are told what to do and how to do it, whereas independent contractors are just told what to do and can decide for themselves how to do it. Integration Test: Has the work they have done been an integral part to the business? Economic Reality Test: An employee if: worker provides work for a wage, agree to be under the control of the payer and terms of contract are consistent with employment

3. Commercial Dispute Resolution

3.1. Basic Court Procedure

3.1.1. 1. Try to see if a settlement can be made

3.1.2. 2. If no statement is achieved, the claim is issued in court by setting out the nature of the case.

3.1.3. 3. Defendant sets out a defence as to why they are not liable to pay

3.1.4. 4. Both sides exchange all relevant information

3.1.5. 5. Statements from witnesses are given- Need to enclose everything the witness is going to say before the trail

3.1.6. 6. Judge hears all the evidence and makes a decision as to who wins. (Most likely going to know who wins before the actual trail as seen all supporting evidence for both sides,

3.1.7. Court Costs If the part who couldn't pay the charges loses, they still can't pay the charges, therefore both parties just lose money going to court. Losing party will need to pay winnings party's legal costs. always around 25% needs to be paid by each party. Even if you win, still costs to go to court. Normal legal costs are round £100,000

3.1.8. Around 90% of cases settle before going to court.

3.1.9. Enforcement If you win at court and defendant still does not pay: Instruct a Sheriff to take the defendants goods to the value of the claim Charging order on property Get employer to deduct from wages If other people owe him money, get them to pay you instead. Make him bankrupt Going to court still risky process, as there is no guarentee that the winner will get paid

3.2. Tribunals

3.2.1. Different tribunal for different areas e.g. Employment tribunals for employment law. Over 70 different tribunals all working on a different type of Law.

3.2.2. Quicker, easier, less expensive and less formal than court

3.3. Arbitration

3.3.1. Dispute is referred to an independent arbitrator who is an exert in the field

3.3.2. Quicker, cheaper an easier than going to court However, you need to pay the artibrator independently

3.3.3. Picks a winner and a loser

3.3.4. If there has been a dispute in another country, it is easier to use an arbitrator to resolve it than going to court as case law is different abroad.

3.3.5. Held in private and therefore confidential . Many business will use this to keep disputes private to not harm there reputation.

3.4. Mediation

3.4.1. Independent person hired to broker a settlement/ persuade them to reach an agreement

3.4.2. Don't pick a winner or a loser Only thing lost is mediators fees

3.4.3. Quick, cheap, easy and confidential

3.4.4. If mediation is unsuccessful can then go to court afterwards

3.4.5. Can be arranged within a matter of days and the mediation itself will never really last more than a day- so very easy process if need a decision to be made quickly.

3.4.6. 7/10 mediations are successful

3.4.7. Med-Arb: if mediation is unsuccessful, they will hire an arbitrator.

4. Intellectual Property Law

4.1. Trademarks

4.1.1. Allows a distinctive mark (logo/slogan) to be used exclusively on there goods and not to be copied by any other business.

4.1.2. If get a registered trademark, then allowed to put a R symbol on product to show that it is a registered trademark product

4.1.3. Registering for Trademark: Refusal of Registration: Does not meet the requirements below illegal trademark If identical to other goods Too similar to other goods Registration process: A request for registration name and address of applicant Statement of goods or service to which the trademark applys Symbol that want trademark on Trademark can be revoked: Symbol has not been used for business purposes within 5 years of registering the trademark The way it has been used has mislead the public.

4.1.4. Trademark Requirements: Graphically represented: must be written down in words or symbols Must be distinctive and not descriptive of the product Only be a descriptive name if it has nothing to do with the product Geographical names can only be used in conjunction with something else

4.1.5. Enforcement Entitlement to stop others using the mark or a confusingly similar mark The court grants an injunction against infringers to stop them using the mark Can only take place in the country where the mark is registered

4.2. Copyright

4.2.1. The right to stop someone else copying your won original intellectual property without permission. Protects the way ideas are expressed rather than the idea itself

4.2.2. No form of registration, is an automatic procedure.

4.2.3. Structure with dealing with copyright issues: 1. Can copyright exist? Copy right exists is almost all written work. Covers things creative and intellectual. Most commonly used music or film industries 2. Does it exist on facts? Work needs to be own and not copies from something else. Needed to have involved some effort. If so then copyright can last a life of the inventor/ author etc- usually 70 years from death 3. Has something been infringed/ Law broken: Depends if the infringer knew of the infringement Must have been copied Depends on quality of what you have copies not the quantity. Even if just copied one line of a text, it is still considered copyright The court tests this by looking at the 2 documents and seeing if the second one could have been produced without looking at the first Very hard to prove

