Contents

Introduction.................................................................................................................................................3

Task 1..........................................................................................................................................................4

P1.1 Analyse and advice Mr. Adam on the legal rules on implied terms relating to the sale of goods and supply of services..............................................................................................................................4

P1.2 Analyse and advice Mr. Adam on the statutory provisions on the transfer of property and possession...............................................................................................................................................5

P1.3 Evaluate the statutory provisions on buyers and sellers remedies in sale of goods contracts........6

P1.4 Apply product liability statutory provisions for faulty goods...........................................................7

Task 2..........................................................................................................................................................8

P2.1 Differentiate between types of credit agreements which Claire could use to obtain the new car. .8

P2.2 Analyse the rules on termination rights and default notices for Claire to be informed in case she subsequently has trouble paying the debts as required in the contract..................................................9

P2.3 analyse the general features of Agency and differentiate between the different types of agent. 10

P2.4 Evaluate the rights and duties of an agent to assist Claire understand her position once she becomes an Estate Agent......................................................................................................................11

Task 3........................................................................................................................................................12

P3.1 Outline monopolies and anti-competitive practice legislation in the UK.......................................12

P3.2 Explain the role of the Competition Commission within the context of monopolies and anti-competitive practices and the UK Office of Fair Trading........................................................................13

P3.3 Define dominant positions within the EU common market...........................................................13

P3.4 Consider the given provisions in the context of the application of EU exemptions to potentially anti-competitive practices.....................................................................................................................14

Task 4........................................................................................................................................................15

P4.1 Identify differing forms of intellectual property............................................................................15

P4.2 Outline the principles relating to the protection of inventions through patent rights and their infringement in a given business scenario.............................................................................................15

P4.3 Describe the principles relating to copyright protection and their infringement in a given business scenario.................................................................................................................................................15

P4.4 Compare and contrast the protection of trademarks and business names...................................15

Conclusion.................................................................................................................................................17

References.................................................................................................................................................18

1

Introduction

This report deals with the main principles of legal relationships between the organizations and

the customers. The statutory provisions regarding the transfer of property has been detailed

herewith along with various rights, duties and responsibilities of the agents. The statutory

provisions of the credit agreements, sale agreements and hire purchase agreement and their

differences have been enumerated in this report. After discussing these laws the same has been

implemented in the given business scenarios. This report also discusses about the intellectual

properties. An intellectual term refers to the creations of a person’s mind. The intellectual laws

protect these creations of human by granting them exclusive rights. Trademarks, patents,

copyright, design and Law and Practice are various forms of intellectual property.

Task 1

P1.1 Analyse and advice Mr. Adam on the legal rules on implied terms relating

to the sale of goods and supply of services

Implied term: An implied term in a contract is the term that is set in the contract by custom,

statute, or by the court during the proceedings (In Brief, 2015).

In a sale and purchase contract, the terms implied by the statute are provided under the Sale of

Goods Act 1979 and Supply of Goods and Services Act 1982.The provisions under the act are

implied by statute which provides protection to the consumers (legislation.gov.uk, n2015).

According to section 13(1) of the Sale of Goods Act 1979, it is required by the seller to sell the

goods as per the description of the goods. Under this section, there is an implied term that the

goods corresponds as per the description given by the seller and this section is treated as

condition of the contract if relates to consumer sales (legislation.gov.uk, 2015).A condition is

that term in a contract that gives a contractual right to the consumer to terminate the contract

with the buyer if there is breach in the given terms and provisos of the contract (Poussard v

Spiers, 1876).

2

Applying section 13 (1) in the present case,we see that the store manager described the TV to

be of “very high quality, durable and good for value”; the same was pasted on the TV as well.

This is a description given for the TV. Hence, section 13(1) will be applied here. According to

section 13(1), it is required by the seller to sell the goods as per the description of the goods but

if the buyer has seen the actual product then this section will not apply (Harlington & Leinster v

Christopher Hull Fine Art, 1991). Mr. Adam did not see the actual TV which was delivered at his

place. He signed the necessary documents and purchased the TV by relying on the description

given by the manager and the same being pasted on the TV that was in the store. Here, the TV

which has been installed at Mr. Adam’s place is not of the same quality as described in the store

because the TV is not of high quality as there was a flash and puffs of smoke that came out from

back of the TV. The TV was also not durable, because the same was seen only after 3 weeks of

its usage. Therefore, it is not worth the price, and hence it is also not good for value. Also, since

the sale and purchase of TV is a consumer sale, therefore this must be treated as breaching the

condition in the contract and thereby Mr. Adam can terminate the contract.

