Alan and Cath

Alan and CathDomestic/Social agreementIt is presumed that there is no intention to be bound unless it can be shown otherwise.Balfour v BalfourJones v PadavattonMerritt v MerrittCommercial agreementIt is strongly presumed that there is intention to be legally bound unless it can be shown otherwise.Edwards v SkywaysRose and Frank Co v Crompton BrosApplying the above law to the fact of the problem scenario leads to the following result:This situation is similar to that in Merritt v Merritt and Cath would be able to enforce the agreement for Alan to pass the title. The usual presumption of domestic agreement could be rebutted not just by the fact that they are separating, but the agreement was reduced to a written documentAdamIn the case of Foakes v Beer1884the court affirmed the doctrine of part-payment that payment of a smaller sum does not discharge a debt of the greater amount. However there are four exceptions:-part-payment made by third party-composition with creditors: all creditors agree to receive a smaller part-accord(the two parties agree freely to get less) and satisfaction(payment at a different time or place or in different currency)-promissory estoppelPromissory EstoppelThis is an equitable doctrine. It is to prevent a person going back on his words to accept a lesser amount at least for a period of time.Central London Property Trust Ltd v High Trees House Ltd 1947This doctrine is rarely applied in the english judiciary system. When applied, it has the following limitation:-it is a shield not a sword, a defence not a cause of action-it only has suspensory effect-the party relying on it must also act in accordance with the equitable doctrine Applying the foregoing laws into the fact of the problem leads to the following result: 1.Dawn’s case can be a good example of promissory estoppel. As estoppel is onlyeffective in a period of time, Adam could retract his promise and recover the full amount. Secondly Dawn is now capable of paying the money, so it would be unfair under the equitable doctrine if she does not pay.2.Eric’s case is not a part-payment problem, but a breach of the contract. Hisbehaviour violates the Contract law and Adam could get the full payment.DismissalConstructive dismissal appear s where the employee terminates the contract by reason of the employer’s conduct.This is an significant breach of the employ er. In such situation the employee is entitled to make a claim for the unfair dismissal no matter the fact that he had resigned.If the employee does not resign, he could be deemed to have accepted the breach and waived any rights.RemediesIn relation to a successful claim for dismissal, the following remedies would be possible:Reinstatement: resumption of work as though there had been no break, and nullified the effect of dismissal.Re-engagement: re-employment of the employee under a new contract of employmentCompensation:Basic award: based on the age, weekly pay and length of employment Compensatory award: within the tribunal’s discretionaryAdditional or higher awardAgency RelationshipThe principle and agent relationship can be created in a number of ways:By agreement:Express agreement: actual appointment by written or orallyImplied agreement: implied by party’s conduct or relationshipBy Necessity:Agency relationship by necessity occurs when emergency requires the agent to take particular action in order to protect the interests of the principal, though there is no agreement between parties.The conditions of principal are:P rincipal’s property is in possession of agentEmergency makes agent’s action necessary.Impossible to communicate with principalAgent acts in best interest of principalBy ratification.The principal can ratify the action of another person to create an agency relationship after the event. This has retrospective validity and the agent is relieved from any liability.The conditions of principal are:Capacity: capacity to enter into contractExistence: existed when the contract and ratification are made.Identification: be identified when the contract is made.Legality:Awareness of all material factsRatify within a reasonable timeBy EstoppelThis is known as Agency by holding out. Agency relationship by estoppel arises where the conduct of the principle implies that A is his agent even though he is not. The principal is thus bound.The conducts areFails to noticeAgrees to appear to have more authority than actual oneDoctrine of Separate PersonalityA company is a separate legal entity which is separate from its shareholders, directors, managers and employees. The case usually cited in relation to the doctrine is Salomon v Salomon & Co Ltd 1987The consequences of incorporation are:Limited liability: the members are not responsible for the company’s debts without agreementsLegal capacity: the company can enter into contract, sue and be sued in its own nameThe company can be liable for its own debts.Separation of ownership and managementPerpetual Succession: as the company exists in its own name, right changes between shareholder have no effect on its status or existence.Own its properties: properties is owned separately and independently by the company but not the sharholders.Lifting the veil of incorportionIn certain circumstances, the company is treated as in some degree to identified with its members or managers as though there is no distinction between them. Consequences: the members or managers could be liable for the company’s debts. Such situations arises as follows:Statutory examples:Wrongful trading and fraudulent trading: if the director is disqualified or wrongful