Last updated: July 23, 2019
Topic: BusinessEnergy
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LEGAL AND REGULATORY FRAMEWORKAims of the Research workThe aim of this assignment is to allow students to demonstrate their understanding ofsome of the legal and regulatory issues that affect business organisations.Summary of OutcomesI.

                   Relation of the Sale of Goods Act 1979 and the Consumer Credit Act 1974 to a Workplace SituationThe Consumer Credit Act 1974 is a consumer protection law in the UK. It requires certain businesses to obtain Consumer credit licences and protects individuals receiving credit up to £25,000. The Act furthers that a supplier and creditor share equal liability under a breach of contract given the following circumstances: The relationship between supplier and credit provider determines whether the provisions apply. Responsibility, according to the Office of Fair Trading, is shared if:“(a) the cash price of the item is over £100 but not more than £30,000;(b) the credit agreement is regulated under the terms of the Act ;(c) credit is granted in the course of the provider’s business ; and finally(d) credit is advanced under arrangements between the credit provider and supplier of goods or services. Appeals under the Consumer Credit Act are made to the Office of Fair Trading.”(Government);The Act also seeks to protect both supplier and buyer. It also seeks to specify the limits at which the credit must be executed.

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The Sales of Goods Act 1979, on the other hand, dictates that “It is the duty of the seller to deliver the goods and of a buyer to accept and pay for them in accordance with the terms of the contract. Thus the seller must be ready and willing to give possession of the goods in exchange for the purchase price and the buyer must be ready and willing to pay for the goods. These duties are fundamental and failure by either party to perform them allows the innocent party to cancel the contract and sue for damages. The duties of the parties are further defined by the terms of the contract and terms, which can be implied by law.”(Johns) This simply implies the duty of each party in a sale.

The supplier should be willing, on his part, to deliver the goods; while the buyer must be willing, on his own part, to pay for the good to be purchased.II.                The Formation and Dissolution of a Business UnitWith some exceptions, (such as cooperatives, non-profit organizations and (typically) government institutions), in predominantly capitalist economies, businesses are formed with the objective of earning profits and maximize, increase, and maintain the owner’s wealth.

The company, as a whole, is directed towards the attainment of these goals. In other words, the owners and operators of a business have as one of their main objectives the receipt or generation of a financial return in exchange for their work — that is, the expense of time, energy, and money. On the other hand, the dissolution of a business unit is the act or process of dissolving or termination of the operations of the company. This action seeks to end the overall processes of the company may be due to bankruptcy, lessen projected losses, or a legal or judicial action. In this sense it is frequently used in the phrase dissolution of a partnership.

The dissolution of a contract is its rescission by the parties themselves or by a court that nullifies its binding force and reinstates each party to his or her original position prior to the contract. This simply means that a contract is broken as a decision of both parties, and that they mutually agreed to terminate such obligations. The judicial action of contract termination may arise from the legal action brought about by one of the parties involved in the formation of the contract.Since a corporation is a separate legal entity, the dissolution of a corporation is the termination of its existence as the legal entity formed. This might occur pursuant to a statute, the surrender or expiration of its charter, legal proceedings, or bankruptcy. However, in domestic relations law, the term dissolution refers to the ending of a marriage through divorce. The dissolution of a partnership is the end of the relationship that exists among the partners as a result of any partner discontinuing his or her involvement in the partnership, as distinguished from the winding up of the outstanding obligations of the business.Dissolution of business entities mainly arise from several things: mutual consent, lessen losses, legal action by one of the parties involved, or the decision of a court of law if the case is of criminal or civil nature.

Its termination would be result to the cessation of its existence and would not be permitted to perform its operations until the necessary processes to achieve its revival have been approved by the Law.III.             The Rights of Employees in Particular CircumstancesEmployees have a number of rights defined by the Law. Rights of Workers can be classified as basic and in special circumstances. Overall the rights of employees generally root from the concept of civil rights and should be taken into consideration in every account at work. According to the Adviceguide website:“It is unlawful to discriminate against a person at work because of their: (1)sex;(2)race; (3)disability: (4)colour ; (50nationality; (6)ethnic or national origin; (7)religion or belief ; (8)sexual orientation; and lastly, (9)age.