According to section 14 of the Sale of Goods Act 1979, it is required that the goods that are

sold are of satisfactory quality and good for the purpose for which it is sold (legislation.gov.uk,

n.d). To apply this section in a case scenario, it is essential to show that the goods were sold

during the course of the business (Stevenson v Rogers, 1999). The liability imposed under this

section is a strict liability and thus does not depend on proving the fault that existed at the seller’s

part. Subsection 2of section 14 of this act provides that if the goods have been sold during

thecourse of business then there is an implied term the goods are of satisfactory quality.

Coming back to the present case, we see that the selling and purchasing of TV was an act

during the course of business. Hence, it is implied in the present case that the TV must be of

satisfactory quality. This section is also treated as condition to the contract and therefore, Mr

Adam can terminate the contract.

Section 3 deals with the implied terms which are related to the descriptions of the goods. The

goods must be in accordance with the descriptions. This section applies where under the contract

goods will be transfer from transferor to transferee or transferor agrees they will transfer the

goods as according to the descriptions. As in this case the goods must be according with the

description. And transferor transfer the goods as same as the sample of the goods in the bulk.

3

Section 4 deals with the implied terms in quality. Under the contract the good must be fit and in

best quality. The goods are to treated satisfactory if they meet the standard which is required for

the satisfactory quality.

The present case also deals with an important term in contract called as the exclusion clause. An

exclusion clause excludes the liabilities that may arise from breaching a contract. To rely on this

clause, it is essential to show that the exclusion clause was part of the contract

(legislation.gov.uk, n.d).

Coming back to the present case, we see that a contractual document was signed by Mr. Adam

wherein there was a clause stating that after installing the TV by the engineers of the

Departmental store is a proof that everything was ok with the TV and hence they will not accept

any responsibility thereon for faulty TV. The Departmental store will have to show that this

clause was incorporated in the contract.

P1.2 Analyse and advice Mr. Adam on the statutory provisions on the transfer

of property and possession

I advise the following to Mr. Adam about the statutory provisions regarding the transfer of

property and possession-

Section 18 of the Sale of Goods Act 1979, presumes in determining as to when the property shall

pass. Here, the property relates to the goods that are ascertained during the making of contract

and the goods that are not ascertained during the making of contract. Rule 1 of this section

applies to unconditional contract for selling and delivering specific goods, where the goods pass

right away on the making of contract. Rule 2 of this section applies to when it is binding on the

seller to perform a condition prior to the possibility of selling the goods, and thus the goods pass

to the buyer as soon as that condition is performed. Rule 3 of this section provides that it is

binding on the seller to measure and weigh the goods so as to ascertain the price and then the

goods pass to the buyer when it is measured and weighed and the same is brought into the notice

of the buyer. Rule 4 of this section provides that if the delivery of the goods is done on the sale

and return and on approval then the goods will pass if the purchaser either adopts the business

deal or failed to notify the rejection within the reasonable time. Rule 5 of this section provides

4

that in the sale of goods that are not ascertained then the goods passes by following an

unconditional appropriation of goods. This rule also provides that in the sale of goods that are

not ascertained then the goods passes by following an ascertainment by removing the whole

goods in mass but goods intended for the purchaser (legislation.gov.uk, n.d).

P1.3 Evaluate the statutory provisions on buyers and sellers remedies in sale

of goods contracts

The remedies available to Mr. Adam in the present case are-

Section 48 B of the Sale of Goods Act 1979 provides that the buyer can either as the seller to

repair the goods or replace the goods and the same can be done on the expense of the seller. The

seller, under this section has to repair or replace the goods within a reasonable time. But, if the

buyer has asked to repair or replace the goods, then the buyer cannot reject the goods. The goods,

under this section can be rejected either before making a request to repair or replace the goods or

if the same has not been done by the seller in the reasonable time. The seller is not required to

repair or replace the goods if the goods are not possible to do so (legislation.gov.uk, n.d).

Section 48 C (1) of the Sale of Goods Act 1979 provides to reduction of the price. If the seller

do not repair or replace the goods because it was not possible then the same amount can be

reduced (legislation.gov.uk, n.d).

Section 48 C (2) of the Sale of Goods Act 1979 is a secondary remedy provided if the repairing

and replacing of the goods has not been complied. Here, the parties will be put back in a position

as if the contract was never made. The buyer will give back the goods to the seller and the seller

will give back the amount paid for the goods to the buyer. The seller can deduct that amount of

price the value of which has been used by the buyer (legislation.gov.uk, n.d).