trading exist(Insolvency Act 1986; Company Directors Disqualification Act 1986) Trade without certificate: the director is liable for any lossCase law examples:Group company: in the case of DHN food distributors, the court treated the separate company as a single group based on agency relationship and with the doctrine of economics reality. But more recent case shows that the court is more reluctant when lifting the veil of incorporation. Adams v Cape industries 1990Sham company: a mere facade concealing the true facts. Woolfson v Strathclyde Regional Council 1978CapitalCapital of a limited company is regarded as a guarantee or a buffer for the creditors. Once the capital is raised, it must be maitained, which includes share capital, share premium account and capital redemption reserve.PurposeThe Essential way to protect the creditors of the companyThe two key aspects of this doctrine isThe creditors can see that the capital is not dissipated unlawfullyThe shareholders must not return the capital back secretlyThere are specific control over capital, including rules in relation to capital reduction and company distributions.Capital Reduction-company can reduce its capital at any time according to CA06-company can reduce the capital by:Cancellation of liability of partly-paid sharesCancellation of part of the value of paid-up sharesReturn the capital in excess of the company’s need.The procedure isPublic company: special resolution; apply to court; list creditors; creditors’ consent; resolution deliver to RegistraPrivate company: special resolution with solvency statement for the following 12 months; deliver to Registra within 15 days from passing the resolutionDirector DutiesThe director must act in the way most likely to promote the company for benefit of members as a whole.The duties of directors are:Duty to promote the success of the business, actual decision must be taken in good faith by directors.Duty to act within power or constitutionDuty to exercise independent judgment.Duty of skill and care:Not bound to give continuous attentionDelega tion to employeeDuty to avoid conflict of interestsDuty no to accept benefit from third partyDuty to disclosure interest concerned.The duty of directors are owed to:The company:Owe duty to company as a wholeThe membersOwe duty to members as a wholeNo duty to individual.Role of Company AuditorsAuditors are appointed to ensure the interests of the shareholders of the company are being met. Their key function is to produce report comfirming.QualificationCan be a person or a companyMust have professional accoutancy qualificationA member of recognised supervision bodyA member of a oversea body authorized by the governmentIndependent from the company, must not beAn officer of employee of the companyParner of an officer or employee of the companyIt is a criminal offence to act whilst ineligibleAppointmentBy ordinary resolution by shareholdersFirst and casual vacancy by directorsSecretary of State.RemovalAt any time by ordinary resolution with special notice.Entitled to make a written representation and have them circulated or read out at the meeting.Deliver to Registra within 14 daysResignationAt any time with notice.May require the members of the company to call a meeting to explain circumstances need attention.RightsAttend the GMAccess to accounting books at all timesAccess to any information and explanationsReceive copies of written resolutionDutiesDuty to report:Whether the company accounting report has been properly preparedWhether the individual comapny and group account show a true and fair viewDuty to investigate:Whether the company keep an adequate accounting record and obtain adequate accounting returns.Whether the account is in agreement with the recordWhether they obtain all information and explanations necessary.Duty to give reasonalbe skill and careDuty to give particulars to directors’ activities and transactions. E.g. loan, emolument etc.Binding precedentThe doctrine of binding precedent, or stare decisis, lies at the heart of the english legal system. It is a system of following decisions made in previous cases where the facts are materially the same.There are two kinds of precedent:BindingpersuasiveThe facts affecting the differentiation are:The hierachy of courtsThe ratio decidendi(Legal reasons for making a decision) and obiter dicta(statement made by the judges)Material factsThe hierachy of courtsGeneral rule: the decisions of higher courts bind lower courts but not vice versa. The supreme courts(previously House of Lords): bind all lower courts but not itself The court of appeal: binds all lower courts and itself in civil casesThe high court of justice: bound by higher couts not itself but strongly persuasive The county court and magistrates’ court do not create precedents.Advantages of binding precedentsEfficiency: it saves the courts, lawyers and clients timeFlexibility: judges can manipulate common law and to develop law in particular Consistency: it is important that cases with materially the same facts are decided in a same wayCertainty: once the binding precedent has been made, other courts and judges must follow the caseDisadvantages of binding precedentsMake the law complex with vast number of casesRigid, limits the judges overall discretionHard to apply and hard to understandReactive rather than proactiveDelegated LegislationThere are two main form of legislation:Act of parliament-statutoryDelegated legislationThe parliament includes the House of Lords, House of Commons and the Monarch Delegated LegislationIt is made on behalf of the parliament, with the