”(Anonymous 2002a);Discrimination at work may occur in two possible ways: the first is direct, wherein, the employee or worker is less favoured because of one or more reasons out of the nine reasons of discrimination mentioned above.  A good example of direct discrimination is when an African employee is denied promotion because he is Black; that is direct discrimination.Indirect discrimination occurs when a particular worker cannot meet the prescribed requirements and in the end, the employee would find himself/herself in a particular disadvantage. In addition to that the particular reason for the obstruction of accomplishing the requirement is unjustifiable.

(Anonymous 2002a) Example of which is when Asian workers are only accepted as part-time workers and the company only trains workers who are classified as full-time, then the Asian workers are at the disadvantage, indirect discrimination occurs.Harassment is a form of discrimination, although most of the time, harassment occurs when a worker tries to hinder the action of discrimination to take place. Harassment may be in the form of verbal abuse, physical contact or suggestive remarks made to the worker by a co-worker, superior or even, subordinate.

Harassments may be the cause of certain legal actions subjected to superiors in certain companies.IV.              Assessment of the Health and Safety Legislation in an OrganizationOccupational safety and health are the methods undertaken by the company in order to protect the health, welfare and safety of the employees, public and other factors that are affected by certain processes undertaken by the company.

The primary reason of which should be that of the employee’s safety. No worker should come to work, expecting to risk their limbs and life for the possibility that they may endanger their own safety. It is a factor of morals that lead to the formulation of such methods.

Also, the formulation of the Organizational safety is due to factors of economy. The government have realized that the lack of which was the cause for a number of legal actions that have risen due to the lack of the said methods.The European Union member states have realized that the use of the methods have further strengthened the cooperation of workers and employers alike. Authorities have further bolstered their monitoring procedures of the organizational safety so that they may be able to see the companies that practice those methods regularly. Furthermore, they have established such agencies in order for them to see the advantages and disadvantages of which, can be the root of developmental laws that would further strengthen worker-employer relationships.V.

                 The Principles of Contract LawA contract is said to be a promise that the law will enforce.(Anonymous 2006a) This simply means that a contract is a binding obligation for the obligor, or the one who made the promise, to complete and accomplish the promise to the oblige, or the party to which the promise was made to. However, for a contract to be valid, a number of prerequisites should be accomplished: (1) there has to be a consensus on both parties; (2) there must be a desire to create legal relations; and lastly, (3) there must be careful consideration.(Anonymous 2006a) Absence, of any of which, would lead to the nullification of an existing contract. After the accomplishment of the requirements, the contract must now be examined in its whole self. The possibility of the use of force in order for a contract to be accomplished would nullify the contract since it would violate the law of consensus. For consensus to take place there has to be free will in both parties and no outside interference, such as force or threats, that would influence the consenting parties in their execution of the contract.Terms of the contract are specified as :“.

.express or implied; and separate consideration is given below to one particular type of contractual term, namely exclusion clauses. Where a contractual term has been broken, it will, apart from the possible effect of any exclusion clause, probably give rise to a claim for damages for breach of the relevant contract, or of any collateral contract. Prima facie, the promisor will be strictly liable in the law of contract for failure to perform that which he promised to perform, unless his promise is impossible to perform; and this situation may be contrasted with an action in tort in respect of a broken promise, which will depend on the promisor’s state of mind.

Furthermore, the breach may in some cases give the promisee the additional right to rescind the relevant contract. Where the contract is one of consumer supply, there are statutory restrictions on the permissible terms…”(Anonymous 2006a) The terms seek to protect the execution and the obligee. Certain terms must be in order to accomplish the contract without problems and dilemmas that would arise may be prevented. The terms must be expressed or otherwise, implied by the contract. VI.              Consumer Protection LegislationConsumer Protection is one of the methods employed by the government to protect consumers from unlawful acts made by suppliers.

