Analysis and Application of Business Law - Case Study Example

 Case Study- Task No. 1 Introduction: M/s Toys4U Ltd, a medium sized toy retailer in London run by three directors namely Don, Edwardo and Francesca, telephonically confirmed for purchase of ten toys ‘Polaris missiles’ from M/s Megastores on 1st March, 2010. Two days later, Toys4U received only eight toys, while two were damaged during supplying and one more in transit. On 7th March, Mrs. Sharma purchased a toy from Toys4U for her son Pritam. On very next day, Pritam tried to play with the toy missile, but it crashed with the glass ceiling lamp causing injury to Pritam’s head. Instantly, the Toys4U returned remaining toys to Megastores communicating that Megastore will be responsible for any claims brought by Mrs. Sharma for injury of her son. M/s Toys4U wants possible advice for any legal implications for the company caused by claims of Mrs. Sharma. Issues: Following issues have been framed from given facts: 1- Whether M/s Megastores is responsible for any claims by Mrs. Sharma or not? 2- Whether M/s Toys4u have any responsibility towards such an incident or not? 3- Rights of Mrs. Sharma in this case. The issues are liable to be discussed in light of provisions of Sales of Goods Act, 1979 and Consumer Protection Act 1987. Implied Warranties and Guarantees: In business transactions there are certain terms and conditions which are eithor clearly mentioned at the time of making the contract or these might be implied be the law. When these conditions are express and are not otherwise contradictory to the legal provisions enacted in the country, these conditions are legal and are liable to be upheld by the court of law. However, these conditions are not express in the contract. Here a question raises that if there is no expressly defined contract between the buyer and the seller, then how a buyer can protect his rights? This gap is filled by some implied conditions in form of implied warranties and guarentees in any sale of goods. These implied terms are important because it is not always possible to enter into a written contract everytime, when thre is a sale. warranty of fitness for a particular purpos is one of these warranties. Sales of Goods Act: As per Section 14 (2) of Sales of Goods Act 19791, (Sales of Goods Act, 1979) the seller sells goods in the course of a business, there is an implied term that the goods supplied under the contract are of satisfactory quality and for the purpose of its usage. Section (2) (b) speaks of the satisfactory quality of goods including their state and condition including its appearance and finishing, safety, freedom from defects and durability etc. However, there is no requirement for satisfactory quality if attention of the buyer is drawn before finalizing of contract or if buyer examines the goods for defects beforehand/prior to making contract. Consumers Protection Act 1987: As per Section 2 of Consumer Protection Act 19872, (Consumer Protection Act, 1987) if damage is caused, wholly or partly, by defect in the product, the producer of the product and the person who imported or supplied the product shall be liable for damage. Similarly, as per judgment in (KG Bominflot Bunkergesellschaft Für Mineralöle mbh & Co KG -v- Petroplus Marketing AG 2009) 3, goods sold must be of satisfactory quality in terms of Sale of Goods Act 1979 not only at the time of delivery but also for a reasonable time afterwards – save the seller proves otherwise . In this case, there is a gap of only five days between arrival of toy at retail shop and injury at home of Mrs. Sharma i.e. March 03, 2010 to March 07, 2010. The Sales of Goods Act 1979 does not provide a specific time within which complaint is made and entertained. The rule applicable is that complaint is to be made as soon as the buyer becomes aware of the fault and within a reasonable time, which in case (Rogers V Parish 1987)4 was six months. Hence, five days is quite reasonable time for a toy. As already stated above, Section 2 of Consumer Protection Act 1987 makes producer and supplier of a product, liable for the damage caused because of defect in product. Though the Polaris missiles were produced/manufactured by Chen Organization in China, yet the toys were distributed and supplied by M/s Megastores, whose manager sold the toys in ‘normal course of business’ and is liable for damage as it has been caused due to defect in the toys. Further, the Section 3 of Consumer Protection Act clarifies the nature of defect in the product, whereby the product is defective if its safety is not such as persons expect. This safety includes risks of death or injury. The Section also extends to purposes/manner in which the product is being sold. In (Godley V Perry 1960) 5, a six year old boy purchased a toy catapult, which broke while playing and caused injury to his eye and the Court stated that it was not required to tell the boy purpose of product. Similar is the nature of case under reference. Analysis and application of law: Analysis of the whole situation light of law narrated above is as under: Has Mrs. Shama a case for damages? An agreement may be in written or verbal form and all agreements, enforceable at law, are deemed as contracts. The transaction between Megastores and Toys4U was a verbal agreement (held telephonically) and apparently took place in ‘normal course of business,’ which implies that the goods purchased are of satisfactory quality at the time of their selling (Stevenson v Roger, 1999)6. However, in the case under reference three toys were already damaged before reaching at Toys4U and the only toy sold, caused an injury proving that toys were defective in manufacturing. In any case of sale, and it is a breach of contract at the part of Megastores. Mrs. Sharma has a legal case on the basis of following grounds: a- Breach of contract is there. b- Actual damages