Any inappropriate action, which is being carried by any member or any action taken by a member against the LLP is further referred to as a breach of contract. In case if this happens, the damage caused to the LLP must be paid by the member (offender). In addition, the rights and position of the member in the LLP held by the member (offender) can be withdrawn.
Parties of the Two Contracts framed in the Trade Fair
The parties associated with the two contracts at a trade fair are Mary Mowlar, Kerry Kaynine, Eric Seathrew, and Barry Bench. In this context, these four parties have agreed on a trade fair business. The oral agreement is a contract made between the two business parties orally and not in written form. This agreement as per the UK law is considered to be legal. However, it is observed that oral contract encompasses written agreements. Agreed terms and conditions made through the oral process are stated under the contract terms and conditions in a written form.
Attributes of Law
The case scenario portrays the same story but in this case, 123 OK is referred to as the LLP, whereas the members, in this case, are Mary Mowlar, Kerry Kaynine, and Ishtiaq Insiza. Thus, by considering the Company Act, Ishtiaq Insiza is not informed and is unfamiliar with the LLP agreement, which is being set out between Mary Mowlar, and Kerry Kaynine with Eric Seathrew, who is the sole trader. Mowlar and Kaynine purchased the dental x-ray unit at £4,000 on the basis of the agreement set out between these two parties.
Based on the LLP Act, the parties associated with the two contracts of trade fair are responsible for business transactions that are held between the agreed partners. Every action taken by the parties against or on behalf of the trade fair agreement portrays that they are responsible for all the damages and compensation made against/for the company. Hence, focusing on the trade fair agreement between Mary Mowlar, Kerry Kaynine with Eric Seathrew, they are responsible for their actions along with the damages incurred against or in the favor of the agreement between them. Under the second trade fair oral agreement, Mary Mowlar and Barry Bench are also responsible for the action as well as damages incurred against/in favor of the agreement between them.
Liability Incurred by Mary with Barry Bench
According to the LLP Act 2000, it is understood that any oral agreement between the two parties must involve a written application or any sort of evidence. This is for the purpose of making a future business decision in case of any illegal act or damage caused to the other party. A partner has a higher chance of claiming compensation or damage caused to them when they are able to provide evidence such as the written agreement application form of the oral contract. The LLP Act 2000 also states that any fraudulent activity that is being taken by a party after the agreement is highly liable for claiming any sort of damages or compensation. On a similar note, Barry Bench has performed a fraudulent action by charging £10,000 for the dental chair to Mary (another party). In addition, Barry Bench has charged an excessive amount of £5,000 by selling the dental chair, which was easily available at an actual price of £5,000. Thus, Mary is highly liable for receiving compensation of £5,000 from Barry Bench
Forms of William’s Investment
Since William seeks to invest in the new 123 OK Limited Company for a better future of the company and directors, he must invest in a legal form of stock as well as investment funds. With this, an additional working capital can be generated along with the prospective advertising as well as marketing expenses along with expanding its business at the same time. This legal form of investment made by William must adhere to the legislation and norms stated under the Companies Act 2006. Thus, making an investment in the business of 123 OK Ltd can enable the company and William to seek greater returns.
This can also help in building a better future of the business with respect to the expansion. Higher loss due to any sort of business issues in the future can be reduced. This outcome is guaranteed if the investment is made through a legal form of stock and legal form of investment funds by William. In addition, William can also be a single shareholder of the company by investing through a legal form with a total of £200,000 in the company. The best decision for William is to invest in a company’s fixed assets such as land or buildings, as they are meant for a longer duration. This also ensures a continuous growth of the income as well as profits for the company and William.
Income or any sort of profit can only be acquired by William. The growth of 123 OK Ltd indicates the creation of additional working capital as well as expenses to be made for the company’s advertisement and marketing purpose.
Advantages and Disadvantages of Different Forms
Legal Stock Form
The advantage of investing in the company through a legal stock form is that it provides an assurance to the investor for being a stock or shareholder of the company. In addition, it has further been observed that this form of investments favors in long-term as well as short-term growth of the company. Financial goals set by the investors through this form of investment focuses on setting goals such as generating higher values on the basis of the certain time period as well as making savings at the same time. In case, loss the company experiences loss, the investor will only lose the amount, which has been invested by him during the same phase.