It also seeks to prevent harm or any injustice that may be done to the consumer. It is also responsible for the protection of the last line of a chain in sales redirected from a supplier. It seeks to determine the level of responsibility that a supplier has on their products. As stated in a briefing of Consumer Protection(Anonymous 2006b):“…European Directives covering the supply of goods to the consumer do not limit liability to the last link in the supply chain (e.g.

retailer or wholesaler). All parties concerned are equally responsible – manufacturer, agent, exporter, importer, wholesaler, factor, improver, shop-owner, stallholder. Goods in storage or transit, for example, on warehouse shelves ready for supply, are required to be safe.” As an example, the government may issue a directive requiring business enterprises to provide the government with the necessary information concerning food preparation, materials used, and the level of food safety employed (if the product is food) so that they may be able to determine whether a shortcoming was committed by a certain firm. This way, they would be able to monitor which companies are applying illegal processes in their production. This would also lessen the occurrences of consumer reports of complaints. With this idea, the idea of consumer protection traces its basis on the concept of consumer rights. Consumer Protection covers a wide variety of violations and need of protection, from the concept of fraud and misrepresentation to the volatile concept of unfair business practices and product liabilities.

Employment protection legislation is a form of employment regulation which relates to employers’ freedom to dismiss workers. According to OECD (1994), employers’ freedom to dismiss workers may be restricted in several ways: penalties on unfair dismissals, restrictions on lay-offs for economic reasons, compulsory severance payments, minimum notice periods, written justifications, administrative authorizations, etc. The effect of this legislation is similar to a tax on dismissals, even though the firm may not always be required to pay money before it dismisses an employee. Much attention has been devoted to the analysis of the consequences of EPL in industrial countries. EPL inhibits labor market flexibility by reducing the ability of firms to hire or fire workers. The perception that flexible labor markets promote employment and reduce unemployment is widely accepted. Yet, the theoretical and empirical evidence on the net effects of firing restrictions on employment and unemployment are ambiguous. Nevertheless, it has often been suggested that the elevated severance pay and job security requirements in Europe are in part to blame for the high unemployment levels in this continent (Kugler and Pica, 2004).

ScenarioFor a number of years, Sue Brown worked in a popular hairdressing salon. She became a senior stylist and held a certain degree of managerial responsibility within the salon. She had been thinking of starting up her own business, and a recent change in salon ownership made her determined to make the break from the salon, She started up as a mobile operator, doing a small amount at home, but the bulk of her work involved travelling to clients’ houses. Her reputation soon grew and she became inundated with offers for work. If she were to make further progress she felt that she would need to set up as a proper salon in proper premises. It seemed likely that, once established, she would need to employ other staff. She found the ideal premises for the new Scissors Salon in the form of a recently closed bookshop in the High Street.

The shop needed much refurbishment, but was able to call on tradesmen who were prepared to help her at reasonable cost. Her wholesalers were happy to give her favourable terms for a period of a year, and so obtaining the necessary supplies was not a problem. However, she was asked to agree to pilot new products as and when they were brought out. She was, therefore, able to make the transition from a sole trader to a company owner with relative ease.Implications of the Standard Contract Clauses : Their Effectiveness and Problems with their Interpretation1. Describe the basics principles of a contract between Sue Brown and a potential employee. Identify, and explain, any legal terms that should be included in such a contract.A contract of employment is a contract made by an employer and his employee before the start of employment to define their rights and obligations.

On the side of the employee, the obligation is to work in the specified amount of time and accomplish work satisfactorily to get paid. On the side of the employer, the obligation is to pay the necessary wages and treat the worker as humanly as it is possible. Basically, the terms in a contract of employment is made up of two-terms: the express and the implied terms. The express terms are the terms are supposedly the terms in the contract that you and the management have agreed upon. According to, these may include: amount of wages, including any overtime or bonus pay; hours of work, including overtime hours; holiday pay, including how much time off you are entitled to sick pay; redundancy pay; and how much warning (notice) the employer must give you if you are dismissed.(Anonymous 2002b) On the other hand, the implied terms are those that are not exactly agreed upon by both parties. Again, according to Adviceguide.

com, are those that are governed by (a) the general terms which are implied in most of the contracts of employment; (b) customs and practices; and (c) terms of agreement made by the employer with a trade union.(Anonymous 2002b)Implied general terms are those that are known to be “unwritten rules.” First of which is Trust.

For example, the bad things happening inside the company should not be given as information to the competitor because they may use the information to build destroy the company’s reputation. If it so happened that you gave up that information, you would be guilty of violating the implied rule of Trust.Another one of the implied rules is the duty of the employees and employer to each other’s care. For example, if the company provided you with the necessary tools to work with, then the employees responsibility is to use the tools effectively and maintain the usefulness of the tools, since those are the ones that help the employees accomplish their work properly.