P1.4 Apply product liability statutory provisions for faulty goods

Following are the liabilities for product on statutory provisions for faulty goods-

The rule of product liability comes from the statutory law, i.e. the Consumer Protection Act

1987, the law of contract and from the law of tort. To claim under any of these three sources, it is

5

essential to show that the product is defective, its defectiveness caused harm to the claimant and

the defendant is lawfully responsible for defective product (FindLaw UK, 2015). Here we will

discuss on the rule of product liability coming from statutory provisions i.e. the Consumer

Protection Act 1987.

To make the defendant liable for the defective product, it will be enough to establish that the

product was defective while claiming for a defective product based on the Consumer Protection

Act 1987.The liabilities for product on statutory provisions for faulty goods are given under Part

I of the Consumer Protection Act. Here, it is provided that the products manufactured are

lawfully responsible for faulty goods. Under this act, strict liability is imposed on the supplier for

the defective product. Hence, there isn’t required to show negligence or breach of contract while

claiming for a defective product, just showing that the product was defective is enough (FindLaw

UK, 2015).

The product is ought to be defective when “the safety of the product is not such as persons are

generally entitled to expect.” In establishing that the product is defective, the court takes into

account various circumstances such as the way the marketing of the product was done,

instructions or warnings given with that product, the status of technology existing to the

manufacturer of the product while making it (FindLaw UK, 2015).

The claimant can recover for damages compensated under the Consumer Protection Act for

death, injury to person or property provided that the injury to property is the loss that amounts

more than £250 and is not for lost in profits. The claimant cannot recover for damages either for

the defect on product itself or for the cost of its replacement (FindLaw UK, 2015).

Task 2

P2.1 Differentiate between types of credit agreements which Claire could use

to obtain the new car

Here are the following differences between the distinct types of credit agreements which

Claire could obtain for her new car-

6

A conditional sale agreement and Hire purchase agreement- Inconditional sale agreement,

the cases are regulated parallel to the hire purchase agreement and both of them are covered

under the Consumer Credit Act (In Brief, n.d). The most important difference between the hire

purchase agreement and the conditional sale agreement is that under the former one, the

purchaser is not under any obligation to take the title of the goods and in the latter one, the title

of goods is transferred automatically by completing the condition. The condition which is mostly

under this type of agreement is to make the full payment (In Brief, n.d). In the present case, since

Claire is not in a position to make the full payment at a time she cannot go with the conditional

sale agreement. Therefore she can go with the hire purchase agreement.

A conditional sale agreement and a credit sale agreement- The legal form in the credit sale

agreement is same as the conditional sale agreement having one main difference and this

difference is that the purchaser of the goods immediately becomes the owner of the goods under

the credit sale agreementwhich can be seen mostly in a situation of “buy now, pay later” where

the purchaser takes the ownership of the goods and makes the payment in instalment. In contrast

to credit sale agreement, the purchaser takes the ownership of the goods only when the payment

condition has been fulfilled under the conditional sale agreement (In Brief, n.d). In the present

case, Claire can go with credit sale agreement and make the payment of the car in instalment.

P2.2 Analyse the rules on termination rights and default notices for Claire to

be informed in case she subsequently has trouble paying the debts as required

in the contract

The following three options will be left for Claire id she has trouble in payment of the debts

as required under the hire purchase agreement-

I. Under section 87 of the Consumer credit Act 1974, the creditor shall send the default

notice (Student Law, 2015).

II. Claire can give a written notice before the expiry of the default notice so as to terminate

the agreement, return the car and pay the difference between what she has paid and one

half of the total amount that was payable under the agreement (Student Law, 2015).

7

III.Under section 129 of the Consumer credit Act 1974, Claire can apply for a ‘time order’ if

her financial issues are for a period of short term after which she may be given more time

to pay the instalments and this section will stop the creditors to terminate the agreement

and recover her car (Student Law, 2015).

Default notices- Section 87(1) of the Consumer credit Act 1974, the creditors may send a default

notice of 14 days to Claire to pay for the debts. Under the Consumer Credit Regulations 1983,

this default notice comprises of all essential information’s such as its enforcement, default, and

termination (Student Law, 2015).

Under the regulation 33 of the Consumer Credit Regulations 2007, the default notices served

since October 1 2008 must include the statement hereunder else the notice will be ineffective-

“You have the right to end this agreement at any time before the final payment falls due.  Note

that this right may be lost if you do not act before the date shown (after which we may take

action)” (Student Law, 2015).