The investors with the support of legal stock form can avoid most of the risks that are associated with making an investment in the company. On the other hand, the disadvantage of this form of investment is that the Federal Deposit Insurance Corporation (FDIC) never ensures an investor to receive a greater return from their stocks purchased or invested. Contextually, the past results in the stock market do not hint or give an opinion on the current result of the stock market. Thus, some of the stocks in the market may cost higher but generate a lesser return.
Legal Investment Funds
The benefit associated with legal investment fund is that it incurs the lower cost of funds, especially when there is a single investor. Through this form, an investor can access a vast range of market along with the market securities. In addition, this can further help the investors to make a decision on investment easily. Investments risks are not present in this form of investment. In addition, liquidation of the funds that are open-ended has been observed to be possible on a daily basis. Some of the disadvantages to be faced by the investor include a change in fund prices due to the fluctuation of the investment securities. A return from the mutual fund is not always guaranteed. In some cases, a higher investment may not be allowed to the investor by the funds. Investment on funds is also stated to be an inappropriate solution or option for an investor to choose for attaining a better return.
Liquidity Claim by William
If a liquidation of the company occurs, then the single investor or a single shareholder has certain rights on the basis of the Insolvency Act 1986. This Act states that if a company has a single investor, then he/she has every right to claim the overall invested amount through various actions. Thus, among these actions, selling of assets is often initiated by the investors for the purpose of gaining their invested amount back from the company. On a similar note, William has every right to take an action on his basis, which may be through selling the assets of 123 OK Ltd. Selling these assets of the company will favor William in gaining the invested amount of £200,000 from 123 OK Ltd.
Part C
William as a Director
123 OK Company has been identified as a limited company with three recently appointed directors who are Mary, Kerry, and Ishtiaq. In addition, William further holds an equal ordinary share of £25,000 similar to that of the other three directors and has been appointed for taking actions for several areas on the behalf of 123 OK Ltd. He further takes initiatives such as making business decisions, managing business activity, the decision on insurance, finance, personnel, and marketing for the company. Similar to the other three directors, William also performs the duty of the directors as stated above. This further indicates that the rate of risk is also equally faced by William.
In addition, the other three directors may experience a loss through reduction in equal ordinary shares. As the directors have set their main objective of achieving the long-term success of the company, this objective is also shared by the newly appointed performer (William). The major problem in this scenario is that the actual three directors are not present and the decision is never taken under their absence. Understanding the responsibilities and duties assigned by the three directors under their absence in the 123 OK Ltd along with adhering to the Companies Act 2006, the court cannot assign William as a director of 123 OK Ltd.
Focus on the Members’ Voluntary Liquidation (MVL), it is understood that the Court can further liquefy 123 OK Ltd to have three directors of the company is absent and the remaining director (William) is unable to make a decision due to the financial loss of the company. Additionally, William is unable to generate the idea as well as apply any effective financial strategy to cover the losses by paying liabilities on behalf of the 123 OK Ltd.
Level of Care and Skill to Perform Duties
In the UK, the directors of a limited company follow a principle of higher care, diligence, and skills in order to perform various duties of a director. This type of reforms is witnessed in the legal companies and is essential, as a director is the major body of a company, who is responsible for directing and controlling the business operations of the company under each and every area. The manifestation of skill is to be present within a director. Every worker or the higher members of the company needs to serve the director.
This is also stated under the legal business reforms for having a skill through which they can create liability as well as deal with the challenging situation of the company. Directorial accountability along with risk-taking and risk handling ability can be considered to be the major qualities that fall under the requirements of skills within a director. The major aspects to be present within the area of skill and care include diligence or a higher level of commitment under the performance of responsibility and caring quality. The ability to devote themselves to protecting their company and generating higher returns requires higher skills and diligence.
