The Relationship between Suppliers of Precision Equipment in India to Its Customer in the UK - Assignment Example

International Business Laws Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecture Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 15th March, 2012. Introduction International laws are cord of ethics that govern business people all over the world. International law are divided into two categories namely; the public law and the private law. Public laws govern people from different nations while private laws govern people, businesses, and non-governmental organizations from different countries if they have a dispute (DiMatteo & Dhooge 2005, pp. 5). Countries are only governed by these laws if they become member of the international laws. These laws were put in place after the First World War by the different countries in order to settle the disputes. The disputes are taken to international court which looks in legal matters that the two or more sides are in contention. Private laws are further divided into other categories like business laws, commercial laws, financial laws etc. It is under business laws that contract law is learnt. Contract is a legal agreement between two or more parties seeking the assistance of the other party. In contract, all terms and conditions are well spelt out and signed by the involved parties. There are 16 types of contracts in which the conditions and terms vary depending on the type of contract. Due to the diversity and the nature of contract, the issue of commercial contract contention has long been argued and changed by laws. Since a contract is a bond between parties such as the seller and the buyer, employers and the employees, business owners to customers and companies to stake holder, it therefore forms the basis of all commercial relationships. But since it is dynamic, the contention of contract as the basis of commercial relationship is a valid argument though it needs to be proved. Though at times these bond is broken e.g. by lack of competence and breach of contract, government should come in and protect both parties were a disagreement arise (Murphy 2006, pp. 17). The employment of workers The contract between the workers and the employees is well defined by the governments of individual parties in that, the governments abides to the stated laws to protect rights of workers. In the contract the terms which include the salary, safety, the moral and social standards of the workers are well stipulated (Burnham 2011, pp. 84). In the light of these, the employers are the one with no contention and therefore the contracts should be adhered to, in favor of the workers. The reason why the contracts are signed is because the employers are fond of terminating the employment based on the employees’ performance and competence. Therefore, the contract acts as the protector of employees not to be subjected to this unfairness. On the other hand, the contract serves as the protector of the employers so as not to be sued by the employees in case they are not satisfied with the employers’ working conditions. In other occasions, contract acts as a legal document which can be used in a court. The nature of the contract signed can vary depending on the initial conditions. The conditions and terms can also be negotiated to suit both parties. Due to this, there are many forms of employer to employee contracts depending with what was agreed in the negotiations. As described by the above explanations, contract of employment is the corner stone of relationship between the employer and the worker. It is also the foundation of all legal matter that may arise. For an employee to be formally a worker of the employer, he or she must sign the contract and if need be, seek legal advise on how to negotiate the terms and conditions best to suit both parties. Without contract, the worker may not be fully recognized as a worker and may not enjoy the rights of a worker fully. The contract of employment therefore applies only when both the worker and the employer sign either formal or informal contract. Failure to sign the contract shows that, one of the two parties is not fully satisfied with terms and conditions. If on the other hand the contract is signed and one party breaches the agreement then a legal act is taken and damages are hence paid. Contract conditions are put in the letter of appointment. The relationship between suppliers of precision equipment in India to its customer in the UK The relationship between the supplier of equipment and the customer who is overseas is governed by the United Nations Convention on Contracts for the International Sale of Goods, commonly abbreviated as CISG. The contract in here is built on good faith and the obligations of both seller and buyer. This kind of contract is under international relationships and the contention will arise if the supplier of equipment based in India fails to deliver the equipment in good time. If say, the equipment doesn’t arrive in time then, the customer will suffer and may otherwise find other sources of the same equipment. By so doing, the supplier is breaching the contract and can jeopardize the relationship therein. If on the other hand, the supplier delivers the equipment in time, the customer in UK is obliged to enter into a relationship with supplier of the equipment (Guth 2007, pp. 99). This breach of contract will not only cause damage between the two involved parties but also to international relationships between the two countries. In worse situations, the conflict between the two countries can lead to war. If the situation is this worse, the multilateral system must respond to the issue and come up with plans to better the relationships. To avoid this, the supplier may choose to change the mode of transportation, i.e. use air transportation instead of sailing. Again, in this kind contract the person making the supply contract should be same as the person who the equipment’s are delivered to. By ensuring this, it will reduce the risk of making erroneous supply. Though this kind of contract varies in different counties, it is always on the suppliers risk to make sure that the goods or the equipment are delivered as ordered and at the right time. This contract is binding when both parties agrees to the terms and conditions as negotiated in the contract signing or re-new of the same. The two parties will also negotiate the kind of contract (either written through an e mail or oral) to have, and how the two will sign the deal. The customer in this case can enter into another contract with another supplier while still