Debtor’s termination- Under section 99 of the Consumer credit Act 1974, Claire, who is under

a hire purchase agreement, may serve a written notice to the creditor to terminate the agreement

if it had not yet been ended. It was considered in the case of First Response Finance Limited v

Donnelly (2006), that if the termination of the debtor after the date mentioned in the default

notice would restrict on the amount to be paid to the creditor to the difference between one half

of the hire purchase agreement and what is left to pay. In this case, it was decided that debtor

was held liable for the total amount to be paid as per the agreement subtracting the amount paid

by the debtor and the vehicle’s net sale proceeds (Student Law, 2015).

P2.3 analyse the general features of Agency and differentiate between the

different types of agent

General features of Agency- An agency is a commercial dealing having a set of contractual

relationship, quasi contractual relationship, and non-contractual fiduciary relationship involving

a person known as an agent who is authorized to act on behalf of the Principal and creates a legal

relationship with the third party (International Principle: Trans-Lex.org, 2015).

8

Different types of agent- Artist’s agent, sales agent, distributors and licensing agents are four

main types of agents. An artist’s agent deals with the businesses side of the life of an artist.

They are the owners of gallery and owners of publishers who deal with the works of the artists

but do not take their entire business lives. A sales agent is a self-employed. He is a sole Trader

‘on the road’ who sells a variety of reproductions, ready-framed pictures, gifts and greetings

card. They do this on behalf of the artist. They do not look after the marketing and production

department. They only contribute to deal with the sales.A distributor is not the persons but is

companies who have a tendency in covering the whole country and they develop a corporate

image. They are a kind of sales agents who have developed on a larger scale and have hired their

won sales agent having their own marketing programmes. Licensing agents are those who deal

in negotiating with the publishers of card and print. They also deal in negotiating with the

companies that manufactures porcelain as well as giftware companies (Writers and Artists,

2015).

P2.4 Evaluate the rights and duties of an agent to assist Claire understand her

position once she becomes an Estate Agent

Following are the rights and duties of the estate agents under common law, in the present

case, which Claire need to know-

1. The duty of the agent is to act in the best interest of the principal by using her due

diligence and skill while negotiating the terms in transaction with the third party so as to

give the most advantage to her principal (Estates Agents Authority , 2011).

2. There must not be any conflict of interest, and if there is so, the she must disclose it with

the principal and if the principal gives the consent on the same then she can act

accordingly (Estates Agents Authority, 2011).

3. The agent is required not to take any undue advantage of the property, of its position or of

the information the agent has in order to make his or her own profit (Estates Agents

Authority, 2011).

4. The agents owe a duty to keep all the information confidential (Estates Agents Authority,

2011).

9

5. The agent must not sub-delegate its duty (Estates Agents Authority, 2011).

6. The agent must obey all the required instructions of its principals which are lawful

(Estates Agents Authority, 2011).

Task 3

P3.1 Outline monopolies and anti-competitive practice legislation in the UK

Monopolies and anti-competitive practice legislation in the UK

It can be said that monopoly is the domination of a marketplace by a solitary body. The

Competition commission was set up in the year 1988 and it regulates in merging and

empowering the monopoly in the market of UK. It has replaced the monopolies and Mergers

Commission. This generally deals with the matters that are referred through the OFT (Office of

Fair Trading). It makes recommendations and the OFT and the government enforces the rules

(Kluwer Law International).

The definition of the anti-competitive practice is given under the Competition Act. The anti-

competitivepractice intends to effect the restrictions, distorts and prevents competition. It appears

to replicate the provisos of the monopoly of the OFT Act, but in fact, it actual allows to

investigate the particular acts of the firm or group of firms, which is beyond the common

investigation about the market which the MMC (Multinational Companies of investigating) does

as per the requirement by the OFT. The Competition Act applies to a group of companies that are

having a minimum turnover of £10 million. These practices are acceptable in a single market

where there is a very strong competition and in a single market where there is a less competition.

These practices are generally vertical restraints. The Director General can carry out a preliminary

inquiry which is informal in nature, if it suspects that an anti-competitive practice is going on. If

the same is confirmed, the Director General can accept to bind the undertakings so as to stop the

practices or refer the same to the MMC. The MMC will look at these practices and decide if it is

anti-competitiveand if it is the interest of public. The nature of practice do not decide of it is anti-

10

competitive practice or not, rather it effect on the competition decides the same as it’s the vital

issue in the investigation of the MMC. Then after the MMC, recommends the matter to the

Secretary of State as to what action would be required to be taken in order to stop the practice

(Business Case Studies LLP, 2015).

P3.2 Explain the role of the Competition Commission within the context of

monopolies and anti-competitive practices and the UK Office of Fair Trading

The Competition commission was set up in the year 1988 and it regulates in merging and

empowering the monopoly in the market of UK.The Competition Commission generally deals

with the matters that are referred through the Office of Fair Trading. It makes recommendations

and the Office of Fair Trading and the government enforces the rules (Kluwer Law

International).