4.2.4. 4. What can be done if Copyright infringements have occurred? Injunction to prevent further copying Damages for loss suffered or a sum equal to the profit made by the infringer

4.3. Patents

4.3.1. Monopoly right over a specific invention or a unique way of doing something Can only get a patent, if the invention has the capabilities of being produced commercially Must involve a new way of doing things, a novel idea. Could be an advancement of an existing idea

4.3.2. Lasts 20 years Can license patent to someone to allow them to use it

4.3.3. Reward to inventor etc, for there work Cant patent a discovery e.g. gravity, you can only patent an invention which uses the principles of gravity

4.3.4. If patents did not exist there would be no incentive for companies to invest in there product

4.3.5. Applied and registered at a Patents office which can be a lengthy and expensive process Hire patent agents to deal with obtaining a patent If going through the patent process can label that 'patent is pending' on products Can take around 2 years

4.3.6. Ownership Owner of the patent will normally be the inventor If employee invent something in the course of there employment then may belong to the employer

4.3.7. Infringement Injuction to stop any further infringement Damages- can be on profits

4.4. Other IP rights

4.4.1. Confidential Information Protects a persons right to keep sensitive/ confidential information secret and to prevent others misusing information for there own benefit. Considerations before considered misuing information Did the information have quality of confidence? Is there an obligation of confidence? Was the use of information unauthorised?

4.4.2. Passing Off Pass off there business as another e.g. fake designers Using a similar name, logo, slogan etc Copy Cat brands

4.5. Licencing Intellectual property rights

4.5.1. In some cases, individuals or business will own IP right but not have the money to exploit them. Can license to a third party in order to commercialise your 'invention'

5. Contract Law

5.1. A contract is a legally binding agreement between 2 or more parties which is enforceable through courts

5.2. How a contract is made:

5.2.1. Offer Contract offer must be communicated to the offeree, either in writing or orally. must ensure both parties know the extent of the rights and regulations Not the same as 'invitation to treat' which is only an invitation to make a offer. Termination of an offer: Rejection: offer is rejected Time lapse: the time limit for the offer has exceed Condition not fulfilled: e.g. goods have been destroyed before offer accepted Counter offer- destroys original offer and new one is made Revocation- offeror can withdraw the offer Death: if the offeror dies then the offer is destroyed

5.2.2. Acceptance An unconditioned acceptance of all the terms of the contract, must be communicated between both parties. Silence is not a from of acceptance Acceptance can be by performing contract Postal Rule: a letter of acceptances is effective as from when it is posted, not when it is received.

5.2.3. Consideration: An agreement between 2 parties is not legally binding unless it is supported by consideration/ benefits laid out for each party. Each party makes a promise to the other, that if they complete the offer, they will in turn get something It must not be a past transaction. Cant't promise to do something that has already happened. Has to be a new benefit. Performance must be legal Needs to be possible: cant make a promise to do an impossible act Needs to be sufficient (have reasonable economic value) but not adequate (same value as other parties consideration) Performance of a existing legal or public duty is not considered consideration Carrying out terms suggested in the contract is not considered consideration Payment of any debt is not consideration

5.2.4. Intention: The courts will only enforce agreements which tend to have a legal effect Social and domestic agreements, tend to not be legally binding in commercial agreements, there is an intention to create legal intentions

5.2.5. Capacity: Adults have the capacity to enter into a contract Minors or those suffering from mental incapacity do not Minors: contracts only enforceable for minors if they are for necessities or for employment Mental incapacity: someone who is mentally ill or under the influence are not in the capacity to accept a contract

5.2.6. Privity: Only the people who are the parties of the contract can take benefit of the contract

5.3. Terms of a Contract:

5.3.1. Whatever makes up the agreements of the contract are known as the terms.

5.3.2. Guidelines of a term: Important aspect of the contract Giving a strong statement is likely to be a term If one party asks the other to double check a statement it is unlikely to be a term If a statement was made long before the contract was concluded then it is unlikely to be a term. The shorter the delay in saying a statement and conclusion of the contract agreement the more likely will be a term