purpose to save parliament time. It is subordinate or secondary legislation. There are various type of delegated legislation -statutory instruments(Sis, rule and regulations made by the government)-bye-laws(made by local authority with limited territorial scope)-orders in council(made by government, sanctioned by the privy council) Advantages:-time-saving-access to special expertise-flexibility-quick and easy to make and to changeDisadvantages-undemocratic(made without recourse to the House of Commons)-bulk(hard to keep up with)Means to control Delegated Legislation-Parliaments review: Some Sis need to be approved by the parliament. Others become law after 40days unless required to annul-Judiciary review: the court can declare a SI void and unenforcable on the groud of ultra-vires-Human Right Act 1998: declared by the courts invalid if incompatible with HRA1998Source of LawThe english law derives fromCase lawCommon lawequityLegislationEuropean community LawCase lawConsist of common law and equityDeclared by the judges on the basis of fundamental legal principlesThe centre of english lawCommon law-Developed from local custom-based on the system of Judicial Precedent-the only remedy is damage-rigid and inflexibleEquity-developed as a form of appeal to the injustices of the common law-various remedies: specific performance, injunctions-more flexible-on the basis of fairness and good conscienceBinding precedentLegislationThis is law produced by the parliamentary system. The doctrine of parliamentary sovereignty means that parliament is the ultimate source of law.It can be categorised into private law and public law, or consolidating law and condifying law.Delegated legislationThis is law made by person or body. A validly enacted piece of delegated legislation has the same legal force and effect as the Act of Parliament under which it is enacted. Delegated legislation can take the following form:Orders in councilStatutory instrumentProfessional regulationsBye-lawsThe European UnionIn areas where applicaple, the European Union law prevails any existing UK law to the contrary. The source of European Community law are:-Internal treaties and protocols-international agreements-secondary legislation-Decisions of the European Court of JusticeConsiderationDefinitionConsideration is an act for forbearance on the part of one party to a contract as the price of the promise made to hime by the other party to the contract.The basic rule is:Every simple contract needs considerationSpecial contract-contract made by deed do not need consideration unless the agreement rquire it Dunlop v SelfridgeSufficient considerationThe statement that consideration should be sufficient but not adequate means that it is for the parties themselves to determine the terms of their contract.Sufficient:-there must be some monetary value to the consideration-there must be capable in law of ammounting to consideration-need not to be adequate means no need for equal value in consideration Chappell v Nestle Co LtdPast ConsiderationPast consideration is an act which is performed before the other party made their promise.Past consideration is insufficientThere are exceptions where the plaintiff performed an act at the request of the defendant and payment was expected.Invitation to TreatOfferAn offer is a definite and unequivocal statement of willingness to conclude and to be bound by a contract.The essential element of an offer are:-clear intention to be bound-Statement must be definite and unequivocal-made to a particular person, to a class of persons or even to the world-not effective until communicated to the offeree.Offers should be distinguished from the following:A mere statement of intentionA mere supply of informationAn invitation to treatInvitation to treatAn invitation to treat means an invitation to the other party to make an offer. The following examples of common situations involving invitations to treat:-display of goods in a shop window-display of goods on shelf in a self-service shop-a public advertisement-a shar prospectusExclusion ClauseAn exclusion clause or exemption clause sets out the rights and obligations of the parties to a contract. It seeks to exclude a party’s liability for breach of contract. CommonTermsSource of termsExpress Terms: which are specifically inserted into the contract. EnforcableImplied Terms: implied by statute or the courts and rarely by custom.Express terms override implied terms.Types of termsComditions: root of the contract; damage or dischargeWarranties: incidental; damages and injunctionInnominate terms: indeterminate term. If trivial then damages only. If serious, damages and discharge both.DamagesDamages are compensatory not punitive.Liquidated DamagesGenuine pre-estimate of expected loss. EnforcablePenalty DamagesThreatens large damages for breach. UnenforcableA clause is presumed to be a penalty if:The stipulated sum is extravagant compare to the lossThe same sum for different breaches both trifling and seriousThe stipulated sum is larger than the actual payable if contract were performed Assessment of unliquidated DamagesRemoteness of lossCannot recovered for loss of enjoymentMeasure of damagesPut the claimant in the position he would have been in had the contract been properly performedFurther PointsIf no actual loss, the claimant can recover only nominal damagesThe claimant must take reasonable steps to mitigate loss.Trade without certificateCompany and officers are liable to a fineCriminal offence but contract are still binding.Directors are personally liableA ground for winding up if not obtained within 1 year.。