Unit 7 Assignment on Business Law

Unit 7 Assignment on Business Law

According to the situation, Ian and Nick have chosen to start a business offering Office Apps after studying the strong demand and good profit margins. The major issue of both is the formation of an organisation, whether it be a partnership business or a recognised corporation. Now, in order to evaluate the efficacy of a partnership or a registered company, both must examine the following differences and benefits in order to make the best business option. I will advise them to use partnership business since it will benefit both of them. For deeper knowledge regarding partnership firm, Ian and Nick might explore the following information:

Advantages and drawbacks of forming a partnership over forming a limited liability company (LLC):


Capital: Capital is required to establish a firm, and as the number of partners grows, so does the amount of money that can be raised. Because of the nature of the firm, Ian and Nick will provide beginning funds to build the infrastructure and create connection with consumers and suppliers. The partnership offers for greater flexibility and expansion possibilities, as well as earnings that may be divided equally among the business partners.

Shared responsibility: The organization’s active partners can share the organization’s duties in order to manage the business more effectively (Hall, 2014). This type of corporate strategy will enable them to maximise their potential and manage operations. The equitable distribution of jobs and responsibilities will aid in the maintenance of the standard through activity monitoring. For example, Ian is strong at concluding deals with clients, while Nick, on the other hand, is good at monitoring the approach of staff members, which will assist to keep the business flowing at the appropriate level. As a result, the partnership organisation will assist in the sharing of responsibilities and the achievement of the objectives through effective monitoring.

Decision-making: A thorough grasp of decision-making and planning of the method to fulfil the company objectives is critical for new start-up organisations. In a partnership, Ian and Nick will share decision-making and assist each other in evaluating market circumstances and trends in order to build the organization’s legal and ethical approach. As a result, forming a partnership will benefit both parties in their efforts to develop a firm offering Office Apps. The ability to make decisions is a critical component of achieving corporate goals.

Profit sharing: Working in a partnership will allow Nick and Ian to split profits equally or according to the amount of cash invested in a start-up firm. This is a significant benefit of a partnership firm since it provides equal opportunity for profit sharing with a reasonable level of effort as well as resource management to support the business’s development. The partnership offers for greater flexibility and expansion possibilities, as well as earnings that may be divided equally among the business partners.

Question 4: Contract terms

According to the scenario, David bought a coffee machine from Kitch Ltd to use in his café, and he stated that he would use it for catering. The coffee maker machine was not operating well after the purchase, which was harming the café’s operations because it took time to create the desired product and services for clients. David has filed a complaint with the manufacturing company, but according to the contract between David and Kitch Ltd, the company cannot be held accountable for any defects in the items once they have been sold (Davidson and Davidson William 2012). The Exclusion clause will be employed in this circumstance to keep the contract between the organisation and David functional.

Contract conditions, according to this provision, include the contracting parties’ rights being limited. There are three main types of exclusion clauses that are utilised for various conditions and situations. The contract between David and Kitch in this instance will include a limitation clause, which states that the organisation is not obligated to resolve all of the difficulties of the other party since one party is not completely exempt from certain obligations.

If David has dutifully signed any contract in which the organization has inserted a provision stating that they are not accountable for any issues that arise after the sale of the goods, David will be unable to take action or bind the organization to offer help in the provided circumstance (Creedon, 2015). In this circumstance, I would advise David to cease purchasing items or services from Kitch Ltd since he may suffer in the future and will have no recourse against the company. On the other hand, if Kicth Ltd does not take action in response to David’s complaint, he cannot compel the organization to do so under contract law.

Question 5 Method of resolving disputes through courts and disadvantage of arbitration

Arbitration is a kind of conflict resolution in which a disagreement is decided by an independent third party in both private and court settings. Traditional arbitration is used to obtain a fair resolution of disputes by an impartial third party without incurring unnecessary costs or time delays (Stipanowich, 2012). The court should not become involved in the parties’ disagreements throughout this procedure. Both parties are free to agree to handle current difficulties in their own methods in the business process, utilizing their own rules and safeguarding instruments that have been offered in the public interest. This is one of the main reasons why the company prefers to adopt the conventional approach of settling disputes through arbitration.

Following are the disadvantages of arbitration that needs to be considering while using this process in business functions:

According to arbitration, the parties split the costs of renting the venue while the other party fights the matter in court.

It empowers the organization rather than the court, which has an impact on the court’s efficacy.

The method is comparable to that of a court, but it takes a long time and costs a lot of money, which is not in the customers’ or other parties’ favor (Ogg, 2014).

If a party does not agree with the arbitrator’s ruling, he or she will have few options for appeal.

Question 6: Consideration

According to the situation, Gavin has told his employees that they would be paid a bonus if they create the t-shirts according to demand. Staff members accepted the challenges and created a number of t-shirts based on Gavin’s remark, but Gavin refused to pay a bonus, claiming that it was the workforce’s responsibility to deliver the shirt on time. The workers are now considering filing a lawsuit against Gavin. In such situation, Gavin and the workers entered into a verbal contract, which is legally binding under UK law.

Because there is an offer, acceptance, consideration, and purpose to form legal conditions, the worker can make a claim for that specific conduct. Furthermore, an offer is a promise made by one party to another to engage into a contract on specified conditions. Gavin has promised the employees a bonus for their additional efforts in producing football t-shirts for England supporters (Barth, 2016). The contract must be detailed, comprehensive, and able to be accepted. For a contract to be formed, the offer must be accepted absolutely. In this scenario, Gavin has promised a bonus, and workers have accepted the challenge of creating an additional number of t-shirts, but after the assignment is completed, the incentive is not paid.


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