Part D
A limited company changing its name must follow a legal procedure. Thus, under this process, a major criterion involved is identified to be needed for approvals by several authorities. In addition, the director is one of the authority and secretary of the state to be the other authority. Seeking approval from these two authorities can further allow a limited company to change its name. In case if approval is acquired from the directors, then it is not legally bound to change the company’s name.
Similarly, the four directors, who are Mary, Kerry, Ishtiaq, and William have approved for changing the name of 123 OK Ltd but for making the company’s new name Port Talbot Pearlies Ltd legal. Thus, an approval from the Secretary of State is essential. This is mainly due to the fact that new legislation, where the limited companies are prohibited from keeping its sensitive names. This sensitiveness often affects the company and public as well. Thus, the legally proposed name is preferred under the legislation followed by the limited company in the UK.
Through this legal approach, 123 OK Ltd can further be legally approved for being named as ‘Port Talbot Pearlies Ltd’ encompassing 4 directors. In terms of meeting the board of directors of Port Talbot Pearlies Ltd, a resolution of assuming a mutual goal, following a legal approach in each area in the company along with developing several regulations and norms of the Port Talbot Pearlies Ltd must be initiated. Adhering to the Companies Act 2000 in every business operations of the company must also fall within the initial resolution. Besides these, a decision relating to investing and issuing of new shares must also be discussed during the meeting held in the company. The new dividend shares, as well as votes on being entitled, must also be initiated on a daily basis.
Memorandum
The case is of breach of contract, as one of the parties, Always Insurance Limited (AIL) has breached the contract by not helping its policyholder Mr. Emmanuel after the incident fire breakout, which damaged the property in the premise.
Major Parties Involved in the Case
The major parties involved in the case are Mr. Emmanuel Ajala, who operates a gastro house pub named, ‘The Water Pilot’ and Always Insurance Limited (AIL), which offers insurance to the gastro public houses. In this context, Mr. Emmanuel Ajala in 1st December 2017 insured the public house for 12 months period. On 7th January 2018, the public house was completely damaged with the fire, as a result of which the public-house was closed for five months until May 2018. Therefore, in the first instance, Mr. Emmanuel on the basis of insurance wanted to claim AIL for certain amounts. The amounts were calculated on the basis of the business earnings, Mr. Emmanuel for the past 2 years. The amounts calculated were £147,163 for material damages and £197,820 for business interruption. This was because both of these sections were covered by the insurance policy offered by the AIL.
The Major Elements of the Case
Mr. Emmanuel also provides the account details of the past two years as evidence for supporting the claim that was made. However, the case scenario is that AIL does not accept the claim and rejects it on 4th June 2018. AIL mentions to Mr. Emmanuel that policy no-1234ABC is unacceptable for the damages as well as expensive for the business interruption. This was mentioned by AIL that after the completion of the investigation, it was found that the fire started from the waste bin of the kitchen, which may be as a result of burning cigarette end when mixed with paper napkins that led to the fire outbreak. Therefore, relying on its investigation results, AIL relied on policy clause 3(b) and 4 and then mentioned that they are not liable to pay Mr. Emmanuel’s claim. Furthermore, AIL also stated that the amount, which was to be claimed were high even if AIL was liable to pay for the damages and the business interruption.
On the contrary, Mr. Emmanuel states that in the evening of 6th January 2018, he was in the pub until its closure at 00.45. He further stated that the fire may not have been started from the waste bin of the kitchen, as he remembers that he himself had emptied the dustbin prior to closing the pub. In addition, he also made sure that none of the staff puts anything on the emptied bin rather take all the wastes such as napkins in the bag and the collection of garbage is kept on the roadside so that local council can further collect it at night. He further asserted that he was in the pub on that evening with the chef Mr. Roberto Caldera and two other staff Wendy Rivera and Ben Carlucci. Moreover, he states that all the staffs do smoke but the rules have been made to smoke outside. Subsequently, the patio smoking area for customers is also arranged in the pub.
List of Evidence and Documents Date Wise
Mr. Emmanuel Ajala bought the insurance from AIL to ensure his premise of ‘The Water Pilot’. The document of insurance policy number 1234ABC is the evidence for the claim.
