Scots Law: Advising Ikat on Problem - Essay Example

? Motivational Methods Paper Task: Scots Law Advising Ikant on Problem A In this problem, it is essential to examine the various underlying aspects. The company should, first, analyze the relationship of the agent with the company. Thereafter, it should put into focus; how much power does Ikant or its managers possess over Fergus. It is crucial that they observe whether Fergus acted in the interests of the company. Lastly, the managers must evaluate whether the company, Ikant, would be held responsible for the mistakes (Douglas 2006, p.36). The company would be held liable for payments, when we look at various contexts. When the company delegated a duty to Fergus, which was an expansion program, it did not examine that Fergus would have undergone various challenges. In addition, the company did not consider the potential benefits that would have come out of each customer. According to the tenements act 2004, the company should always have the capacity to cater for relevant costs (Scotland 2004, p.9). These are costs that result out of reasonable transactions or dealings between the company and a second party. This is irrespective of whether the costs were catered for in the initial budget. The first argument is that, as a sales person, Fergus might have been marketing Ikant. This exists in the view that the company bears social responsibility over his customers and the general society. Marketing and advertisement are factors that have been proven to impact immensely over a company’s revenues and expansion. This, thus, makes the extra costs that Fergus incurred probable in the company’s rational planning. Another reason for the extra costs might have been a possible unwillingness by customers to engage in a meaningful interaction with Fergus. This would have necessitated that he uses the meals as a basis for the interaction. In concluding this, if the company incurred expenses, in the period stipulated, then it is bound to pay for the costs. In addition, the company would be held liable for payment if the court regards the nature of relationship between the company and Fergus. Fergus is a supervisor in Ikant and has been appointed temporarily to aid the company in enlarging its business. In this capacity, he performs the functions on behalf of the directors. This is called the law of agency. He is engaged in an employment bond with the company. He is, thus, said to have acted in good intentions for the company. Even, if he had wrong intentions, it would be difficult to prove that he had wrong intent. Furthermore, the work given by the company to Fergus does not amount to delegation. It is appropriately described as an assignment. The directors did not, therefore, describe Fergus’s role aptly. According to the quantum meruit rule, the company is entitled to pay on the basis that the restaurant has already performed its role (Scottish law commission 2000). Advising Ikant on problem B In our second problem, a complexity arises between the directors and Fergus concerning the Scottish contract law. It is noted that Fergus normally travels to promote Ikant’s products and receive orders. The court can, therefore, easily establish that Fergus has been consistently undertaking this duty for some time. Fergus, consequently, engages the company in a form of contract. Fergus, in this capacity, is deemed able to represent the company in a valid contract. According to the Contract Act of third Parties of 1999, this is recognizable legally (Ashton 2003, p.29). The company law recognizes that companies should still have physical representation despite the arbitrary nature of the board of directors. If the court establishes that Fergus acted in good faith, then the company is bound to the contract. However, according the delegation rule, the directors shall still be responsible for a breach of contract since Fergus is conducting a role that they ought to perform. In addition, company will gain rescission, if only it was stated in the contract. The contract, in this case, must comply with the conditions of Writing Act of 1995 (Macqueen & Thompson 2011, p.8). Since the contract might have been binding, Fergus might have ignored cancellation of the contract on the grounds of image of the company. The image, in this case, does not amount to validity in court since it does not express an explicable harm. Fergus shall only be liable if he gave wrong facts to the other company. In this case, Save-By must have been offended. The contract shall, therefore, only end if both of the parties are aggrieved. Fergus had received the order, perhaps, on the grounds of its magnitude, which might have translated into reasonable profits for his company. This rule out the argument, that he would have received false information from Save-By. According to the principle of duty of care, Ikant should have foreseen that Fergus would have entered into such contracts. It is not indicated that they had earlier warned him not to engage in contracts that did not befit the company’s image. The company is deemed negligent in assigning Fergus a role that is unsuitable for him. When Save-By gave an order subject to supply of products by Ikant, they