The last implied rule is the one that has been agreed upon by a trade union. The responsibility of the employee by then would be to find out the agreements that have been agreed upon by the unions.i.          Quotations and EstimatesThe price payable by the buyer for goods and services supplied by the seller is that shown on the invoice notwithstanding any quotation or estimate or other sum quoted or estimated by the seller to the buyer at any time.

Any such quotation or estimate whilst being taken in good faith is to be taken as a rough guide price only, exclusive of VAT, and exclusive of the seller’s standard additional charges for delivery and other additional charges. Any extra goods or services ordered by the customer are chargeable to the customer in full. ·                    The implication of this is that the quoted price would have been the basic price of the good or service. The quoted price would not include the additional cost like taxes that would be further shouldered by the buyer. Since the seller is the one that charges the basic price, the buyer would then have to shoulder the taxes that accompany the purchase. The quoted price given before would be only the basis of the number or quantity of the products that would be purchased, having the quoted price as its limit.

However, in a case when the buyer specifies that the quoted price would be the limit of his or her purchase inclusive of the taxes and additional costs that accompanies it, then the seller would have no choice but to oblige, given that the contract would have to be accomplished.ii.                  Terms of paymentPayment of an invoice is due seven days from the date thereof whether or not it has been delivered to the buyer by that time, and the seller shall have the right to charge interest at fifteen per cent above the basic lending rate of its banker as posted by the banker from time to time on an moneys outstanding from the date that payment on the invoice is due. Payment by instalments or retentions is not acceptable to the seller unless agreed in advance of the goods being delivered. ·                    This means that the payment for a purchase in an invoice would have to be in seven (7) days, whether or not the buyer has received the goods purchased. However, if the buyer fails to pay the full amount by the time the payment is due, the seller would then have the right to charge fifteen percent (15%) of the lending rate of the seller’s banker. This basically means that the buyer would have to pay the full amount in one payment in seven (7) days or the amount to be paid would be compounded with interest fifteen percent (15%) higher than the seller’s interest rate. The only way that this would not be consummated would be if there was a agreement between the seller and buyer that would override this stipulation of law.

c)         Under the terms of the initial agreement with the wholesalers, Scissors Salon had to promote certain new products. A new colouring agent had been introduced and the salon was the first in the area to use it. After a number of uses, it was discovered that an allergic reaction seemed to occur with a high proportion of skin types.

Needless to say, the staffs were not prepared to continue use of such a product. The wholesalers insisted that the use of the product was continued until positive proof is available. ·                    In this case, Scissors Salon would have the side of the Law. The Law states that the goods would be of good condition and should be of satisfactory quality. If the Scissors Salon would prove that the allergic reactions on their customers were due to the colouring agent given by the seller, then they have the right to three (3) actions.(Johns) First of which is the Termination of the Contract.

With this, the Salon would be severed of the legal ties that bind them to the wholesalers in performing the obligations stipulated to them by the contract. Second of the actions would be the Damages. These would be the legal actions that would enable the Salon to seek damages in form of payments from the wholesalers that have made them use the products that are unsatisfactory to use.

With this action, they would be able to seek the rule of law that would persuade the wholesalers to pay the necessary damages that their product has caused the Salon. The last action would be the Refusal of the Salon to perform its own obligations. The Salon would have the right, by Law, to cease the actions that would lead to the accomplishment of their part of the contract.2.         The Sale of Goods Act 1979 and the Consumer Credit Act 1974a)         Sue purchased most of her salon equipment from her main wholesaler. Twelve hairdryers were purchased and all found to overheat and burn out after only a few weeks use. The wholesalers were unwilling to exchange the dryers, stating that they were not designed for the heavy-duty salon usage.

Sue contested that they had been purchased on the original advice of the assistant manager. This was disputed. ·                    If the assistant manager of the salon was the one who advised the purchase, then there was no obligation on the part of the wholesaler to exchange the dryers, since Sue did not seek to ask the proper use of the dryers from the wholesalers themselves.

If Sue would have asked questions on the proper usage, or proper tools that would fit the description of Salon-use, then the overheating of the dryers would not have happened. However, if it was the assistant manager of the wholesaler was the one who advised Sue, then the wholesalers would have the obligation to exchange the blow-dryers since it was the wholesalers’ superior that promised that the products would be of good condition and would perform satisfactorily.(Johns) 4.         The Rights of EmployeesThe successful growth of Scissors Salon was rapid. Sue was determined only to employ reliable and experienced staff, but it was not always easy to find them.