in this contract. In comparison to the first contract (between the employer and the employee), the two are similar in that, without the contract there is no business relationship between the two parties. Frustration of a contract for personal services This kind of contract is called implied contract. The terms and conditions are not negotiated, but as the word suggests, the conditions are assumed. Since offer plus acceptance equals a contract, the person giving the services is obliged to give proper services to the customer’s satisfaction. The customer offers a contract by asking for the services, if the service provider accepts the offer then he is bonded by this contract. If say, a barber hair dress’s a customer and the customer is not satisfied, then the barber ought to redo the hair to customers’ satisfaction. The contract assumes that, an express form of contract actually existed between the two parties. The contract is not formal but it is recognized by many business institutions. If a breach of the contract arise then, the failing party is required to amend the contract if not renew it afresh. In this case, the contention lies with the service provider (Guth 2007, pp. 45). Implied contract is binding in the negotiation process and if in the process, one party declines the offer then the contract doesn’t exist. If in the process of providing the service a mistake occurs, both parties are required by the contract to negotiate again and advisably renew or terminate the whole contract. Though the extent of ‘goodness’ or ‘badness’ may be relative, it is upon the two parties to come up with the required standards and work according to them. In other occasion’s say, when a customer buys a commodity from a shop, the customer assumes that the shopkeeper is licensed by the relevant authorities to conduct such business and that the bought commodity meets are the legal standards, not forgetting its quality. From the onset, it is clear that the contract is so obvious that it need not be discussed at the beginning, in the process and/ or end of the business. If on the other hand, the customer at the end of the service fails to pay for the services, he is also breaching the contract. In normal situations, it is supposed to be a fair scenario for both parties (CCH Incorporated & Nash 2007, pp. 132). The customer asks for the service from the service provider, the service provider accepts the offer; he renders the service, if the customer is satisfied with the service, pays. A serious ankle injury sustained by a visitor to the premises of a company, where faulty stairs tread has been reported by a cleaner three weeks before There are two kind of contract that applies to this scenario. One, is the implied contract between the company manage and the visitor. The management advertised there company for the visitors to visit, therefore binding an offer which eventually the visitor agree to. In the advertisement it is certain that the management mentioned something to do with the safety in the company. When the visitor gets an injury during a visit therefore is a breach of this implied contract. The company management is therefore liable to compensate the visitor for the loss. The losses incurred can be both physical and financial. In each kind of damage, the visitor should be compensated accordingly. The other form of contract is between the contractor of the building and the management. The contractor should maintain the stair treads regularly to avoid such preventable accidents. In addition, the contractor should buy the company for any losses incurred by their failure. The contract in there, is binding in the first instance when the two parties were signing the express contract. If the company reported the faulty stair treads to the contractors and the contractor didn’t respond in time, then the company management should negotiate for another contract if not renew the first one. The bond of contention is with both the contractor and the management of the company. For the visit, he or she has a legal ground to claim the compensations but for the management it will highly depend on whether they reported the faultiness to the contractor in time. It is therefore important to note that one kind of contract can affect the others in one step-up. Though the implied contract in this case between the visitor and the company manage is informal, it is recognized by the judicial institutions. The worst situation out of these breach of contracts is the closure of the company as it under goes repair or worst still the loss of visitors. To avoid such scenarios, it is important for the management to be on high alert if any thin is faulty and the contractor should be checking the stair treads regularly. The significance of the Articles of Association in a limited company According to Section 2 (2) of companies Act defines Articles of association of a limited company as the rules and the regulation of the company. These rules and regulation are in one way or another dynamic i.e. they change with time. The principles in the article relates to the internal affairs of a limited company. In the article such thing like the power of the directors and the other officials including the stake holders, the voting rights and alike, the strategies to be put in place to carry out the day-to -day activities in the company, the originality of the document, and the rights and duties of all the members of that company. Therefore every private limited company should have their own Article of association which must be drafted by the registrar of the companies. They article should be well printed and every member of the company sign in presence of at least one witness who should verify the signature. From definition, it is clear that the article of association is not a contract. It is put of the procedural activity of a company but to some extent it is not binding. To some other extent, article of association is a contract between the company and all its shareholders. This form of contract is a special form of a contract which is often referred to as the memorandum. By signing this contract the shareholders are obliged to conform to its prescription. The document is crafted to increase the efficiency of the company and the relationship among the shareholders. The contractual bond between the shareholders and the company is only limited to the provision of the article. If say, the article is changed by the company’s management to give them more power without the shareholders consent, then the company has breached the contract therein. The validity of the article is