are occurred in case of broken glass and injured person outside the home. c- Mental agony and discomfort. It is very much clear that Mrs. Sharma has a case for damages. Here comes the question as to who is responsible for the breach and responsible to her? Who is responsible for any claims by Mrs. Sharma? Mrs. Sharma purchased toys from the Toys4u. Parties of the contract in this case are Toys4u and Mrs. Sharma. Megastores never entered into a contract with Mrs. Sharm, however, as a supplier, Megastores are responsible to Toys4u for any damage. Rights of Mrs. Sharma in this case: Mrs. Sharma is entitled to damages from toys4u for all the damages incurred due to faulty toy as well as any legal charges to defend any legal suit in relation to the same. Advice It is advised to M/s Toys4U that since deal with M/S Megastores was taken place in normal course of a business due to non satisfactory quality of toys, it is deemed as breach of S.14(2) of the Sales of Goods Act 1979 as well as S.2 of Consumer Protection Act 1987. As such, any claim from Mrs. Sharma can be entertained/sued in the Court of law against M/s Megastores, who will be liable for damages caused due to defect in the toys ‘Polaris missiles’. The suit is sustainable against Toys4u, however, toys4u may bring a case for damages againt Megastores for breach of agreement and all subsiquent losses incurred to the company because of faulty nature of toys. TASK No. II Introduction: Toys4U advertised for a sales assistant on 10th March, 2010 and Amanda applied for post. She was interviewed on 13th March and after interview she was told that she is not successful for the job because she did not contain “right attributes”. The company is seeking advice for possible legal implications for any claim which brought by Amanda in connection with her unsuccessful interview with Toys4You. Issues: Following issue stems out of the situation: 1- Whether Toys4U can have substantial ground for rejection of Amanda specifically because of her attributes? The issue is to be discussed in light of employment laws especially under Sex Discrimination Act 1975. ANALYSIS AND APPLICATION OF LAW: In this context, it is stated that undoubtedly the employer is to determine attributes for a job; however, it is pertinent to state that the M/s Toys4U has neither defined job attributes at the time of advertisement nor during the interview. However, in legal and business parlance, attributes may be defined as qualifications, experience, aptitude, gender, etc. Although, in absence of a clear list of attributes referred in the case, it is not possible to render an absolute advice, however, it appears that Amanda was refused job because of her gender. Can a person be refused a job on basis of gender? It is held that a person cannot be refused a job on basis of gender only. It falls in category of gender discrimination and is prohibited. A company cannot refuse anybody simply on the basis of such an attribute which is otherwise not hindering his or her performance as an employee. If a job can equally be performed by the both genders and there is no qualification as to gender in its execution, the law prohibits any discrimination on this ground. However, gender discrimination is permissible in cases where gender of a person is required as genuine occupational qualification (GOQ), e.g. job requires male or female characteristics and working area involves considerable chances of physical or social contacts of a specific gender etc. (Section 7: Permissible Sex Discrimination). In a case where a woman was denied a job on the plea of her gender, it was held that gender discrimination for giving job is unlawful as motive behind discrimination of a woman is irrelevant. (Grieg v Community Industry) 7 Similarly, in (Brennan v Dewhurst Ltd)8 woman was given relief, where interview subsequent to advertisement revealed that the candidate was refused because of gender. In another case (Saunders v Richmond-Upon-Thames Council) 9 a woman, who was rejected after interview because of her gender, was favoured by the Court. Similar judgments were given in (Batisha v Say) 10 and (Munro v Allied Suppliers). 11 If at all, there was no gender discrimination, judgment in the case of (Steere v Morris Bros) 12 can be referenced, where employer emphatically proved that they had employed women in past and there were some other attributes required for the job, which are missing in Amanda. In absence of any such condition, an employer is at liberty to select his employee as beast suited to him as per his need and requirement of the job. Nobody can challenge this right if there is no discrimination as to sex, race or religion. Advice: Although, the nature of attribute is not clear, still we have all the reasons to believe that Amanda was refused job only because of her gender. This position places M/s Toys4U in a defensive position as to their policy toward women and discrimination o job. They people can be sued in this regard. The court in such a case may decide the matter in favor of Armanda and gainst company’s employment policy, to cover up the company needs to allow job to Amanda. However, if job was denied to Amanda due to some other traits/characteristics like experience, qualification, availability for work etc, the company can defend itself favorably in the Court of law. Bibliography Batisha v Say 1977, IRLIB Brennan v Dewhurst Ltd 1993, IRLR 357 (EAT) Consumer Protection Act 1987 Godley v. Perry 1960, 1 All ER 36 QB, p. 324 Grieg v Community Industry 1979, IRLR 158 (EAT) KG Bominflot Bunkergesellschaft Für Mineralöle mbh & Co KG -v- Petroplus Marketing AG (2009) EWHC 1088 Munro v Allied Suppliers 1977, IRLIB Rogers V Parish 1987, 2 All.E.R. 232 Sales of Goods Act, 1979 Saunders v Richmond-Upon-Thames Council 1977, IRLR 362(EAT) Steere v Morris Bros IDS Handbook 14 Stevenson V Roger 1999, 1 All ER 613 Read More