Mr. Emmanuel Ajala mentions in a diary that Ben Carlucci, his staff received a telephone call on 11th January 2018 from one of a bloke named Carlos, who worked in another restaurant. Carlos told Ben that when he passed by ‘The Water Pilot’ on 7th January 2018 around 1 am, he witnessed few teenagers letting fireworks in the patio area, which was pub’s smoking zone. Carlos further stated that he saw a lot of smoke but he did not think that it would be such intense but he was aware of the fire only when he read the news today, which was a week later. The phone call was proof.
AIL sent a letter to Ajala stating that the investigation concluded that the cause of the fire was raised in the waste bin of the kitchen. Therefore, on the basis of clause 3(b) and 4, the liability for the claim was rejected.
Mrs. Louise Tan reported that she rejects the conclusion made on the 4th June 2018 by AIL. In this aspect, the rejection was made after speaking to the CFO, viewing photographs and videos of before and after the fire. The conclusion was also rejected after speaking to loss adjustors involved in the case from AIL’s side.
The rejection was made because AIL stated that fire was caused by the dustbin. On the other hand, Mrs. Tan conducted a test where only 4 out of 300 bins catch fire. All four bins were at least half while at ‘The Water Pilot’, before closing the pub, Mr. Emmanuel cleaned the bins half an hour ago and only 6 customers were there at that time. Therefore, she mentions that the risk of fire was less from the dustbin rather it could be because of the stray fireworks.
Robinsons LLP received a written report from Mrs. Tan, which revealed that the result obtained in 27th June 2018 remains the same and also complies with part 35 of Civil Procedure Rules, 1998.
Mr. Emmanuel instructed Robinsons.
List of Documents and its Related Amendments and Additions of Document-F
In document F, point 1 is appropriate as a reference number, a specific date or a brief description has been mentioned.
The point 2 of document F should be amended, as it has a specific date but failed to produce any brief description and reference number. The amendment should be that apart from just the date, the point should also have a brief description of the clauses, coverage, warranties, and insurance policy number. The point 2 can be amended as the claimant’s proof of evidence, the insurance policy number 1234ABC was signed by the claimant on 26 July 2018. This insurance policy provided coverage to ensure varied events such as fire, explosion, storm, earthquake, flood, ground heave, and subsidence. The important points for coverage were for material damage and business interruption.
Likewise, point number 3 of the F document can also be amended. It can give brief about that evidence presented on 27th June 2018 matched with the evidence presented on 7th January 2018. This was a report provided by Mrs. Louis Tan. The letter rejected the conclusion made by the AIL stating that it was not the cause of the fire.
Furthermore, in document F, there is certain information provided by the solicitor, which is to be inspected, amended as well as recommended.
The point 1 in the second paragraph of document F is to be amended, as it has not mentioned date regarding when and which document was to be transferred. In addition, it also did not mention any specific party to receive it. The point 1 should mention respective document with date and reference number.
Following the same paragraph point, 2 is also to be amended, as there is no specific date and reference number. As per list of documents, reference number should be included with a specific date and the document should be listed following the date order.
The next point 3 should be amended because the letter is not addressed with a reference number and a brief description of what the letter mentions.
The point 4 should be amended, as it should have a brief description about the content a well as the prime witness Carlos and Ben, who received the call that provided a new dimension for the case.
After analysing the various aspects of employees job satisfaction, certain factors have been observed, which can be considered to be the major reasons behind the recent behaviour displayed by the employees. As per the information, three employees are not trying to leave the organisation but the other five are facing certain issue in the Aiko Linens (ALs) working sector. Prior to explaining the major problems along with relevant laws and legislation among other ethical factors have been elaborated in order to provide adequate as well as a clear vision of the issue. Based on the Agency Workers Regulations Act 2010, it has been observed that an organisation must maintain certain conditions for creating a strong relationship with the employees.