limited to the inscribed obligations in the statutes and it is breached when it is not properly changed or provided for. At this juncture, it is worth noting that not all companies that have such contractual documents but only those which are private and meet the entire requirement under the Act of Parliament. The contention in this kind of contract is with both parties, because everyone’s obligations and rights are included in that same article. In this respect, contract is not the basis of all commercial relationships. Specific problem scenario A Norwegian business man (Smith) who works as a director of Spurious makes a telephone call to a sole trader (Jones) who lives in Middlesex in UK and specializes in software developing. Through the call, the two discusses about the software that Smith what to be developed. Shortly after the call Smith e- mails the design of the software to Jones who starts immediately working on it, only acknowledging with a short message ‘Thank you for your e-mail.’ In the e-mail Smith had stated the payment mode upon successful completion of the work and the date the work is due. Jones keeps on reporting his proceedings with Smith in which he suggests that the software can be tried in an e -mail. In the course of work, Smith is dismissed from work and on the date the work was due Jones receives an e-mail from Spurious telling him to stop developing the software. The Jones goes ahead and asks for money for the work done. The company refuses to pay claiming that the intellectual property for the software initially belongs to them. Jones then goes to reporter of a trade newspaper and reports that Smith is a crook and Spurious has cheated him. Thereafter, Smith and Spurious separately sues Jones for defamation. What is the legality of the purported contract? The contract therein is binding in the sense that, from the onset there was an agreement between Jones and Smith. Through the telephone call and the e-mail, both of them negotiated the terms and conditions of the contract. This is true because, Smith agreed to give the intellectual property of the software to the software developer (Jones) and simultaneously Jones accepts the offer. Again, since offer plus acceptance equals a contract, it is therefore without fear of doubt or contradiction that there exists a contract between the two parties. Despite the termination of the work Jones deserves to be paid since he is not the one who breached the contract. Therefore, Spurious should consult Jones and negotiate the way forward, either to renew the contract or pay for the work done then end the contract. On the other hand, Smith who directed Jones and actually legally formed the contract should apologies by making sure that Jones gets his pay. Due to the nature of the contract in the scenario (express oral) Jones has the entire legal basis he may need to sue the Smith if not Spurious. What is the legality of IP in the ‘novel software’ process? The legality of an intellectual property (IP) in the novel software highly depends with the developers’ country. The IP right protects the developer of the software in the sense that the work he has developed should not be duplicated or used without the developer’s consent. The copy right authorities should come in and try to sue the case by protecting the author of the software. From the scenario, it is clear that as Spurious claims the IP really belonged to the company. Jones work was only to develop the idea. Given the fact that the company did not fully complete the invention, it is recommendable for Spurious to legally identify IP as belong to the company because legal rights requires that formal registration of intellectual property be formal in order to be recognized by them. It therefore put a difficult task on either party to prove the ownership of the IP. What is the legality of Jones’ claiming for money for the work done? Since there existed a contract between Smith and Jones and the work was done according to the instructs in the conditions of the contract, then Jones should not only get money for the work done but also compensation for the breach of contract. From the scenario, Mr. Jones worked to every specification and as instructed, nowhere did he go against instructs. Again, the work was complete it’s only that he had not handed in the work. So, with these in mind, Mr. Jones should get his pay no matter who the IP owner is. In addition, Jones has a legal ground to sue both Spurious and Smith, since they both colluded to con Mr. Jones. And again, Jones had completed his work so he should get the full pay as it was in the initial contract. Mr. Jones should instruct the solicitors so that he gets a more legal basis and craft against them properly. Conclusion In conclusion, Mr. Jones should first seek advice from the lawyers to establish whether he has good case against the other party. He should also prove without doubt that a contract really existed between the two. To verify this, it is easy since he still has the initial e-mail and probably the telephone conversation between him and Mr. Smith. The legality whether the contract is binding can be proved by the facts that; Jones accepted the offer and Smith offered the offer. Those facts alone, proves that the contract is binding. He must also prove that he worked to the required standards, as required of him by the contracts’ terms. Jones has the work to show as prove that he worked the satisfaction of Smith and according to what was prescribed. Finally, Jones must prove without reasonable doubt that Smith and Spurious breach the contract by terminating it at the end of the work. If and only if, the above mentioned proves qualify, then Mr. Jones can ask for compensation for any losses that he might incurred in the process of claiming his pay( Lawrence 2009, pp. 78). Finally, since justice delayed is justice denied, Mr. Jones should ask the judge to compensate him for the time lost. Bibliography Burnham, S.2011.Contract Law for Dummies (For Dummies (Business & Personal Finance)). USA: For Dummies. CCH Incorporated & Nash, R.2007. Government Contracts Reference Book, 3rd Edition. California: CCH Incorporated. DiMatteo, L & Dhooge, L.2005 .International Business Law: A Transactional Approach. USA: South-Western College/West. Guth, S.2007.The Contract Negotiation Handbook: An Indispensable Guide for Contract Professionals. Online: Lulu.com Lawrence, M.2009.The Complete Book on Overcalls at Contract Bridge: A Mike Lawrence. Canada: Master Point Pr. Murphy, S. 2006.Principles of International Law (Concise Hornbooks). USA: Thomson West. Read More