5.3.3. Types of Terms Condition: fundamental to the performance of the contract. If a condition is broken can either: Treat the contract as if it has reached its end Carry on with the contract Sue for damages Warranty: less important, but can still cause loss if breached. if breached can not cancel the contract, can only claim damages Innominate Terms: Somewhere in-between the 2. in deciding what to do if it is breached, court needs to analyse if innocent party has been deprived of the benefits of the contract

5.3.4. Expressed or Implied: Expressed: terms clearly written or oral, both parties agree to terms Implied: Statute: Sales of Goods Act (1979) Court: will assume parties intended something to be a term as it imporves the contract. Customary lows of that specific trade don't need to be explicitly said Parol evidence rule: if all the terms are in writing, you would assume that no oral agreements are considered terms

5.3.5. Exclusion Clauses known as an exemption clause whereby one party tries to limit there liability in case of a breach. Must meet 4 criteria 1. Incorporation 2. Clear and Unambiguous 3. Failure of EC for misrepresentation 4. Statutory Regulation- Unfair Contract Terms Act 1977

5.3.6. Reasons why terms of contract would be void: Duress: Physical Threats Only reason a party enter a contract is that they or there family have been threaten if otherwise. Economic Duress unfairly forced into a contract due to an element of economic threat Normal business pressure is allowed Undue Influence Unfairly influenced by the opposing party if undue influence is shown then innocent party is relieved from obligations and can recover any money lost third parties involved have a responsibility to ensure undue influence does not occur.

5.4. Misrepresentation

5.4.1. An untrue statement which induces the other party to enter the contract. May or may not become a term in a contract said when you have a relationship with someone, so expected to trust what they say. Needs to strong statement which influences them to enter the contract

5.4.2. Different Types of Misrep: 1. Fraudulent: knowing or not caring if the statement is true or not. Is fraudulent statement made then can cancel the contract or claim damages 2. Negligent: Misrep is believed to be true but without reasonable grounds If suffered loss from misrep and you should know the statement is false then can claim damages and cancel the contract. 3. Innocent: believing statement to be true- genuine mistake. Not entitled to cancel the contract, but can claim damages

5.4.3. Misrep must be a FACT

5.4.4. Remedies putting the innocent part back to the position they are in before misrep Person is liable for damages unless they can prove on reasonable grounds that they believed the statement to be true. The right to cancel the contract will be lost if: where a third party has intervened action not taken with reasonable time regardless of misrep, the innocent party has continued with the contract

5.5. Mistake

5.5.1. Types of Mistakes Common Mistake: both parties make the same mistake. The contract will be void, as if it never existed in the first place Mutual Mistake: Both parties have made a mistake, but mistakes are different. The court applies the 'reasonable man' test to see if a reasonable person would still think the contract exists despite the mistake Unilateral Mistake: only one party makes the mistake but the other party knows of the mistake. Contract will be void. e.g. mistaken identity.

5.5.2. This is not my act: signing a document by mistake as you think its states something different. Normally bound to a document if you sign it Only not bound if can show: Document is radically different to what thought He was not careless when signing the contract

5.6. Termination of Contract

5.6.1. Termination by Performance of Contract At the end of performance of the contract it is finished. If every detail is completed, if one section is not completed the contract can't end. Severance: break contract down into mini contracts within one, therefore can still get paid when completed some sections Acceptance of part performance: parties agree to end contract early and to pay for the part completed Substantial performance; contract is virtually completed, pay as it is basically completed finished int he grand scheme of things Prevention performance: where one party prevents the contract being performed then payment for one section may be claimed. Time of performance 'of the essence'- how important is the concept of time to the performance of the contract

5.6.2. Termination by Agreement agreement of two parties to end the contract

5.6.3. Frustration of the contract if performance of the contract becomes impossible, illegal or radically different then parties are excused from performance of the contract If a performer of the contract becomes seriously ill then performance will be frustrated. If contract is frustrated then money that has been paid before hand can be recovered and future payments do not need to be made.

5.6.4. Termination by breach of contract Breach of a condition will entitle the innocent party to cancel the contract Breach of warranty will only give them the opportunity to claim for damages. Types of claims from a breach of contract: Damages: compensate for the loss suffered. restore the innocent party to the position they would have been in if the contract was fulfilled properly. Quantum Meruit: the amount its worth: court decides how much a party should be paid if no price has been agreed. Specific Performance: A court can order a party to perform there end of the contract. Will be granted if damages are not an adequate remedy Injunction: stop someone from doing something, only granted if damages not adequate.