Business Law Assignment
- Bart’s potential contractual liability to Poppy
Bart is not liable in relation to the painting displayed in the shop window. This is because the window display is merely an invitation to treat and not an offer. The difference between an offer and an invitation to treat was brought up in the case of Fisher v Bell [1961] 1 QB 394[1]. The shop owner made a display of a flick-knife in his window. The plaintiff charged him with an offense of offering a flicker-knife for sale contrary to the Restriction of Offensive Weapons Act 1959. The court held that the defendant had not committed any offense because the display of the flicker-knife in the window was not an offer but an invitation to treat.
A contract is made through offer and acceptance[2]. Where there is no acceptance to the offer, then there is no binding contract between the parties involved. An offer that is capable of becoming binding upon acceptance must be clear, definite, and final. An invitation to treat is a mere introduction to negotiation which may result into a contract[3]. Accordingly, an invitation to treat cannot be used as a ground for acceptance. In this case, Bart had had made an invitation to treat through the window display. Poppy saying that she would like to buy the painting is an offer. It is for Bart to accept the offer in order to make the contract binding. Thus, there is no ground for Poppy to sue Bart for breach of contract.
- Lovely Lighting Ltd’s liability to Bart under the law of contract and tort.
Lovely Lighting Ltd is liable both under the law of contract and tort. The Sale of Goods Act imposes a duty on the seller to sell goods that are fit for their purpose[4]. These are implied conditions which cannot be waived by an exclusion clause. Section 18 stipulates that the seller should ensure that the goods meet the required standards of quality or fitness. The goods are also supposed to be durable for a realistic period of time in relation to the use to which they are ordinarily put. Bart expected the shop window lighting to be of good quality and fit for purpose. He also expected the lighting to last for a reasonable period of time. In this regard, Lovely Lighting Ltd was in breach of contract and Bart can repudiate the contract by returning the shop window lighting and claiming damages for the injury caused by the defective lighting.
The liability of Lovely Lighting Ltd in tort comes through negligence. Negligence has four elements: duty of care, breach of duty, causation, and damages[5]. There must be a legal duty to exercise reasonable care. The person obligated to exercise reasonable care must have breached the duty. The claimant must prove that the failure to exercise duty of care caused him injuries. Lastly, there must be physical harm in terms of actual damages. Bart qualifies to sue for negligence because Lovely Lighting Ltd had an implied duty to ensure that the shop window lighting could not cause harm to Bart. Lovely Lighting breached the duty by selling a defective lighting to Bart. The breach caused Bart bad burns on the face and the hands.
Lovely Lighting is likely to rely on the exclusionary clause as a defense both in contract and tort[6]. For an exclusionary clause to be enforceable, it must be incorporated. In addition, it must have covered the breach in question on its construction. Where the exclusion clause satisfies these requirements, the courts also determine whether the clause is affected by the Unfair Contract Terms Act 1977. Section 2 of the Unfair Contract Terms Act provides that there is no exclusion of liability with regard to personal injuries caused by negligence. The defendant can only escape liability where the exclusion clause satisfies the reasonableness test. In the circumstances of this case, Lovely Lighting Ltd may have satisfied the incorporation and construction requirements. However, the company is liable under the Unfair Contract Terms Act.
- Dannii’s status as a worker and Bart’s potential liability to pay her national insurance and tax.
The general rule is that employers must operate PAYE on all earnings of their employees. National insurance contributions and income tax are deducted from renumeration made in any form including commissions[7]. Temporary, casual or part-time workers are also required to pay national insurance and income tax where the earnings reach a certain amount each year. An employee is any person working under a contract of employment, whether the contract was made through express or implied terms[8]. A person is an employee if he works under the control of another party. The employee should have been given the work to perform.
The law requires the employer to deduct national insurance and tax contributions from the wages[9]. The employer must also provide the employee with pay slips. It is an offense for an employer to pay employee cash in hand without deducting national insurance and tax contributions. Where an employee accepts money in such a manner, he risks losing his employment rights and benefits such as Jobseeker’s Allowance, sick pay and maternity or paternity leave. Furthermore, the employee may end up paying the tax and national insurance contributions on his own.
In this case, Dannii is Bart’s employee. There is a contract of employment between them and Bart is required to deduct income tax and national insurance contributions from Dannii’s commissions. Since Dannii had not reported Bart for tax evasion, he may have to pay the income tax and national contributions by himself.
References
Barnett, Daniel & Scrope Henry, Employment Law Handbook (Henry Scrope, 2009).
Burrows, A., Offer and Acceptance. A Casebook on Contract (Portland, OR, North America: Hart Publishing, 2009).
Charman Mary, Vanstone Bobby, and Sherratt Liz, AS Law (Routledge, 2012).
Collins Hugh, Edwig Keith & McColgan, Aileen, Labour Law (Cambridge University Press, 2012).
Deakin, S. Angus & Basil, Michael, Markesinis and Deakin’s Tort Law (Oxford University Press, 2009)
James, Malcom, The UK Tax System: An Introduction (Spiramus Press Ltd, 2009).
Klar, L. & Rainaldi, L, Negligence (Carswell, 2010).
Newbolt Frank, The Sale of Goods Act -1893 – with notes (Read Books Design, 2010).
Stone, Richard, The Modern Law of Contract (Taylor & Francis, 2011).
Turner Chris & Turner Chris, Unlocking Contract Law (Routledge, 2013).
[1] Stone, Richard, The Modern Law of Contract (Taylor & Francis, 2011).
[2] Burrows, A., Offer and Acceptance. A Casebook on Contract (Portland, OR, North America: Hart Publishing, 2009)
[3] Charman, M., Vanstone, B., and Sherratt, L., AS Law (Routledge, 2012)
[4] Newbolt Frank, The Sale of Goods Act -1893 – with notes (Read Books Design, 2010).
[5] Klar, L. & Rainaldi, L. D., Negligence (Carswell, 2010).
[6] Deakin, S. Angus, J. & Basil, M., Markesinis and Deakin’s Tort Law (Oxford University Press, 2009)
[7] Barnett, Daniel & Scrope Henry, Employment Law Handbook (Henry Scrope, 2009).
[8] Turner Chris & Turner Chris, Unlocking Contract Law (Routledge, 2013).
[9] Collins Hugh, Edwig Keith & McColgan, Aileen, Labour Law (Cambridge University Press, 2012).
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