Introduction To Business Law Final Examination ✓ Solved
Law5a4 Introduction To Business Lawalternative Final Examinat
1. You must answer a total of any TWO questions out of the FIVE questions specified in these assessment instructions. All questions carry equal marks.
2. You should present your answer to each question in the form of an essay of not more than 750 words per question.
3. You are permitted to refer to one of the recommended textbooks such as Law for Business Students, Adams, A. (Pearson Publishing). You are also permitted to refer to other relevant textbooks, internet resources and legal journals/articles – In such event you should provide a bibliography identifying your sources. The bibliography must be provided at the end of your assessment. It does not form part of the overall word count.
4. Your completed assessment should contain a title page containing your name and student number.
5. Your completed assessment must be electronically submitted via Blackboard by 11.59pm on Thursday 17th December 2020. No other method of submission will be accepted.
ASSESSMENT: Each one of your two answers will be marked out of 100. This assessment counts towards 40% of the overall mark for the LAW5A4 Module.
Marks will be given for:
- Quality of response to the presented question.
- Demonstrating a broad knowledge and general understanding of the main areas covered by the presented question.
- Demonstrating awareness and understanding of the specific issues raised by the presented question.
- Collection, comparison and synthesising relevant information from different sources.
- Presentation of an analytical conclusion in response to the presented question.
Paper For Above Instructions
In this examination, I will address two questions concerning contract formation and the statutory duties imposed on directors in company management. The first question I will tackle explores the situation between Adam and Chantelle regarding the sale of a motor car. The second question involves the statutory duties of directors under company law.
Question 1: Contract Formation between Adam and Chantelle
To assess whether there is a valid contract between Adam and Chantelle, it is important to consider the elements that constitute a legally binding agreement. According to contract law, a valid contract must have an offer, acceptance, consideration, and a mutual intention to create legal relations.
In this scenario, Adam made an offer to sell his car for £5000, which constitutes the first step in the contract-making process. However, Chantelle did not accept this offer initially; rather, she indicated that she would think about it, which shows she did not have the intention to agree to the terms at that moment. This is important because a mere expression of interest does not constitute acceptance.
When Chantelle later offered £4000 for the car, this represented a counter-offer. A counter-offer effectively rejects the original offer, meaning that Adam's proposal to sell at £5000 was no longer valid. Adam's refusal to accept Chantelle's counter-offer was appropriate; he had the right to refuse it without legal repercussions. Following this exchange, it is crucial to note that when Chantelle later wrote to accept the original offer of £5000, Adam had already entered negotiations with another buyer. Thus, the question arises whether a valid acceptance occurred before Adam sold the car to someone else.
The rules governing acceptance state that it must be communicated effectively to the offeror in clear terms. If Adam did not inform Chantelle about finding another buyer before she accepted the offer, there could be a valid argument that a contract exists. However, the legal principle of "revocation of offer" is significant here. Adam's actions in seeking out another buyer may constitute a revocation of his offer to Chantelle. An offer can be revoked at any time before acceptance is finalized. Therefore, the conclusion might lean toward the fact that no contract was formed, as Adam effectively withdrew his offer before Chantelle's acceptance.
Ultimately, it appears that there is no valid contract between Adam and Chantelle due to the timeline of communication and the lack of mutual agreement at the time of her acceptance. It is vital for Adam to be aware of these nuances in contract formation, especially in transactions involving sales.
Question 2: Statutory Duties of Directors in Company Management
The statutory duties imposed on directors are primarily outlined in the Companies Act 2006. These duties establish the legal framework for how directors must act when managing a company. The duties focus on accountability, transparency, and the fiduciary responsibilities directors owe to the company and its shareholders.
One of the primary duties is the duty to act within their powers (section 171). Directors are required to act according to the company’s constitution and only exercise their powers for the purposes they were conferred. This duty ensures that directors do not exceed the authority granted to them and that they make decisions that align with the company’s goals.
Another essential duty is the duty to promote the success of the company (section 172). Directors must consider the long-term consequences of their decisions, the interests of employees, the need to foster business relationships with suppliers, and the impact of their operations on the community and the environment. This duty emphasizes the importance of ethical governance and sustainable business practices.
Directors also have a duty to exercise independent judgment (section 173). They should avoid conflicts of interest and should not be influenced by third parties when making decisions. Similarly, the duty to exercise reasonable care, skill, and diligence (section 174) requires directors to apply a standard of care in their decisions that an ordinary person would exercise in a similar position.
Furthermore, under section 175, directors must avoid situations in which they have a direct or indirect interest that conflicts with the interests of the company. This specifically addresses the issue of personal interests overriding the interests of the company, enhancing corporate governance standards.
In conclusion, the statutory duties of directors are complex and designed to safeguard the interests of the company, shareholders, and stakeholders. Breaches of these duties can lead to significant legal consequences and impact the company's long-term sustainability and reputation.