The definition of the anti-competitive practice is given under the Competition Act. The anti-

competitive practice intends to effect the restrictions, distorts and prevents competition. It

appears to replicate the provisos of the monopoly of the Office of Fair Trading Act, but in fact, it

actual allows investigating the particular acts of the firm or group of firms, which is beyond the

commoninvestigation about the market which the MMC does as per the requirement by the

Office of Fair Trading (Kluwer Law International).

P3.3 Define dominant positions within the EU common market

A position of the dominant market is described by the European Court in the case of

United Brands v Commission (1978) following words-

“A position of economic strength enjoyed by an undertaking which enables it to prevent effective

competition being maintained on the relevant market by affording it the power to behave to an

appreciable extent independently of its competitors, customers and ultimately of its consumers”

(Office of Fair Trading, 2004),

The following two tests assesses if prohibition in Article 82 or the Chapter II shall be

applied-

11

I. If an undertaking is dominant and,

II. If the undertaking is dominant then whether or not the dominant position is misused

(Office of Fair Trading, 2004).

P3.4 Consider the given provisions in the context of the application of EU

exemptions to potentially anti-competitive practices.

The European Commission counts the Article 81 and 82 of the Treaty of the European Union so

as to apply the antitrust regulations. This prohibits the restraining agreements between the

undertakings, rigorous practices to limit or deform the competition in the market as well as

mistreatment devoted by undertakings grasping a dominant position. Article 81 deals with

explicit and non-explicitagreements executed between the organizations that has a purposeful

restriction of competition, by way of demarcation of markets, agreements not to lessen the

prices. Article 82 prohibits the abusing the dominance (Mas, 2010).

Task 4

P4.1 Identify differing forms of intellectual property

An intellectual term refers to the creations of a person’s mind. The intellectual laws protect these

creations of human by granting them exclusive rights. Trademarks, patents, copyright, design

and Law and Practice are various forms of intellectual property (Gov.UK, 2015).

P4.2 Outline the principles relating to the protection of inventions through

patent rights and their infringement in a given business scenario

A patent is the right exclusive in nature that is granted under the intellectual property law in

order to protect the inventions made by the person. An invention is something that resolves the

existing technological issues in the form of a product or as process. An infringement of patent

arises when someone else, without the consent of the inventor, uses product or process for its

own use. The damages for the same can be recovered under section 65 of the intellectual law

(Gov.UK, n.d).

12

P4.3 Describe the principles relating to copyright protection and their

infringement in a given business scenario

Copyright is an exclusive legal right granted by the intellectual laws to the creator who has

created his or her own original works. This right is especially given to the writers, musicians,

photographers etc. for their intellectual effort. An infringing of copyright will not amount if the

creativity of the original creator is used for study process, performing, lending the same for

education etc. what constitutes to infringement of copyright is an unauthorized broadcasting, re-

recording or copying the same and public performance (UK COPYRIGHT SERVICE, 2015).

P4.4 Compare and contrast the protection of trademarks and business names

A trade mark can be defined as “Any sign which is capable of being represented graphically

which is capable of distinguishing goods or services of one undertaking from those of other

undertakings. A trade mark may, in particular, consist of words (including personal names),

designs, letters, numerals or the shape of goods or their packaging” (Oout-Law.com). Hence, a

trademark is anything that distinguishes the business of one from the other even if they are

trading in the same business.

1. A business name identifies a particular product or company name and the trademark is

registered for trade name (Truex, 2015).

2. While a business name provides the customer to easily remember the name, a trademark

protects the business name (Truex, 2015).

3. A business name is not registered and can be used by others without the consent but the

name under trademark can only be used if they are not confusing (Truex, 2015).

4. Business name are registered as trade names at the local or at the state level while a

trademark is obtained from the patent and trademark offices of USA (Truex, 2015).

5. There are no limitations while using the business name whereas the trademark is limited

for the period of 10 years and the same can be renewed (Truex, 2015).

13

Conclusion

An implied term in a contract is the term that is set in the contract by custom, statute, or by the

court during the proceedings. The rule of product liability comes from the statutory law, i.e. the

Consumer Protection Act 1987, the law of contract and from the law of tort. To make the

defendant liable for the defective product, it will be enough to establish that the product was

defective while claiming for a defective product based on the Consumer Protection Act 1987.

The definition of the anti-competitive practice is given under the Competition Act. The anti-

competitive practice intends to effect the restrictions, distorts and prevents competition.

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