These include payment structure, the work duration, night work shifts or overtime work, rest period in a day, breaks during the working period, and the annual leave structure. Any organisation in the UK region must incorporate the above-mentioned factors while operating a business. However, each of these factors is well maintained and provided in AL but the working in Pomona (Bedding) Ltd (PB), these aspects may be breached. As PB is a huge organisation, the work environment and the policies are completely different from that of the AL. Hence, each of the above-mentioned aspects of Agency Workers Regulations 2010 may not work. In addition, AL’s employee may not receive adequate value in PB. At the same time, inequality may arise, which will affect the work motivation and skill of the AL’s employees. This is the first reason, which influences AL’s employees to work with PB.
According to Silkin (2003), it has been identified that there are certain factors, which influences the motive of AL’s workers. In this context, the work-life balance of the employee may get affected due to the entrance of PB. At the same time, the stress level of AL’s employees can also increase if PB allocates external tasks. Secondly, the wages or salary volume of the workers will also be affected because there is no contract with PB has formed yet to provide extra money for that work. Finally, the working period is also not defining by the PB as well as AL itself. Hence, these are the major issue which has emerged among the employees.
In this scenario, certain legal factors may be breached, wherein the company may face a significant loss in the business. According to Crown, the National Minimum Wage Regulations 1999, under section 11, an organisation must provide a minimum of £3.60 for their employees. Hence, this minimum wage may change after collaborating with PB. On the other hand, section 12 of the National Minimum Wage Regulations 1999stated that an organisation must establish a proper contract with an individual, while he or she working under an organisation. As the case followed that no legal contract or agreement has been established by AL. Hence, a risk of work with PB has emerged here, which can be considered as the major reason behind the workers’ behaviour.
According to Deakin & Njoya (2017), job security is one of the major aspects, which has to be maintained by an organisation. Hence, the recent AL’s situation has affected the job security of the employees. However, uncertainty has been created, which affects the job motivation of the AL’s workers. As per the UK‘s Employment & Labour law 2018, an organisation must provide job security to the employees. At the same time, an organisation cannot have rights to change employees’ designation without the individual permission. Conversely, the employment process must follow up the legal process under the UK‘s Employment & Labour law 2018.
In here, AL does not ask any employee for the PB’s work, which creates employees dissatisfaction within the organisation. Besides, the company has legal a liability to protect data of employees under the UK‘s Employment & Labour law 2018. In this scenario, it has been observed there is a high chance to leak out the AL’s employee’s data in from PB, which can introduce a huge issue in the future. AL’s business operations may be affected majorly for this kind of phenomenon. These aforesaid legal aspects are unknown to the employees of AL. Hence, the company may face issue due to the above-mentioned legal issues. Based on this observation, it can be requested that the CEO of AL must establish a legal contract before starting a business with PB. However, the higher associates of PB also establish a collaborative approach so that the business can be operated effectively and profitably.
According to the Sale of Goods Act 1979, sec 15 states that the quality and fitness regarding particular goods are not supported in the contract of sale. Furthermore, the warranty about fitness and quality regarding a purpose can be captured in the contract of sale based on the use of the product. Goods cannot be rejected if the qualities are merchantable according to the subsection (2). The related description of the goods is to be given to the purchase. Hence, the main liability includes that Aidan should mention the price, quality, and other information prior to making the sale.
As per the Sale of Goods Act 1979, sec 14 reflects that quality and fitness (i) mentions that the contract made after 18 May 1973, the following are to be included such as warranty and conditions regarding supplied goods under the contract of sale are not covered. This section further state, whenever the manufacturer will sell goods on a business purpose, then they are directly considered to be merchantable quality.
The rejection can be made only on the basis if DCY informs about the quality defect before the making of the contract. Furthermore, the DCY can reject, if the company examines the quality before the contract is made. Under this section, the goods cannot be rejected. The claim for rejecting the contract of sale cannot be valid because according to the section mentioned above, the good in sale contract hold no rights for termination, as it is assumed that the products on the sale for business purpose will be genuine. Therefore, Aidan can claim against the DCY through legal procedure.
With respect to the sell of goods to Dream Catcher Yachts Plc (“DCY”) provided standard terms and conditions of sale (extracts) must be followed. As per the standard, the sale contract can be breached if the seller is injured for any reason. At the same time, seller’s death can also lead to the breach of contract. In here, warranty plays a major role because the seller will not be liable if the contract is breached due to injury or death. Buyer cannot claim anything regarding this situation. As the information related to the warranty will mention in the contract. According to the Contract Act, 1872, a breach of contract can affect an individual to a large extent.