intended to sell these goods for revenue to their company. If Ikant repudiates this contract, it will be liable for payment of material damages expected by the other company out of this contact. The company can, however, make a counter to this argument by reciting incident of unlawful acceptance. A situation of no consensus, therefore, arises because the contract is inadequate in meeting the required capacity of one party. This, thus, validates a situation of no contract where Ikant is not held accountable. Limited Liability Partnership (LLP) The partnership Act of 2000, which came in operation sixth of April 2001, aided the formation of LLP (Brough 2005, p.13). The formation was meant to make the company adaptable to different dealings. This is in the view that partnership companies were more restricted in their operations. Additionally, the establishment eased on the tax constraints that partnership companies normally face. LLP, thus, resemble limited public companies in notable ways. This type of company mainly recognizes the owner of a company as a separate entity from the company itself. This means that the Act restricts the owner from direct control of the company. The owner is only allowed to interfere where the law permits (David 2001, p.112). As a legal body, the company is permitted to undertake contracts and bindings just as an individual would do. This allows the company to engage in contracts concerning business arrangements such as those regarding orders and supply. In a valid contract, the company is bound to perform duties as indicated in a legal proof. In addition, the company is entitled to breach of contract if judicial or non-judicial conflicts exist. However, an individual acting in legal representation of the company might be liable for damage if one acted in contravention to the company’s law or the Scotland Company’s law. The members shall be held immune to the costs if the court proves his mistake. The members, therefore, can act in the company’s place in several undertakings, so long as the company grants the member authority to handle business. If he is unauthorized by the company, the member will commit to the responsibility. The person dealing with the member must also be aware of this fact. Another fundamental legal attribute regards membership. In a LLP, there is no condition of maximum membership. Conversely, the least membership number should be two. In relation to this, any person can become a member to the partnership regardless of his sex, gender or race. If a member wishes to leave the partnership, then he/she can inform the other members and the same should be subject to agreement (Payne 2006, p.144). However, other members cannot get rid of a member unless the same is created out of an agreement between all members. As noted earlier, a partner can represent the partnership in a relevant business transaction (Willey 2008, p.112). However, the proceeds of the business should be remitted to the company. Lastly, if a member quits the corporation, it continues in its operations. One of the major features of a LLP is that it offers limited responsibility to its partners. This refers to the immunity from debts incurred by the company. In case, a company is wound up, each member’s initial capital shall not be deducted due to the debts. In relation to this, a company’s shall be subject to scrutiny by its members. The results shall also be made open to the members who can relay the same information to fellow members. Dissimilarities: LLP and Partnerships The principal difference between LLP and partnerships of partnership Act of 1890 lies in their identities. Whereas LLPs are recognized as legal units, partnerships action as a legal unit is limited in Scotland. They, therefore, cannot engage in bindings such as contracts. Partnerships cannot act on their cases in courts. When offended, they cannot sue the partners who have wronged them. It should be noted that, in partnerships, there are partners, while in LLPs, there are members. In addition, LLP members are protected from a company’s debts while partners in a partnership are subject to a company’s creditors. When a company becomes insolvent, the company’s debts are deducted from the partners’ accounts (Sealy & Milman 2011, p.296). References Macqueen, H & Thompson, J 2003, Contract Law in Scotland, Tottel publishing, Edinburgh. Ashton, C 2003, Fundamentals of Scots law, Thompson Green publisher, Edinburgh. Payne, L 2006, Studies in Scottish Business History, Routledge, Oxon. Scottish Law commission 2000, Discussion paper on remedies for breach of contract, Scottish law commission, Edinburgh. Douglas, S 2006, an insight into Scots contract law and other obligations, Lulu.com, Edinburgh. Scotland 2004, Tenements Act 2004; explanatory notes by Scotland, The stationery office, Edinburgh. Willey, J 2008, Mac Roberts on Scottish building contracts, Blackwell publishing, Malden, Oxford. David, P 2001, Scottish law and practice quarterly, T & T Clark, Edinburgh. Brough, G 2005, Private limited liability companies: formation and management, Sweet and Maxwell, London. Milman, D, & Sealy, L 2011, Annotated guide to the insolvency legislation, Sweet and Maxwell, London. Read More