Consequently, she was short staffed on occasions. Whilst, in the early stages she could rely on part-time assistants willing to stay on longer during the day, this facility was only short lived. Complaints were made that she was demanding too many hours from some of her staff. Usually, the junior staff objected the most. Matters came to a head when a junior stylist was asked to carry out a perm treatment.

She had not been properly trained for this task and was unwilling to follow Sue’s verbal instructions from a neighbouring chair. The customer complained that she had been kept waiting and left the salon complaining vehemently. It was noted that the same assistant made a habit of leaving work as soon as the salon shut, never staying to complete the necessary clearing up. Indeed, on one occasion when Sue was not in the salon, she left more than half an hour before closing, claiming that she had finished her last client. Sue has decided to dismiss the stylist. Discuss what grounds she has for any possible dismissal, and also list the steps she must take if she wishes to carry this out.

;·                    The assistant clearly violated the contract of employment that they should perform.(Anonymous 2002b) The contract of employment has implied terms that the assistant violated, the term of customs and practices. Furthermore, the assistant also violated the term before accomplishing a contract of employment: that an employee must perform must perform the tasks assigned to them, provided that they may be a hazard to the safety of a worker. In addition to that, the employee should have talked to Sue first since it is one of the implied terms that the employee and employer should look after each other.(Anonymous 2002b) If the assistant was having problems, he/she should have expressed her concerns to Sue in a proper manner. Doing so in violation of the Salon’s rules and regulations would only hold him/her liable for not performing /his/her duties.

These would be enough grounds for termination. However, the termination should only take place only after the assistant (after several reprimands and warnings) wilfully continued his/her misdemeanour. The contract of employment must still be executed until the time of termination by both parties.;All in all, the cases basically boil down to misinterpretation of the contracts involved. However, we should all be aware that ignorance is never an excuse to the law. Like the rights of the workers section, the worker can say that they don’t know their rights, but it would never be a good excuse in the process since he should be well aware of his rights and should not resort to not fulfilling his/her responsibilities because it would lead to the violation of the contract of employment.

Since the employer did not violate anything, the contract is still valid.(Anonymous 2002b)The hair-dryer’s case on the other hand, is not entirely the fault of the manufacturers since the buyer has been advised. The act of not following the advice would be well out of the bounds of the seller’s grasp.(Johns) However, the case of the colouring agent that causes allergic reactions to customers, the manufacturers are liable and this may lead to the termination of the contracts that involved the said materials.(Johns);BIBLIOGRAPHYCanadian Centre for Occupational Health and Safety:, John S.

and Warner, Donald E. Jr. (2006).

Privacy Rights of Employees Using Workplace Computers in California. Los Angeles, California: Privacy Rights Clearinghouse.European Agency for Safety and Health at Work (EU)Health and Safety at Work Act (UK)Health and Safety Executive (UK)International Labour Organisation (United Nations)Kugler, A.D., and G. Pica. (2004).

Effects of Employment Protection and Product Market Regulations on the Italian Labor Market. Center for Economic Policy Research, Discussion paper No.4216.

National Occupational Health and Safety Commission (NOHSC): (Australia)Needham, D Dransfield, R Coles, M Harris, R and Rawlinson, M. (2001).

Business for Higher Awards (2nd ed.). Heinemam, Oxford, GB.Occupational Safety and Health Act (US)Occupational Safety and Health Administration (USA)WorkCover NSW: (NSW, Australia)WorkSafe Victoria: (Victoria, Australia)Anonymous (2006), ‘Basic Rights – at Work’, ;;, accessed November 17.Anonymous (2006), ‘Contracts of employment’, ;;, accessed November 17.Anonymous (2006), ‘Contract Law : Study Guide and Resources’, ;;, accessed November 17.Anonymous (2006), ‘Consumer Protection’, ;;, accessed November 17.Government, UK (2006), ‘Credit agreements – equal liability ‘, ;;, accessed November 17.Johns, Marianne (2006), ‘Sale of Goods to a Consumer’, ;;, accessed November 17.;;