Hence, the suffering party can sue against the other party, who is responsible for violating the contract. However, Explanation in a contract plays a major role as per the Contract Act, 1872. Each party must explain potential information in the contract. Provided information must be accepted by both the parties. In this scenario, the standard terms and conditions of sale (extracts) state that the contract can be terminated, if the buyer has resold the products without the permission of the seller prior to making payment. Hence, AL can claim against DCY breach of contract, as they mentioned everything in the contract.
Pomona (Bedding) Ltd (PB) requested to include no warranty details within the agreement. Fundamentally, the warranty has been used for the purpose of establishing trust as well as product security. According to the OGL, Consumer Rights Act, 2015 states that an organisation has to provide protection to their customers. Not providing adequate security or warranty to a product is a legal offence. Hence, it can be asserted that not providing warranty in the products can emerge legal issue within the transactions of beddings along with cotton.
With the process of business agreement, trust and reliability have been formed between the two parties. Hence, in this context, two parties must consider the required information relating to an agreement. With respect to the product selling as well as purchasing, one party has adopted an object in terms of money. However, the product adopter has some reason to receive product from the other party, a business can be considered to be the main reason behind it. Hence, the product dispute can affect the purchaser in an effective manner. Misinforming warranty details can create a situation, wherein both the parties can face loss and mistrust within the business. In the case of PB, this above-mentioned scenario may occur in the future. For this reason, Aidan and Niko must focus on warranty details so that the business can be established in a legal as well as reliable manner.
Not providing a warranty can lead to facing certain issues such as customers may receive faulty products, as well as sold products, may not fulfill the requirements of the customer. For these reasons, a bad impression of an organisation can emerge, which affect the entire business. On the other hand, as per the section 19(9), the Consumer Rights Act 2015, it has further been identified that a customer cannot claim product disputes if he or she was not received any warranty relating to the product.
Conversely, if a customer has a warranty, then he or she can claim against the product. Thus, based on section 19(11) of the Consumer Rights Act, a truthful breach of contract can be created by providing an adequate contract. Based on the above-made discussion, it can be stated that not providing a warranty to the customers is not illegal, but it affects the trust of the agreement. At the same time, a mutual and legal breach of contract can be made possible for the purpose of conducting through this act. Not following this act can emerge business issue for both sellers along with the purchaser.
Therefore, it can be claimed that Aidan and Niko should consider the warranty process and has to include warranty details within the agreement. This is mainly due to the fact that it will develop business reliability. At the same time, the customer will not able to breach the construct for any reason. The legal arbitration must follow whether a breach of contract will emerge, wherein the Aidan and Niko along with his company will receive security relating to the customer mistrusts as well as the organisational loss in future. This is the reason behind the warranty considerations within the agreement.
In addition, the warranty has more benefits apart from the above-mentioned factors. This includes buy back security, product replacement, and trust development. With respect to the buyback security, the customer cannot receive the product due to dissatisfaction. In this case, both the parties may not breach the contract and the seller may provide good quality products as per the consumer requirement. On the other hand, the product replacement process can help the seller to interact with the customer as well as replace the product based on the consumer requirement. One of the most essential benefits is that helps in gaining the trust of the customers, wherein the organisation can increase its sales in the future. Based on the above-made discussion, it has been observed that warranty plays a major role in any selling agreement.
Thus, not mentioning warranty details can lead to conflicts between two parties, in case product dispute is found. As per the case scenario, it has been observed that dealing with PB is a major opportunity for AL to gain large volume of profitability. Hence, Aidan and Niko should not take any risk regarding the contract. This is because one wrong step can affect the financial background of the company. Though AL is not manufacturing disputed products for the customers but natural catastrophe or disaster can affect the product quality at the time of product shipment. Hence, Aidan and Niko must include a warranty in the agreement so that the PB can trust the products of AL and develop a reliable business structure in the future.
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