The Concepts of Law and How Business Law Is Being Applied in Business - Assignment Example

Law for Business Student’s Name: Instructor’s Name: Course Code: Date of Submission: Introduction This assignment will discuss the concepts of law and how business law is being applied in business. The answers will be provided based on the case study provided. Question one The kind of business that is practiced in this case study is partnership. Batty, Chan and Co is the form of business that was formed by two individuals who had mutual interest. In this effect, partnership is defined as the form of business which is started by two or more parties who contribute capital to start the business. In this case, the partners are Robert Batty and Rosie Chan. They had same interests after graduating from college to start the business (NSW 2000). The advantages of partnership include ability to raise funds and quality management decisions however it takes long to make decisions due to consultations. According to the partnership act, the partners have inclusive rights and they have to sign memorandum of agreement so that the terms and conditions of the business can be understood. For instance, in the case between Chan V Zacharia (1984), the conditions necessary for the partnership can be understood. In this case, the partnership existed but it was based on trust. Question 2 a). According to the partnership act 1958 Division 4, the misappropriation of funds or property by one of the partners can make the company to be liable for the misappropriation of the funds. In this case, Rosie had agreed to order the property from Wood Crafts Pty Ltd so that she can get the commission (NSW 2000). However, Rosie made this order breaching the partnership agreement that stated that when buying anything worth more than the value of $7,000 should be made with the consent of the all the partners (NSW 2000). However, the order was made with one of the partners and this means that the company is liable to pay for the ordered materials. Rosie is one of the partners and therefore she was acting on behalf of the company. This means that Wood Crafts Pty Ltd has the right to recover $9500 for the furniture from Batty, Chan & Co. This is because there was a binding agreement between Wood Crafts Pty Ltd and Rosie and therefore Rosie is liable for the actions though the company will be held vicarious liable. b). According to the partnership act 1958, there is no individual who should take pecks and bribes from the business partners at the expense of the company. This means that Robert had the right to be informed by Rosie regarding the commission of $950. In any case, there should be no commission paid because this was a partnership business not agency services (NSW 2000). As a result, Robert should make sure that the commission paid to Rosie has been put back into business and not for personal gain at the expense of the company. This is among the integrity issues that should be practiced in any form of business (Kelly, H & Hendy). In this context, Robert should restrain Rosie from using the commission to buy the notebook for her personal use since this is a partnership business and there is no partner guaranteed to solicit for bribes or commission from the business partners. Considering the case between Lloyd v Grace, Smith & Co (1912) AC 716, it was determined that consultation is the key concept in the success of partnership and there is no business transaction that should be conducted without the consultation of other partners. This was indicated by this case where the court determined that there should be no commission paid individuals to the partners. Question 3 In any agreement, the terms and conditions of agreement should be followed to the latter. In this case, Lucy has the right to be compensated for the losses she sustained. This is because it is Lucy who made the mistake out of her distress and this led to the losses that were sustained. These losses were made because of Rosie’s ignorance which was caused by stress. In this case, there a valid contract between Batty, Chan & Co and Lucy who was the client seeking the advice of the company. However, due to stress and lack of cooperation among the partners, Rosie failed to perform her duties effectively. According to business law, any loss that is caused by negligence has no defense. These losses were encountered because of the negligence of Rosie (Adams 2009). In the court of law, Lucy will argue that it was out of ignorance that the losses occurred. In any case, it is the Batty, Chan & Co that will suffer the loss not the client. In this context, Lucy will seek compensation in the court of law citing the business law. This means that the Lucy will be compensated for the two losses that were caused by Rosie when transacting her business on behalf of the company. Question 4 When signing the partnership agreement, the policies for dissolution should be explained and agreed by both partners. Some of the reasons of dissolution include bankruptcy and disagreement. In this case, dissolution of Batty, Chan & Co means that the business will be disbanded and this will mean that the property will be shared according to the agreement in the partnership agreement. However, since Batty, Chan & Co has not completed to pay for the lent that was given by Dr Lawrence Batty as a startup capital. This means that the partners had not right to divide the property since Dr Lawrence Batty owned the lease of the office premises and therefore had the right to own the premises (Burnett 2004). In addition, Dr Lawrence Batty will own the premises because the loan he had given as a startup capital had not been repaid back. In this case, the dissolution of Batty, Chan & Co will mean that Dr Lawrence Batty will own the lease of the office premises although he was not one of the partners to the business but was one of the business partners (NSW 2000). Further, upon dissolution, the property will be shared between Robert Batty and Rosie Chan based on the ration of their contribution to the business after repaying their debts. This is according to Partnership Act 1958 which discloses the dissolution of partnership. Conclusion Business law is concerned with the laws that govern business transactions. Partnership business is the type of business that is started and owned by two or more people who contribute capital towards staring the business. The partnership agreement has to be signed when entering into the partners including the terms and conditions of the partnership as well as the reasons for dissolution. Therefore, in any business, the business laws should be applied. References Adams, A 2009, Law for Business Students, London, Longman. Burnett, R 2004, Law of International Business Transactions, OUP Oxford. Kelly, H & Hendy, J 2014, Business Law, London Prentice Hall. NSW 2000, Parnership Act 1958, Government of Australia. Read More